Cypherpunk Movement

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Cypherpunks and the failure of the Centralized Web

By Chelsea​ ​Barabas, Neha​ ​Narula and Ethan​ ​Zuckerman:

"The cypherpunk worldview, which first emerged in the 1970’s alongside significant developments in the study of cryptography. Technological advances in encryption, such as the widely used RSA encryption algorithm and the Diffie-Hellman key exchange, made it possible for an individual with modest computing resources to enjoy strong privacy protections, even in the face of governments and corporations with significantly greater resources. Many celebrated these technological breakthroughs as a critical safeguard for user privacy in an increasingly digital world. Still others–the cypherpunks–strove to harness cryptographic innovations in order to drive much broader social and political changes. The intellectual roots of the cypherpunk movement are grounded in the work of people like David Chaum, who first proposed the use of cryptographic primitives to create anonymous digital cash in the early 80’s. Cypherpunks took ideas like this and 6 extended them even further. For them, cryptography was a critical vehicle for individual freedom, one that could significantly weaken the reach of governments and other powerful institutions. The most extreme adherents to the cypherpunk worldview embraced a philosophy sometimes referred to as crypto-anarchism, which envisioned a world in which all laws and regulations were supplanted by mathematically verifiable code. Important values and enforcement mechanisms could be encoded directly into software that would carry out critical social processes through the secure exchange of information.

Forty years later, the cypherpunk dream has not (yet) been realized. Security scholar Arvind Narayanan argues there is simply not a high user demand for upsetting fundamental power structures through crypto-enforced contracts, particularly in democratic societies where governments are chosen by the people. Moreover, the vision of code as a functional stand-alone governance institution breaks down amidst the reality of unpredictable and imperfect humans, messy social systems, and buggy code. In order for cryptographic systems to be practical, Narayanan argues, they need to provide clear paths to recourse for users when things go wrong. To do this, technological solutions must effectively interact with other modes of governance and enforcement, such as existing legal systems.

In spite of these struggles, the cypherpunk movement has experienced a renaissance in recent years thanks to the rise of projects like Bitcoin. Bitcoin is a peer-to-peer cash system that enables the secure exchange of digital tokens without the need for a trusted third party like a bank or credit card company. Bitcoin enthusiasts frame the potential of this technology in terms of its “decentralizing” impact. Rather than placing one’s trust in a closed network controlled by elite financial institutions, Bitcoin offers users an open alternative by “decentralizing” critical processes of secure value exchange, like transaction validation and currency issuance. The decentralized architecture of Bitcoin provides guarantees for certain user protections, such as resistance against censorship. Bitcoin achieves censorship-resistance through two mechanisms: First, there is no consistent mapping of digital Bitcoin identity to real-world identity -- anyone can join the system and create as many “accounts” as they wish.

However, these accounts are pseudonymous, not anonymous, and identities can be uncovered by carefully examining the flow of transactions. Second, theoretically, anyone has the ability to verify and update the Bitcoin ledger by entering into a process known as “mining.” Mining is the process by which participants in the network process and secure new transactions. Mining is not gated, but practically, it lies in the hands of the few who are willing to make the financial investment in the necessary hardware. On the one hand, Bitcoin faces many of the hallmark struggles of a cypherpunk project -- it is cumbersome to use and demand for alternative financial services has not been high enough to push Bitcoin into the mainstream. At the same time, Bitcoin has captured public imagination and provided the conceptual framework for a new generation of projects that strive to distribute critical processes and services that currently fall under the purview of large, for-profit companies. Like the early cypherpunks, many of these projects seek to “disrupt” this new class of power elites–the digital platform owners–by developing peer to peer protocols for the exchange of information, and supporting crowdsourced methods for curating content and managing user reputation." (