The history of cypherpunks and their contribution to the rise of the internet and ultimately Bitcoin.

Published 02 Dec 2021 by Abhishek Bourai

Table of Content

  1. Cryptography - Ways of Securing Informations and Communications
  2. Learn More about the Cypherpunk movement
  3. Role of Cypherpunks
  4. Some of the greatest Cypherpunks of 21th Century
  5. Conclusion

As we all are just aware that the internet is a vast searchable realm but there is an unknown hidden story behind it. The hidden world of unindexed pages, encrypted content, and unlinked websites is simply known as Dark Net.

Hughes was a mathematician at UC Berkeley, May was a businessman employed by Intel, and Gilmore was a computer scientist who worked for Sun Microsystems, which Oracle now owns. Together, the three individuals discussed issues surrounding cryptography and privacy. Hughes, a brilliant mathematician from the University of California, Berkeley, had spent time working in the Netherlands with David Chaum, perhaps the world’s best-known cryptographer at that point.

They all believed that the significant political issue of the day was whether governments of the world would use the Internet to strangle individual freedom and privacy through digital surveillance or whether autonomous individuals would undermine and even destroy the state through the subversive tools digital computing also promised.

Cryptography - Ways of Securing Informations and Communications

Cryptography is the use of codes and ciphers to protect secrets that began thousands of years ago. In the 20th century, the invention of mechanical machines took place, such as the Enigma rotor machine that helps in providing more sophisticated and efficient encryption. Encryption in modern times is achieved by using algorithms that have a key to encrypt and decrypt information. These keys convert the messages and data into “digital gibberish” through encryption and return them to the original form through decryption. In general, the longer the key is, the more difficult it is to crack the code. This holds because deciphering an encrypted message by brute force would require the attacker to try every possible key.

Learn More about the Cypherpunk movement

The Cypherpunk movement has no exact date, but its origin can be traced back to the mid-1970s. Before this, cryptography as a technological field was extremely niche. It was only used by the military and intelligence agencies, and a tremendous amount of work in the area was classified. In 1993 the three friends Eric Hughes, Timothy May, and John Gilmore had a meeting that ended up giving rise to the Cypherpunk Movement.

Regarding privacy, the Cypherpunk manifesto, a book published by Eric Hughes quotes “Privacy is necessary for an open society in the electronic age. Privacy is not secrecy. A private matter is something one doesn’t want the whole world to know, but a secret matter is something one doesn’t want anybody to know. Privacy is the power to selectively reveal oneself to the world.

Role of Cypherpunks

In the past decade, cypherpunks have created a bunch of functions based on cryptography that supported the Cypherpunk movement. In 1997, British cypherpunk Adam Back developed Hashcash, an anonymous transaction system used to limit spam emails and cyberattacks.

Wei Dai, a computer engineer in 1998 published a proposal that talked about b-money, “an anonymous, distributed electronic cash system,” which would serve as a template for developing Bitcoin.

Developer Hal Finney in 2004 built upon Adam Back’s Hashcash and created the first reusable proof of work (RPOW) system, which would later become a foundation for cryptocurrencies. Finney also became the first recipient of Bitcoin when it went live in 2009.

Finally, in 2008, Satoshi Nakamoto, published the bitcoin whitepaper, citing both hash cash and b-money. In fact, Satoshi emailed Wei Dai directly and mentioned that he learned about b-money from Dr. Back

traditional privacy model

Some of the greatest Cypherpunks of 21th Century:

  • Satoshi Nakamoto: the founder of Bitcoin, is also another big name in the cypherpunk community. However, other than his name, nobody knows the background of Satoshi Nakamoto.
  • Julian Assange: the founder of WikiLeaks, is perhaps the most notorious cypherpunk to date. Though WikiLeaks was launched in 2006, and it only took the world by storm in the early 2010s, Assange said he joined the cypherpunk movement as early as 1993 or 1994.
  • Jacob Appelbaum: Tor, an anonymous web browser developer who uses onion routing, is a cypherpunk. He has also been a vocal spokesperson for WikiLeaks.
  • Bram Cohen: the founder of the file-sharing platform BitTorrent, is a cypherpunk. In 2017, he co-founded Chia Network and developed the cryptocurrency Chia.
  • Dr. Adam Back: Inventor of Hashcash, co-founder of Blockstream
  • Tim Hudson: Co-author of SSLeay, the precursor to OpenSSL
  • Paul Kocher: Co-author of SSL 3.0
  • Moxie Marlinspike: Founder of Open Whisper Systems (developer of Signal)
  • Steven Schear: Creator of the concept of the “warrant canary.”
  • Bruce Schneier: Well-known security author
  • Zooko Wilcox-O’Hearn: DigiCash developer, Founder of Zcash
  • Philip Zimmermann: Creator of PGP 1.0

The Era when Encryption was Crime.

Encryption is the process of converting data into a code to ensure its confidentiality. For example, data in motion may be encrypted such that only the original sender and the intended recipient can access the information. This is referred to as end-to-end encryption and typically is applied in popular applications such as WhatsApp, Snapchat, and Facebook Instant Messenger.

A team of cryptographers at MIT (Massachusetts Institute of Technology) in 1977 made an astonishing discovery: a mathematical system for encrypting secret messages is so powerful that it can make government spying potentially impossible.

Before the MIT team could publish a description of how this system worked, the National Security Agency (NSA) has declared that doing this could be considered a federal crime. This is because the 1976 Arms Export Control Act (AECA) made it illegal to distribute weapons in other countries without a license, including cryptography. The penalty for violating AECA was up to 10 years in prison or a fine of one million dollars.

There was the beginning of the “crypto wars,” the legal and public relations battle between the intelligence community and privacy activists on the rights of citizens to use end-to-end encryption. Many of those involved in the crypto wars were associated with the “cypherpunk movement,” a community of hackers, hobbyists, and computer scientists, which the mathematician Eric Hughes once described as “cryptography activists.”

In 1977, the Institute of Electrical and Electronics Engineers, was planning to hold a conference on cryptography at Cornell University. They received a letter from an National Security Agency (NSA) employee who wrote that the U.S. government considered these mathematical systems as “modern weapons technologies” and distributing them was a federal crime.

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Pre Bitcoin Cryptocurrencies Applications

There was a mystery behind who satoshi nakamoto was? But there was a person named Mr. Szabo who contributed a bitcoin predecessor with the name Bit Gold using the same methods of math and cryptography. It may be impossible to prove Satoshi’s identity until the person or people behind Bitcoin’s curtain decide to come forward and prove ownership of Satoshi’s old electronic accounts. Many concepts central to Bitcoin were developed in an online community known as the Cypherpunks, a loosely organized group of digital privacy activists. All these applications therefore helped satoshi to build the base for the bitcoin.

cryptocurrencies applications

  • Digicash: Digicash in 1998 was founded by David Chaum, a prominent cryptographer to facilitate untraceable anonymous online transactions.
  • E-gold: E-gold was founded by Douglas Jackson and Barry Downey in 1996 and grew to 5 million accounts by 2009 when operations were ceased due to legal issues.
  • Bit-Gold: Nick Szabo proposed a decentralized currency system with a limited supply of digital money issued to people who devoted computing resources.
  • Ripple Pay: In 2004, Ripplepay was developed by Ryan Fugger to create a decentralized monetary system that could effectively allow individuals and communities to make their own money.

Financial turmoil during the year 2007-08

  • the collapse of large financial institutions prevented by government bailouts
  • the drop of stock markets around the world
  • housing market tanked, resulting in foreclosures, evictions, unemployment
  • prolonged liquidity problems hampering economic activity
  • leading to the European sovereign debt crisis
  • and generally eroding trust in traditional banking systems backed by governments.

Satoshi — Intro of the bitcoin whitepaper to the world

The bitcoin white paper was published in October 2008, and then, bitcoin was launched in Jan 2009. It is still not known who Satoshi was. Given the effort of putting together such a sophisticated platform, some opine that it was a group and not a single person.

In October 2008, Satoshi Nakamoto, an unknown individual or group of individuals, sent a paper to the cypherpunk mailing list at metzdowd.com called: “Bitcoin: A Peer-to-Peer Electronic Cash System.”

The debate is out there as well on the significance of the timing. Many believe; bitcoin simply was a response to the financial crisis — the ‘illegitimate’ ways governments of ‘rewarding’ and ‘bailing out’ potential miscreants in the financial sector, thus providing an alternate currency free of any government.

The timing might have just been an opportune moment for more substantial adoption. Still, as we reviewed throughout this article, the motivations of anonymity and untraceability in online transactions were undoubtedly the primary driver behind bitcoin and the several advancements in cryptography and cryptocurrency applications that came before it.

Blockchain

After the launch of bitcoin by around 2015, we started seeing platforms built with bitcoin’s underlying technology for enterprise use. For example, in December 2015, Hyperledger Fabric was launched by The Linux Foundation and has initially been contributed by IBM and Digital Asset.

The Fabric Network also introduced the idea that was not seen in distributed solutions of separating roles between the various nodes in the infrastructure peer nodes, orderer nodes, membership service providers.

Conclusion

Bitcoin originated from several technologies and cryptographic advancements that came from the activism and the quest for anonymous online sharing and trading through peer-to-peer systems. Bitcoin is not an invention, bitcoin is a movement towards a fairer, unbiased, and open economy of the future.

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