Cryptocurrency: Use A Crypto Currency, End A War - A crypto-anarchy specter is haunting the modern world

grarpamp grarpamp at
Thu Aug 5 01:05:38 PDT 2021

Use A Crypto Currency, End A War
June 4, 2014

Morality follows function and Bitcoin has made selective divestment a
lot more functional.

When it comes to the qualities of crypto-currencies the majority of
attention is given to its technical foundations when the most
disruptive quality may be the most simple and obvious of all.

The most subversive effect to come from crypto-currencies will not be
through deflationary qualities that fly in the face of central banking
or preventing too-big-to-fail policies. It wont come from low fees
that make micro-payments possible or its protocol that makes the
financial services industry redundant. It wont be from providing a
more democratic storage of value. It will not come through making you
rich. No.

    Crypto-currencies greatest impact is going to be the ability of
individuals to partially choose the economy they function within.

There Are No More Riots, Only Opinions
Market value of private capital

Market value of private capital (% of national income) — “Capital in
the 21st Century” Thomas Piketty

Gone are the days when collectives demonstrate the “right of might”
that Einstein and Freud eluded to in their era. The #1 book selling on
Amazon right now, Thomas Piketty’s Capital in the 21st Century, shows
(in chart above) that the centralisation of wealth partially
responsible for the rise of foregone socialist and communist movements
has mostly recovered with wealth as centralised today as it was then.
Yet the collectives that organise today (i.e. the Occupy movement) do
so without the the might of then. Why?

Without getting too deep into the wealth-disparity debate I argue that
the time for “right of might” in the street has passed because
capitalism is actually effective in appeasing the majority. This can
be seen in the handling of the recent economic crisis where in some
places the defacto store of value for the middle class, housing, was
considered too-big-too-fail and action was taken to protect it.

Despite the well-being of the majority the wealth debate continues
because of conscious concern for the minorities left out. It just
happens now without the pageantry of fire and picket. Today the will
for might is placated by a once-in-every-4-years vote, the comfort of
opinion collectives that provide physical or digital “i support xyz”
wristbands or gets filtered into emotional but meaningless arguments
carried out through polar opposite news corporations. News consumption
is the processes of choosing an ideological team to cheer for but as a
result ideology becomes a spectator sport and we cannot do much other
than cheering. Or can we?

    News consumption is the processes of choosing an ideological team
to cheer for with the result being that ideology becomes a spectator
sport and we cannot do much other than cheering.

The placation of the majority is a natural and positive effect of
stability. With that the execution of might is more subtle and action
will be more granular (able to choose when to act or not) and more
accessible. In modern design it is said that form should follow
function. This applies to morality and idealism as well. In design
this statement implies that when creating a door any modification or
addition should have function — itself closely tied to intuition. For
morality I apply this to mean that any desired action of an ideal must
be within intuitive reach.

Humour me: More people act on concern for the environment due to wider
accessibility of recycling bins. Greater accessibility enables more
widespread action. But the ability to selectively act provides an even
broader compound effect as wider adoption leads to more exposure. You
may recycle when at home but are less likely to do so when walking
down the street. An “activist” may criticise such inconsistency but
this criticism is our religious gene getting the better of us. In-fact
this impurity leads to broader adoption of the ideal itself. When you
do recycle your child will become exposed to the question. If forced
to consistency function dominates with people likely abandoning the
ideal all together.

It is both accessibility and choice of when to and not to participate
that is powerful. This is what crypto-currencies provide in a new way.
Using A Dollar Funds One Electron Of A Drone

We understand that the tax we pay directly supports the actions of the
government we pay them to. This has been a constant for so long that
anything but moral indifference to the act makes one appear departed
from reality. Questioning this constant requires such effort that it
is not possible for anyone but the most rich. This is unlikely to
change. But the use of a governments currency also provides support
for their actions. By how much I could not say but for the first time
in history we can choose to sometimes not provide that support. With
crypto-currencies this option has become more accessible than ever
before. This is action through exit rather than vote.
Case In Point

To understand this take the Palestinian/Israel conflict as an example.
The entire population in the Palestinian Territories use the Israeli
Shekel as their base currency. Not only but Palestinians pay their
taxes directly to Israel which can use their discretion in withholding
these funds. The interest for an alternate economy within this group
would be very strong. Further, there are many Israeli-Arabs (%20 of
total population) that more directly identify with the day to day
hardships that Palestinians are faced with. Add to this many
left-leaning organisations of non-Arab Israeli’s and you are presented
with a large collective that would all be interested in selective
divestment from the Israeli Shekel.

Boycott is one thing. Sanctions are another. But choosing to
selectively participate in an alternate economy from one you disagree
with in the same manner you choose when to recycle a can is a matter
of convenience but none-the-less powerful.

What do I mean by “selective”? I figure I eat at a restaurant about 4
to 8 times a week. For the foreseeable future I will eat at a Bitcoin
accepting establishment at least once a week. I encourage you to join
me (Berlin, Zurich, Jerusalem — when i’m there). You can perceive this
action as no more meaningful than wearing a cure cancer wristband. In
some sense it is exactly that. Such selective action makes me feel
better. But with crypto-currencies it does have actual impact on some
governments actions.

tl;dr Have a cause? Riots are yesteryear. Make any action accessible
or forget it. Crypto-currencies present new methods for partial and
selective protest. “Using One Dollar Funds One Electron Of A Drone.”
Building minor alternate economies from within is as selfish as
wearing a “i support xyz” wristband but with actual impact.

“A specter is haunting the modern world; the specter of crypto-anarchy”
May 22, 2012

We are entering the “Information Age” but not at the hands of Apple,
Google, Microsoft, Twitter, or Facebook though they each have their
role. No, if one wants to observe when we reach the apex of this era
they would be advised to study the participants of and ideas
cultivated on the Cypherpunks mailing list nearly 20 years ago. The
list was open to anyone and was the stomping grounds for such people
as Julian Assange (Wikileaks). It was the breeding ground of
decentralized banking systems, anonymous currencies and anonymous
network technologies. Many of these systems very recently left their
incubation phase and have the potential to reshape social structures
with weight akin to that of the “Industrial Revolution”.

    The people in this room hope for a world where an individuals
informational footprints — everything from an opinion on abortion to
the medical record of an actual abortion — can be traced only if the
individual involved chooses to reveal them; a world where coherent
messages shoot around the globe by network and microwave, but
intruders and feds trying to pluck them out of the vapor find only
gibberish; a world where the tools of prying are transformed into the
instruments of privacy.

    There is only one way this vision will materialize, and that is by
widespread use of cryptography. Is this technologically possible?
Definitely. The obstacles are political — some of the most powerful
forces in government are devoted to the control of these tools. In
short, there is a war going on between those who would liberate crypto
and those who would suppress it. The seemingly innocuous bunch strewn
around this conference room represents the vanguard of the pro-crypto
forces. Though the battleground seems remote, the stakes are not: The
outcome of this struggle may determine the amount of freedom our
society will grant us in the 21st century. To the Cypherpunks, freedom
is an issue worth some risk.

    Steven Levy describing a Cypherphunk gathering. Wired Magazine,
1993 (archive)

In the 80s and 90s cryptography was considered a weapon by most
governments, including the US. The latter tried to restrict its export
to anywhere but Canada. This was absurd because it assumed that only
American scientists knew how to build strong cryptographic systems and
also because enforcing such a law was impossible. The truth was that
the US depended on cryptographic systems developed by European
scientists, among others, as much as they did on their own.
Cypherpunks knew this and many of them were, after all, the same minds
that created these systems. They took to printing the algorithms in
books and t-shirts, which were difficult to classify as weapons whose
export could be restricted. By the 90s governments too realized these
restrictions were baseless and immensely counter productive to their
own security and removed the export controls. However, the Cypherpunk
list and community that developed during that period remained active.

While “cryptography” sounds too scientific to be at the pinnacle of
freedom or revolutions, today, we are starting to see that it is
becoming intertwined with both. One of the ideas developed from within
the list was anonymous networks. Specifically Tor, “The Onion Router”.
This network is used by dissidents in such places as Syria and Iran to
communicate anonymously online about crimes against humanity. For this
reason the project is sponsored in part (archive) by the US
government. During the Arab Spring when Mubarak’s regime shut off
access to the Internet in Egypt Tor saw a spike of traffic (archive)
and was one of the only ways that the Egyptian people could still
access and communicate online. Tor is also used by such organizations
as Wikileaks and Openleaks to protect whistle blowers and expose
secrets in the west and for this reason the US Justice Department is
conducting a secret investigation on one of the Tor developers;
invoking state secret laws to obtain email and other private details
without due process.

Inherent in the DNA of any technological system is a scientific method
of consistency. While western justice and social systems sway, bevel
and try to inherit consistency they rarely formulate without flaw.
When I was young my parents, devout Christians, decided Jesus was a
Jew and if he kept the Sabbath on Saturday than so should we.
Initially we avoided all use of electricity, as commanded by
rabbinical law. For a 12 year old digital native this was quite a
hardship. After a year they decided turning on lights was acceptable
and it was not long before the TV was permissible. For all the
hardship it was this inconsistency that bothered the most. Eventually
I learned that this inconsistency was the most beautiful trait of my
parents; what exposed their humanity.

Inconsistency will always exist in social systems but much like in
religion we are cursed with the idea of obtaining absolutism. That it
is possible to make a unified theory of perfection be it in relation
to sin or justice. In technology any inconsistency in a theory is
called a “bug” and one that can be remedied. As technology and social
intuition become more entwined it becomes an attractive laboratory to
pursue more perfect theories. The experimentation this has inspired is
already creating friction between new and old models. The results are
often difficult for social structures to respond to using traditional

As an example consider the brief history of file sharing. When the
first popular music sharing system arrived, Napster, it took time
before the company was eventually shut down. By then technology and
collective intuition had evolved with it to the point that this did
not matter. New systems popped up in other jurisdictions and
eventually new protocols were developed that decentralized
responsibility from any single entity (bittorrent) making it near
impossible to shut off. Today while Sony or Virgin Records will send
thousands of 900€ fines per day to kids found to be downloading music
it will have absolutely no effect on how commonplace this act will
continue to be. Our intuition had already evolved. So too have
business models evolved with it to turn this intuition into a benefit
and not a harm.

Wikileaks is itself just the Napster of its field (“making governments
more transparent”). The people that want those involved arrested or
killed lack the foresight to see that there are many more stages of
evolution here. They also fail to see that it is the imbalance of such
reactions that actually pushes the stages of this evolution further
and faster. Openleaks is a slightly less centralized system which is
another step. We have yet to see what the truly decentralized
equivalent will be.

The evolution of socially progressive technology requires a market.
Twitter did not create a market for communicating at 140 characters.
Facebook or Myspace did not create a market for social networking.
Rather, people already had the desire for these forms of communication
but lacked the tools. One can apply this to Wikileaks, anonymous
currency or even Tor hidden services. There is a current effort
(archive) to incriminate Julian Assange and close Wikileaks. This will
not have the desired effect, reason being that there is now a market
for this type of information.

Jay Rosen, professor of journalism at NYU, stated eloquently why this
market exists when he said the watchdog press had died. As an example
he gave the failure of the press to question the U.S. when it went to
war in Iraq with a false case, explaining that they lost legitimacy:
“The legitimacy crisis extends from the Bush government itself to the
American state as a whole and the American press and the international
system. Because all of them failed at one of the most important things
that a government by consent can do which is reason giving.”

To understand how the markets for subversive technologies evolve
consider the history of the Internet Domain Name System (DNS). When
you put “” into your browser this name is translated to a
server address. The control of this system is managed by ICANN, a
governing body ultimately controlled by the US government. In the 90s
a heated international debate started concerning how the US government
would use this power. They assured people that they would not use it
for political gain and were only interested in maintaining the
openness of the Internet.

Fast forward to last year when the US Department of Homeland Security
(DHS) started shutting down websites (archive) by manipulating this
system (archive). When did ICANN change its motive of protecting the
openness of the Internet to managing grievances of US corporations?
When did the DHS move away from its focus of protecting borders from
terrorism? It is in response to this action that developers have
started working on different systems that would not just remove
control of the name system from the US hands: Namecoin, p2pdns and
others would remove control from any centralized authority.

The idea of decentralizing power through code can be found in other
Cypherpunk ideas. Consider anonymous currency. 3 weeks ago I purchased
nachos and 3 drinks for friends and myself at Room 77, a restaurant in
Berlin near Schönleinstrasse, using the anonymous currency bitcoin.
Bitcoin allows participants to exchange services and purchase goods
without either party having to reveal their true identity. This is
akin to cash, also an anonymous currency.

I obtained the currency by purchasing it using a pseudonym and a
prepaid credit card. You can purchase from individuals online but I
used a Bitcoin to Euro exchange website instead. At the restaurant,
after finishing the meal and a discussion about Corporate Social
Responsibility vs Shared Value we went to the counter. You can pay
with a few clicks using a smart phone but my phone is anything but
smart. So I opened my laptop, started the bitcoin client and took the
restaurants bitcoin address. I transferred 10BTC (about 30€) to Room
77’s bitcoin address, waited a few seconds for the cashier to confirm
the transfer and then left. When I got home I realized I forgot to
leave a tip so I transferred another 2BTC. The subversive element of
bitcoin lay not as much in the nature of transaction as it does in how
it is structured and controlled.

The value of bitcoins are determined by common market principles.
However, unlike Fiat currencies where a central bank can print or
remove money from circulation to influence this market, the central
bank for bitcoin is peer-to-peer and decentralized. No one can create
or manipulate bitcoins without the consent of every participant in the
system. To misquote economist Milton Friedman, with bitcoin “we are
[not] all Keynesians now”.

Purchasing nachos with this system felt much like receiving my first
email. Despite its flaws, the idea of anonymous and distributed
currency has the potential to effect central banking in the same way
email affected the postal service.

While some of the systems discussed on the Cypherpunk list are leaving
incubation phase others still are waiting for the first line of code
to be written. In 1997 Jim Bell, a student of electrical engineering
at MIT, wrote a paper titled “Assassination Politics” (archive). He
was inspired by Freud’s description of power structures:

    The superior strength of a single individual could be rivaled by
the union of several weak ones. “L’union fait la force.” [French; In
union there is strength.] Violence could be broken by union, and the
power of those who were united now represented law in contrast to the
violence of the single individual. Thus we see that right is the might
of a community.

    Sigmund Freud, letter to Albert Einstein 1932

Assassination Politics was an idea for a system that uses anonymous
networks and currency to allow participants to place a bet guessing
the time of death for someone. The winnings are awarded to whomever
made the most accurate guess. As the potential winnings grow the
likelihood increases that a professional assassin would place a bet.
Who would know the time of death for, say, the Syrian dictator Bashar
Assad? His God, an assassin or perhaps his cook? The publication of
his paper brought a great deal of scrutiny from the FBI. He was
eventually imprisoned for tax evasion in 1997 and remains in prison to
this day.

At this point one may have the impression that Cypherpunks were
Anarchists, in the modern sense of the word, blindly bent on the
destruction of power structures. Rather, the large majority were
intellectual observers with the distinct difference of having an acute
understanding of technology and discrete mathematics. As it was a
public list, anyone could participate and you can find archives of the
discussions online.

Recently I have been working on a theater project with Rimini
Protokoll (archive) titled “Herrmann’s Battle”, inspired by the play
“Hermannsschlacht” written by Heinrich von Kleist. In this play, still
running, we explore subversive technologies. We show how hitmen offer
their services in exchange for Bitcoin: 5000€ in bitcoin as a setup
fee, 20000€ upon completion. We also describe a modification on Jim
Bells’ original idea.

Imagine a market where you place a bet on the time of death for
someone but have to choose between Bashar Assad or Julian Assange. In
this model the winnings would be given to whoever guesses most
accurately the time of death for the target that currently has the
highest price on their head. While some may have little issue with
putting 10 Bitcoins on Assad they have to consider and compete against
other groups, perhaps government institutions, that would rather see
Assange the target. In this way the idea of morality itself takes on
characteristics of a competitive globalized market.

I present these ideas not for dramatic effect and not because I
believe they should exist. Rather, I present them to show the extent
that technology could effect society. The extent that it will, and how
it will depends on how well we understand collective intuition and the
markets that support such ideas and if we can find ways to respond
that acknowledge the peoples desires rather than only reacting to
protect existing models of “right and might”.

In 1988 one Cypherpunk accurately described the effects of anonymous
networks and currency and other technological developments that we are
starting to understand today:

    A specter is haunting the modern world; the specter of crypto-anarchy

    These developments will alter completely the nature of government
regulation, the ability to tax and control economic interactions, the
ability to keep information secret, and will even alter the nature of
trust and reputation.

    The Crypto-Anarchy Manifesto, Timothy C. May, 1988 (archive)

If asked what my opinion is of these developments, despite how it
sounds, I see some reason for measured optimism and perhaps necessity.
Remzia Suljić, one of the experts in the Rimini Protokoll theater
production, after one performance was asked how she felt about
exposing her experiences on stage. She answered: “I lived through 3
years of systematic isolation, humiliation and eventual massacre in
Srebrenica of which the European people noticed only a few days of”.

Today we are more aware and exposed to such events and problems of the
world. In the past 20 years we have watched technology completely
change the way we communicate, consume and define a sense of
community. The latter taking formations that are no longer tightly
tied to geographical social definitions. It is likely this that has
brought about the demand for equality from people that we are
witnessing today.

When the uprising took place during the 2009 elections in Iran the
people of the world were watching intensity. Every hour news sites
were updated with the latest information from twitter or other
sources. Google had a dedicated page for videos coming out of Iran.
And then Michael Jackson died. We still have some ways to go until our
awareness turns into meaningful action. In this case I do not see
distribution of power as the problem or solution. Rather the issue lay
in distribution of responsibility.

This entire discussion has focused primarily on decentralization of
“Cathedral” based definitions of power and the role of technology
therein. What we have not touched, and the reason for my cautious
optimism; the reason i feel technology as a whole might make us more
aware collectively is that inherent in any decentralization of power,
from Freud to Assange, is the decentralization of responsibility. We
cannot contemplate one without being aware of the other. I can
understand questioning this theory and I wholly agree these
technologies bring justifiable concerns, but those that respond
instead with fear I would argue that my fantasy has as much of a
chance as your fear.

In A Cypherpunk’s Manifesto (archive) written in 1993 by Eric Hughes,
one of the founders for the list, he said “Cypherpunks write code”.
Much of the code is yet to be written.

Nathan Andrew Fain is a hacker, designer and technologist with a split
personality disorder. @cyphunk
research repository of nathan andrew fain / cyphunk
Address: nathan o
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