The cypherpunk movement

May 14, 2024 1:04:11 PM

The combines ideas of anonymity on the Internet, using cryptography, with ideas from the punk movement. It has its origins in the early 1990s in the San Francisco area, California, and includes a group of mathematicians, hackers and cryptographers. In 1993 the cypherpunk manifesto is published by Eric Hughes. It starts with the following words.

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.

Among its members, there are personalities who were involved in or that influenced the emergence of Bitcoin, such as Adam Back, Nick Szabo and Hal Finney. Within the cypherpunk community, the creation of a form of electronic money, without the need for a central regulatory power, and that could be used anonymously, has always been one of its main objectives, albeit followed by much skepticism.

One of the first attempts to create anonymous electronic money can be traced to the famous cryptographer in the early 1990s. His idea was to create an electronic means of payment that would be anonymous to the buyer, yet not guarantee the anonymity of the merchant. Due to his attempts in this direction, Chaum is considered the father of anonymity on the Internet.

Despite its pioneering spirit, or precisely because of it, the company created by Chaum, Digicash, operated for only a few years, declaring bankruptcy in 1998. One of the main reasons for the failure was competition from credit card companies, which despite not anonymous, were considerably more user-friendly.

Another issue involving Digicash was its centralization. Although it brought up the idea of anonymity in transactions, using cryptographic methods of public key and blind signature, every transaction needed to be validated by Chaum’s company. It is possible to say that this was the first successful attempt to create a digital currency based on cryptography, but without the main ingredient that would come with Bitcoin: decentralization.

Before Bitcoin, other proposals were put forward, such as Bit Gold by cryptographer Nick Szabo and b-money by computer scientist Wei Dai. None of them were ever fully developed. When Satoshi Nakamoto presented his idea for Bitcoin in 2008, the dream seemed like a project destined to fail. Today we know it wasn’t.

David ChaumCryptographyBitcoin