Impact of Free Strong Crypto (Essay of sorts)

Timothy C. May tcmay at netcom.com
Sun Oct 2 20:42:32 PDT 1994



A good essay by Black Unicorn (whose physical ID, by the way, is
unknown to us, despite his reputation and digsig). Just when some of
you thought the list was becoming dormant...

(I'll try to respond only to a handful of points, eliding the rest.)

Black Unicorn wrote:

> To me the Cypherpunks represent the drive to free technology from a 
> regimented, collectivist, and centralized regulatory structure.  So deep 
> does this inclination seem to run that even liberal programs that might 
> extend the reach of high technology particularly communications and data 
> storage or processing technologies, through social reform are looked at 
> almost universally with distaste.  There is almost a disgust at the mere 

Yes, it's quite amazing to me that what might be called the
"libertarian agenda" is so little disputed here. To be sure, many are
unhappy with mentions of guns or the like, and protest, but the core
ideas of voluntary interactions are seldom challenged.

This may be a good lesson for the larger political community: on
matters of personal and economic privacy, even modern liberals don't
favor an expanded role for the state.

...
> is sound whatever the political persuasions of the reader.  That being said 
> let it be known that I consider the following as a "Cypherpunk victory."
> 
> 1.  Complete freedom of technology, particularly encryption technology, 
> regulated only by market forces.  This implies the lack of import/export 
> restrictions, and a complete absence of projects designed to limit 
> technology, or to standardize it for nefarious ends like Clipper.

I think we almost have this won. There are so many degrees of freedom,
so many ways to move data, that attempts to control data flow seem
doomed. We can't stop lobbying, of course. (The FBI had a comment that
if Digital Telephony is delayed by two years--and this was said (by
Kelleher, I think, though I don't feel like grepping through my
archives to find the exact quote...it may be in the FAQ) in early
1994--that this delay would make it "too expensive" to ever try it
again...monkeywrenching the EFF's Wiretap Bill seems like a good goal
to me.)

> 2.  A wide market of hardware and software products allowing, among other 
> things, strong, transparent cryptography for voice, data, fax, cellular, 
> and video communications.

This one I am less sanguine about. PGP is just too hard to
use--witness the incredible amount of time being consumed in debates
about it, about features, bugs, etc., and the difficulties in
integrating into ordinary work habits, for most people. Commercial
crypto is not moving very quickly.

> 3.  Active and profuse vendors of related applications of the above 
> technologies, including among others, digital banking, and anonymous mail 
> (in my use including video, voice, data, and true digital cash).
> 
> I think these are all possible (however likely or unlikely) within the next 
> five years.

I thought it would take 5 years, too. Back in 1988. Oh well. But by
1999, lots of time for change. And we may see a digital cash
application just "pop out of nowhere," just as VCRs did.

> likely scenario to me in the next five years).  Given these facts, how is 
> government likely to adjust?  Surely not without a fight to survive even in 
> the face of what many see as impending doom for revenue collection and law 
> enforcement.

By the way, I devoted a *lot* of space in my Cyphernomicon FAQ to
issues like this, including one section entitled "How will Crypto
Anarchy Be Fought?"

> I have often commented that Cypherpunks see things about 6 months to 2 
> years before the popular culture begins to catch the scents.  It is 
> surprising to me then that the list (as far as I know) has been so stuck in 
> the present with regard to the likely reaction to long term Cypherpunk 
> goals.  Most political discussions deal either with the present Federal 

Again, I think my FAQ has a suitably long term focus. Especially on
the implications of anonymous systems, digital cash, data havens,
etc., on societal systems. Lots of amazing implications. Some I no
doubt have wrong, but I don't think I'm mired in the present.

And I think we have indeed seen things coming before a lot of others
did. The latest such alert, by Carl Ellison, myself, and others, is
about "software key escrow," or what Carl dubs "GAK" (government
access to keys). I think SKE is the wave of future repression, worth
starting to fight now. The popular media is largely oblivious to it,
as usual.  (John Markoff, of the NY Times, is on top of it, more so
than most of us, and is waiting for the right time to do something on
this.)

> Government threat, (Clipper, Digitel, Information Superhighway) or with the 
> long term promise of Cypherpunk technology, but not the future Federal 
> Government response to said technology.  Partly I think this is 
> attributable to the perception that the Federal Government is as much 
> behind the times as popular culture.  Technically this is probably true on 
> the whole.  (Dorthy Denning being short sighted enough to insist that law 
> enforcement needs wiretap ability because they have always had such an 
> ability.  Ms. Denning's similarly dense arguments based on statistics to 
> the effect that since law enforcement has used wiretaps so often, they must 
> be indispensable and thus must be preserved.  What Ms. Denning never 
> mentions, either accidentally or with intent, are the alternatives).  But 
> it is equally true that there is, or there appears to be, some foresight on 

Dorothy Denning is deeply involved with SKE, working with Miles Schmid
of the NSA and the folks from Trusted Information Systems (according
to Whit Diffie, who saw a joint presentation by the bunch of them in
Karlsruhe, and their glee that the Micali escrow patent will likely be
overturned due to prior art in Europe).

> How will the complete inability of law enforcement (Federal or Local) to 
> conduct wiretaps impact collection?  Those who think that law enforcement 
> will just have to go away might want to reconsider.  Instead I think that 
> law enforcement will simply become much more intrusive as a response to the 
> unavailability of easy interception via wiretapping.

I don't think the state will fold up its tent and fade away (to mix
some metaphors). I think we'll see some "Wacos in cyberspace," some
invocations of the Four Horsemen of the Infocalypse (Terrorists,
Pedophiles, Money Launderers, and Pornographers), and some repressive
laws involving national ID cards, reporting of all economic
transactions on the Net, etc. Lots of things they can do.

Lots of people will be killed by the thrashings of the dying beast.

...
> war on drugs.  Instead Federal and Local law enforcement will begin to rely 
> on Human Intelligence as well as more intrusive site collection to work 
> around the technologically intensive and prohibitively expensive Signals 
> Intelligence in the new era.  Courts, tired of dismissing hundreds of 
> otherwise legitimate looking cases, are likely to judicially erode the 
> constitutional protections protecting citizens from search and seizure 
> particularly with reference to an increased law enforcement reliance on 
> more intrusive room surveillance equipment.  In the context of the Fourth 

I don't think HUMINT is too likely to increase, as it costs so damned
much to hire all those agents. 

I do think we'll see--and are already seeing--erosions of formerly
sacred rights. (Black U. and I are obviously addressing our comments
to mostly American issues. Your mileage may vary.) "Conspiracy"
is already a catch-all, and the plethora of laws that nearly everyone
is always breaking can be used to cut deals. A nation of cybernetic
Pavel Morozovs, all informing on our neighbors. (Ironically, this
erosion could _accelerate_ the shift to more secure systems, as even
average people fear being caught up in alleged crimes.)

> Amendment's structure this becomes a particularly difficult problem.  The 
> Exclusionary Rule provides for the rejection of evidence collected in 
> violation of the Fourth Amendment (there is no effective civil remedy) but 
> as many commentators have pointed out this is a particularly difficult 
> thing for a judge to do.  Exclusionary Rule motions come in the context of 

Also, many illegal wiretaps and black bag jobs are done not to secure
evidence--which is inadmissable--but in furtherance of investigations,
and to point to evidence they _can_ get a search warrant for.  (I
submit that the FBI wants DT for largely this reason, and all the
calculations of "cost per wiretap" and how they are exorbitantly
expensive miss this essential point!)


> extent.  Targeted political organizations will be infiltrated with a much 
> greater degree of aggressiveness, perhaps even surpassing levels of the 
> 1960's.  Frustration in law enforcement inability to penetrate the more 

Probably true. In all fairness to ourselves, we actually are part of a
larger threat (notice that I'm only calling Cypherpunks a _part_ of
this, as to claim overall credit would be absurd) to the status quo
than the Black Panthers were in the 1960s. Think about it.


> More alarming perhaps are the ramifications for banking transactions.  In 
> the absence of an ability to monitor transactions electronically Human 
> Intelligence will be forced to fill in the gaps, creating a great demand 
> for informants within the banking and financial industries.  The SEC simply 
> will be unable to function as it does today without electronic monitoring 
> of transactions.  Instead brokerage firms, high profile investors and 
> financial institutions are more likely to be attacked with Human 
> Intelligence and informants, perhaps even outright theft of records.  The 
> implications for even the moderate level investor are ominous.

Indeed. But this is already occurring in a major way. The major credit
reporting agencies collude in central ways with the government (as
with the faked credentials used for the Witness Security Program, for
spies, etc.). Banks already collude (BCCI was not a fluke, just a CIA
front bank, like Castle Bank, Nugan Hand Bank, and Bank of America).

Strong crypto and anonymous systems will ultimately be _helped_ by
this duplicity, ironically.

> Given the flexibility of constitutional interpretation demonstrated by the 
> New Deal legislation, is it any mystery that the new law enforcement 
> methodology will be supported by the courts, especially in the face of 
> complete law enforcement breakdown?

I go further on this point even than Black Unicorn does. I think
there's a reasonable chance that a "state of national emergency" will
be declared. Lots of things could trigger this, and I don't think it's
just millenialist paranoia to believe certain Emergency Orders could
be triggered. Military manouvers have planned for this (REX-84,
Operation Night Train, FEMA, etc.). 

> The Cypherpunks must ask themselves how to address these issues, and 
> recognize the potential political impact of high technology and the losing 
> law enforcement battle to keep up.  Would a Cypherpunk victory merely be 
> bypassed by a clever end run?  Is this a case of "Even when you win you 
> lose"?

Important for us to think about these issues, to be sure.

--Tim May


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