« Trust and antitrust | Main | Dependencies at scals »

"Crypto"

rotated-birch-contactlessmonopoly-ttf2016.jpgA few weeks ago, digital rights activist Amie Stepanovich was in the news for making a T-shirt objecting to the new abuse of "crypto" to mean "cryptocurrencies". As Stepanovich correctly says, "crypto" has meant "cryptography" for at least 30 years and old-timers do not appreciate its appropriation. I am enough of an oldtimer to agree with her, but fear she's fighting a losing battle. For decades "hackers" meant clever people who bent hardware and software systems to their will. Hackers built the first computers. Hackers made the Internet. "Hacker" was a term of honor, applied by others. And what happened circa the mid-1990s? It was repurposed for petty criminals running scripts to break into websites. Real hackers were furious. Did anyone respond sympathetically? They did not. Hackers are now criminals. So: "Crypto" is doomed. Exhibit A: Jeff John Roberts' 2020 history of Coinbase, Kings of Crypto.

This week, anti-monopolist author Matt Stoller unleashed a rant about "crypto", calling the whole shebang - which for him includes the non-fungible token (NFT) craze, cryptocurrencies, and the blockchain, as well as web3, which we tried to make sense of a couple of weeks ago - "a bunch of bullshit". The only use cases Stoller could find were speculation and money laundering; the tools that exist he dismissed as "don't work". He attributes its anti-monopoly zeitgeist to cryptocurrencies' emergence "out of the financial crisis", adding on Twitter that they were "invented about the same time as the iPhone".

This is when I realized: this use of "crypto" is less evolving language, more loss of culture. We all think the world started when we discovered it.

So.

"Crypto", as in cryptography, is probably as old as humanity, basically because every time someone figures out how to protect a secret someone else tries to crack it. For that history read Simon Singh's Cryptography. The development of the specific type of cryptography the nascent Internet needed, public key cryptography, is thoroughly documented in Steven Levy's Crypto. For cryptography in military communications try David Kahn's The Codebreakers.

Cryptocurrencies as a digital equivalent of cash, are usually traced to 1991, when David Chaum described ecash in Scientific American. In the mid-1990s, Chaum attempted to commercialize ecash via his company, Digicash.

Nothing was ready. Commercial traffic on the Internet began in 1994, soon followed by the first ecommerce companies: eBay, Amazon, and Paypal. Graphical web browsers were slow and bare-bones. People were afraid to use *credit cards* online. Yet Chaum hoped they would opt to turn their familiar, hard-earned money into his incomprehensible mathematical thing and bet they could find somewhere to buy something with it. The web was too small, the user base was too small, and it was all so strange and clever, way too soon. Chaum was not the only one to discover this sad reality.

This timing was due to the unexpected democratization of cryptography, which began in 1976, when Martin Hellman and Whitfield Diffie published the basis of public key cryptography (later, it emerged that the UK spy agency GCHQ had already developed it, but the mathematicians couldn't tell anybody). Besides allowing strangers to communicate spontaneously in a trustworthy way, Diffie's and Hellman's work pulled cryptography out of the spy agencies into entirely new communities. By 1991, a single programmer in his home with a personal computer was able to write a piece of powerful encryption software that anyone could use to protect their data and communications, setting off 30 years of crypto debates. Phil Zimmermann's program, PGP, is still in use today, having withstood the tests cryptoanalysts have thrown at it.

These technical developments inspired the beginnings of the movement and the anti-government motivations that Stoller identifies. To many of this crowd, finding easier and more efficient ways to move money around was only part of its appeal. Many embraced the idea of being able to bypass banks, governments, tax collectors, and all the other trappings of the regulated world by using encryption to create untraceable forms of money. In her 1997 book, Close to the Machine, Ellen Ullman tells the story of her close encounters with one of the 1990s movement's leads, and their inability to understand each other's world.

Throughout the 1990s these ideas were swapped back and forth on the Cypherpunks mailing list. You can get the gist from this CrypoInsider tribute to Timothy C. May or May's Cyphernomicon. At Computers, Freedom, and Privacy 1997, May outlined BlackNet, an anonymous market for everything from assassinations to government secrets, all enabled by untraceable digital cash. May's information market is so like early Wikileaks, that at its inception I failed to take it seriously (Julian Assange has said he read the Cypherpunks list).

However: blockhain-based cryptocurrencies are not untraceable. The 1997 Internet was also awash in libertarian predictions, too - and what got built and who's profiting? Sure, some cryptocurrency nuts want to bypass banks and play anti-regulatory games. But some of today's experimenters with cryptocurrencies are central banks, governments, and credit card companies, as fintech expert Dave Birch writes in his book The Cryptocurrency Cold War. If there are winners, they will be the ones claiming most of the spoils. Unless Web3 works out?


Illustrations: Dave Birch, trying to figure out how to play contactless Monopoly.

Wendy M. Grossman is the 2013 winner of the Enigma Award. Her Web site has an extensive archive of her books, articles, and music, and an archive of earlier columns in this series. Stories about the border wars between cyberspace and real life are posted occasionally during the week at the net.wars Pinboard - or follow on Twitter.

TrackBack

TrackBack URL for this entry:
https://WWW.pelicancrossing.net/cgi-sys/cgiwrap/wendyg/managed-mt/mt-tb.cgi/1036

Post a comment

(If you haven't left a comment here before, you may need to be approved by the site owner before your comment will appear. Until then, it won't appear on the entry. Thanks for waiting.)

Archives