What is crypto-anarchism and how it evolved?

Crypto-anarchism is a type of anarchism in which cryptographically protected anonymization technologies, digital pseudonyms, and digital money are used to circumvent state control - surveillance, censorship, and taxation.

How did crypto-anarchism originate?

In the 1940s, Western intelligence agencies began to study the idea of ​​the participation of the message recipient in the process of coding it. In 1973, British mathematician Clifford Cox introduced a model in which an authorized recipient of a message could select two giant indivisible numbers and multiply them, obtaining the third giant number used as the public key. There was no need to hide it since it is almost impossible to calculate two initial numbers.

In the 70s, when the first working prototypes of the Internet appeared, the issue of data protection in an open environment became relevant. In 1978, American cryptographer David Chaum, a student at the University of California at Berkeley, developed a blind digital signature method - a public key encryption model. Chaum’s development made it possible to create a database of people who could remain anonymous while guaranteeing the accuracy of the information they provided about themselves.

Chaum dreamed of digital voting, the process of which can be verified without revealing the identity of the voter, but first of all about digital cash. In the mid-1980s, he managed to create a model in which users made payments while maintaining anonymity and guaranteeing the reality of the funds. A circle of cryptographers learned about the developments of Chauma, among which a movement appeared that advocated computer technology as a means of destroying the state.

However, before crypto-anarchism could make it into the mainstream it still had to give way to tech anarchism in general. You see, crypto-anarchism was a small branch of technology at that point, and getting its way in the market was still quite early. It was considered more of a feature than a standalone sector. However, it did take a massive boost when the tech anarchism happened in the late 90s and early 2000s. The markets boomed with new tech companies with the majority of UK-based stock brokers as well as brokers in the US and Japan was overwhelmed with new listings. The market blew up immediately, only bursting the bubble in 2008 and making way for the underdog, aka crypto-anarchism.

The main ideologist of this movement was the American cryptographer, a former leading researcher at Intel Timothy May. In 1987, May met the American economist, entrepreneur, and futurist Phil Salin, who founded the American Information Exchange (AMiX), a network platform for data trading.

However, May did not like the idea of ​​an electronic platform where people can (cross-border and with low commissions) sell unimportant information to each other. He dreamed of creating a global system that allows anonymous two-way exchange of any information and resembles a corporate information system. Subsequently, he finalized this concept in the form of a BlackNet system, the operation of which required a non-governmental digital currency, and the ability to make untracked payments in it.

In September 1988, May wrote The Crypto Anarchist Manifesto based on the Communist Manifesto by Karl Marx/ According to the manifesto, information technology will allow people to manage their lives without governments, but with the help of cryptography, digital currencies and other decentralized tools.

According to May himself, the ideological foundation of the Crypto Anarchist Manifesto was such a kind of anarchism as anarcho-capitalism, in which the emphasis is on voluntary transactions and the free market.

What are the goals of crypto-anarchism?

• Protection from mass surveillance of communication in computer networks. Cryptanarchists consider the development and use of cryptography to be the main means of liberation from state control.

• Getting rid of censorship, especially on the Internet, as contrary to freedom of expression, through the networks of Tor, I2P, Freenet, and the like. According to crypto-anarchists, freedom from censorship will help in the fight against corruption and allow opposition politicians to spread their views. Crypto-anarchists strive to create a global Internet of trust - a crowdfunding Internet service provider that uses peer-to-peer cellular communication stations that are collectively owned. This Internet is fully encrypted and confidential: an algorithm is integrated into the system that provides each member of the network with a signature and reputation, depending on his merits.

• Creating and developing a new economy based on viable alternatives to banking systems in the form of cryptocurrencies and decentralized financial services.

How does crypto-anarchism develop?

Crypto-anarchism is not a single organized movement, but rather a set of values and views that are shared by a wide range of people, including WikiLeaks founder Julian Assange, former CIA, and NSA officer Edward Snowden, programmers Cody Wilson and Amir Taaki and many others. All of them, to one degree or another, embody the ideals of crypto-anarchism.

How has crypto-anarchism affected cryptocurrencies?

The importance of confidentiality, anonymous transactions, cryptographic protection - all these ideas were subsequently implemented to one degree or another in cryptocurrencies.

In October 2008, Satoshi Nakamoto sent the famous white paper to the mailing list. The content of the work testifies to the influence of cipher banks and cryptanarchists. In a white paper, Bitcoin cites British cryptographer Adam Beck and computer engineer Wei Dai. 

In turn, the manifesto of Wei Day, in which he puts forward the idea of ​​b-money, begins with the words: "I admire Tim May's cryptanarchism." After the publication of the article, Nakamoto continued to work, and on January 3, 2009, he extracted the genesis block of bitcoin.

The main ideologist of crypto-anarchism Timothy May at the end of his life said that the cryptocurrency industry actually betrayed the early ideals of this movement. He criticized the concept of compliance with laws and regulations. According to him, the spirit of crypto-anarchism contradicts the requirement to comply with the law on combating money laundering, passports, freezing accounts, and the requirement to report suspicious activities.