Cypherpunk friends, Here's a piece I just did for the Extropians mailing list, arguing for a kind of "crypto phase change." Yes, it's political, but in a way that I sense some list members are eager to hear about. We rarely discuss the long term implications of strong crypto, digital money, remailers, etc., these days. These topics got pretty thoroughly aired a year or so ago when the list was young, and the message is of course made clearly in some of the "rants" (Eric's term, but in light of the "True Rants" we've been seeing lately, I think the term is misleading). Anyway, I won't apologize further. You can always delete this. Forwarded message: To: Extropians@extropy.org From: tcmay@netcom.com (Timothy C. May) Subject: ANARCHY: The Coming Crypto Phase Change Date: Tue, 16 Nov 93 23:54:51 PST I want to elaborate on some comments I made earlier about anarchy and crypto-anarchy and tie them to the "Oceania" ocean colonization thread. I wrote:

Some of us believe various forms of strong cryptography will cause the power of the state to decline, perhaps even collapse fairly abruptly. We believe the expansion into cyberspace, with secure communications, digital money, anonymity and pseudonymity, and other crypto-mediated interactions, will profoundly change the nature of economies and social interactions.

Governments will have a hard time collecting taxes, regulating the behavior of individuals and corporations (small ones at least), and generally coercing folks when it can't even tell what _continent_ folks are on!

The "crypto phase change" is the transition to wide use of private communications to conduct business, to arrange deals, to meet other people, and so on. I contrast it with the idea of a "singularity," so often associated with nanotechnology (cf. Vinge, Stiegler, et. al.), because nothing is ever truly a "singularity." Discontinuities, yes. Phase changes, yes. Singularities, in the sense of infinite spikes, no. Crypto and related cyberspace methods have the potential for causing a fairly rapid transition to a new sort of society. Just as printing presses did. Just as radio, television, and new media did. And this phase change could involve--likely _will_ involve--many people, perhaps the majority of the population in America and Europe, at the least. Some scenarios: - people hear about widespread tax evasion by crypto-anarchists, and they get interested (for various reasons, including jealousy, anger, greed, desire for freedom). "Crypto lasing." - consultants discover they can consult on projects from other countries, from jurisdictions that might ban their invovlement if they knew about it, and so on. - the "permanent tourists" in the world-spanning economy. - black markets in credit information, dossiers, insurance fraud cases, medical malpractice, etc. A simple example that will reach many people: You're thinking of hiring a lawyer. Under U.S. law, records of "bad lawyers" are hard for outsiders to keep, to gain access to, etc. The Bar Associations, like the American Medical Association, like other officially sanctioned "guilds," prefers to keep outsiders in the dark. So what happens when "Reputations R Us" sets up shop in cypherspace--or, more mundanely, on an island in the Caribbean that has no such laws? What happens when for the price of an offshore phone call or Net query the parochial and paternalistic U.S. laws can be trivially bypassed? It'll be a whole new world. Ditto for gambling, escrow services to hold money (think of the reduction in violence when "reputable" digital banks will hold the drugs _and_ the money), information markets, private investigation services, rent deadbeat records, and credit records that include _all_ creditor information (not just the last 7 years, and not just the "allowable" items...how dare anyone infringe my right to take into account records more than 7 years old?!). (For those worried about tracing the calls, about sting operations, etc., that's where digital mixes (remailers) come in and where prepaid "coupons" ("The holder of this number is entitled to one database query") come in. Even short of full-blown Chaumian digital money, a lot can be done. Prepaid digital coupons, or digital postage of a sort, can be used to make these off-shore--or in cypherspace, a la the "BlackNet" demonstration I did a few months back, and written about in "Wired"--markets liquid and profitable.) Like a seed crystal dropped in a supersaturated solution, crypto could trigger a phase change of immmense proportions. (The metaphor is slightly awkward, as I see the crypto phase change _increasing_ the number of degrees of freedom, as in the transition from a solid to a liquid to a gas.) The "Oceania" project, in contrast, tends _not_ to produce this kind of phase change. Joe Nextdoor may eventually start using data havens and crypto tax evasion schemes, but he's not at all likely to volunteer to man the oars on a floating barge. (I don't mean to defame the Oceania project. Just my sense of humor.) Ocean-going colonies have not appeared, even by corporations and states, for whatever reasons, so the onus is on the oceanauts to explain just what is out there that is so valuable (that can't be done by ordinary boats and ships that fish, mine for manganese nodules, do oceanographic research, etc.). Merely seeking freedom is probably not enough. Gambling, prostitution, and easy access to drugs and other hedonistic delights may be enough, but I've seen nothing to indicate this type of "Love Boat" is being planned. Just the dreamy ideas about self-sufficiency. A commune by another name. A floating "Hog Farm," with anarchocapitalist ideology replacing Thoreau and Marx. In any case, Oceania-type projects, even if moderately successful (and not just the rusting pontoons I predicted in an earlier posting), are very unlikely to trigger a phase change such as the one I see for crypto. This is why I am currently placing my faith in strong crypto and am so active in the Cypherpunks group. That's one place where the Revolution _will_ be televised. --Tim May -- .......................................................................... Timothy C. May | Crypto Anarchy: encryption, digital money, tcmay@netcom.com | anonymous networks, digital pseudonyms, zero 408-688-5409 | knowledge, reputations, information markets, W.A.S.T.E.: Aptos, CA | black markets, collapse of governments. Higher Power: 2^756839 | Public Key: PGP and MailSafe available. Note: I put time and money into writing this posting. I hope you enjoy it.