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Well, I am starting to be at a loss for words here, so its time to pass this conversation onto the ATS group I suppose. I look forward to the comments and will get involved with questions and thoughts when the talk starts to fizzle. Thanks for reading and maybe even contributing!
In 1983 [David Chaum] suggested a fundamentally new kind of cryptography” that would enable a better form of money: third parties could not determine payee or the time or amount of the payment. Individual privacy and anonymity was guaranteed, as when paying cash at a gas station or in a drugstore. At the same time, individuals could provide proof of payment, and they could invalidate payments if someone stole their medium of payment, as when using old-fashioned credit cards.
Chaum combined the best of both worlds: the anonymity of cash and the security of plastic. The article that spelled out the idea became one of his most influential papers, Numbers Can Be a Better Form of Cash Than Paper.” But using this improved form of cash was not only about convenience and security. If crypto cash would not be adopted widely, Chaum feared, invisible mass surveillance” would be inevitable, perhaps irreversible.”
Chaum’s idea was magically simple and powerful. Steven Levy, a perceptive chronicler of the grand cryptography debate of the 1990s, called him the Houdini of crypto.” So powerful were Chaum’s ideas that an entire movement arose. That movement believed crypto was en route to making the state as we know it obsolete.
Many of these early cryptographers had been exposed to a powerful streak of American culture: civil libertarianism with its deep-seated distrust of the federal government — or of any government. Counterculture, with its focus on free speech, drugs, and sexual liberation, was constantly pushing the boundary of what was legal. Meanwhile, the NSA’s hysterical reaction to basic crypto scholarship amplified this hostility toward government in the emerging computer underground of the 1980s. So it was no coincidence that Bay Area cryptographers unearthed what would become one of the most potent political ideas of the early 21st century.
In mid-1988 ... May penned the Crypto Anarchist Manifesto,” whimsically modeled on another famous manifesto with revolutionary ambitions: The technology for this revolution — and it surely will be both a social and economical revolution — has existed in theory for the past decade,” May wrote, but only recently have computer networks and personal computers attained sufficient speed to make the ideas practically realizable.”
The possibilities were extraordinary. Two persons may exchange messages, conduct business, and negotiate electronic contracts without ever knowing the True Name, or legal identity, of the other,” May wrote in his manifesto, using capital letters in honor of his favorite science fiction author. Then May mobilized that most powerful American myth, the Frontier. Barbed wire, a seemingly minor technical invention, had enabled the fencing off of vast ranches and farms in the open rangeland of the West. Barbs on wire had altered forever the concepts of land and property rights in the frontier states, and it had caused the Fence Cutting Wars a century earlier. May sided with the wire-clipping cattlemen and cowboys. On the electronic open range, the barbed wire need not be accepted as immutable fact.
The comparison was odd, but it sounded powerful: Crypto was a game changer. It also emerged as a seemingly minor technical invention at first, from some obscure branch of mathematics. But this time, technology worked for freedom and liberty, and against those who wanted to build fences around their property. For May, crypto was like the wire clippers” that would dismantle the illegitimate fences around intellectual property. The federal government, he observed with horror, wanted to slow or halt the spread of this technology, and Washington justified the clampdown with vague references to national security. And yes, just as in True Names, criminals would abuse it and take advantage of the renewed liberties. But none of this would stop the rise of crypto anarchy, May knew. He ended his pamphlet with this battle cry: Arise, you have nothing to lose but your barbed wire fences.”
The Crypto Anarchist Manifesto” already contained the seeds of what would become a potent political ideology: technology itself, not humans, would make violence obsolete. May distributed his pamphlet electronically and in print among like-minded activists at the Crypto ’88 conference in Santa Barbara and again at the Hackers Conference that year. But something was missing. The message didn’t quite get out.
Crypto Anarchist Manifesto
A specter is haunting the modern world, the specter of crypto anarchy.
Computer technology is on the verge of providing the ability for individuals and groups to communicate and interact with each other in a totally anonymous manner. Two persons may exchange messages, conduct business, and negotiate electronic contracts without ever knowing the True Name, or legal identity, of the other. Interactions over networks will be untraceable, via extensive re- routing of encrypted packets and tamper-proof boxes which implement cryptographic protocols with nearly perfect assurance against any tampering. Reputations will be of central importance, far more important in dealings than even the credit ratings of today. These developments will alter completely the nature of government regulation, the ability to tax and control economic interactions, the ability to keep information secret, and will even alter the nature of trust and reputation.
The technology for this revolution--and it surely will be both a social and economic revolution--has existed in theory for the past decade. The methods are based upon public-key encryption, zero-knowledge interactive proof systems, and various software protocols for interaction, authentication, and verification. The focus has until now been on academic conferences in Europe and the U.S., conferences monitored closely by the National Security Agency. But only recently have computer networks and personal computers attained sufficient speed to make the ideas practically realizable. And the next ten years will bring enough additional speed to make the ideas economically feasible and essentially unstoppable. High-speed networks, ISDN, tamper-proof boxes, smart cards, satellites, Ku-band transmitters, multi-MIPS personal computers, and encryption chips now under development will be some of the enabling technologies.
The State will of course try to slow or halt the spread of this technology, citing national security concerns, use of the technology by drug dealers and tax evaders, and fears of societal disintegration. Many of these concerns will be valid; crypto anarchy will allow national secrets to be trade freely and will allow illicit and stolen materials to be traded. An anonymous computerized market will even make possible abhorrent markets for assassinations and extortion. Various criminal and foreign elements will be active users of CryptoNet. But this will not halt the spread of crypto anarchy.
Just as the technology of printing altered and reduced the power of medieval guilds and the social power structure, so too will cryptologic methods fundamentally alter the nature of corporations and of government interference in economic transactions. Combined with emerging information markets, crypto anarchy will create a liquid market for any and all material which can be put into words and pictures. And just as a seemingly minor invention like barbed wire made possible the fencing-off of vast ranches and farms, thus altering forever the concepts of land and property rights in the frontier West, so too will the seemingly minor discovery out of an arcane branch of mathematics come to be the wire clippers which dismantle the barbed wire around intellectual property.
Arise, you have nothing to lose but your barbed wire fences!
After you lose $20,000 grand on cryptos you're likely to think they're all a scam.
5 One should keep in mind that the term "Bank" refers to the financial system that issues and clears the coins. For example, the Bank might be a credit card company, or the overall banking system. In the latter case, Alice and Bob might have separate banks. If that is so, then the "deposit" procedure is a little more complicated: Bob's bank contacts Alice's bank, "cashes in" the coin, and puts the money in Bob's account.