The Crypto Anarchist Manifesto

Tim May, physicist, libertarian-Randian, cypherpunk revolutionary, has died. Here is his Crypto-Anarchist Manifesto first published in 1992.

A specter is haunting the modern world, the specter of crypto anarchy.

Computer technology is on the verge of providing the ability for individuals and groups to communicate and interact with each other in a totally anonymous manner. Two persons may exchange messages, conduct business, and negotiate electronic contracts without ever knowing the True Name, or legal identity, of the other. Interactions over networks will be untraceable, via extensive re- routing of encrypted packets and tamper-proof boxes which implement cryptographic protocols with nearly perfect assurance against any tampering. Reputations will be of central importance, far more important in dealings than even the credit ratings of today. 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 technology for this revolution–and it surely will be both a social and economic revolution–has existed in theory for the past decade. The methods are based upon public-key encryption, zero-knowledge interactive proof systems, and various software protocols for interaction, authentication, and verification. The focus has until now been on academic conferences in Europe and the U.S., conferences monitored closely by the National Security Agency. But only recently have computer networks and personal computers attained sufficient speed to make the ideas practically realizable. And the next ten years will bring enough additional speed to make the ideas economically feasible and essentially unstoppable. High-speed networks, ISDN, tamper-proof boxes, smart cards, satellites, Ku-band transmitters, multi-MIPS personal computers, and encryption chips now under development will be some of the enabling technologies.

The State will of course try to slow or halt the spread of this technology, citing national security concerns, use of the technology by drug dealers and tax evaders, and fears of societal disintegration. Many of these concerns will be valid; crypto anarchy will allow national secrets to be trade freely and will allow illicit and stolen materials to be traded. An anonymous computerized market will even make possible abhorrent markets for assassinations and extortion. Various criminal and foreign elements will be active users of CryptoNet. But this will not halt the spread of crypto anarchy.

Just as the technology of printing altered and reduced the power of medieval guilds and the social power structure, so too will cryptologic methods fundamentally alter the nature of corporations and of government interference in economic transactions. Combined with emerging information markets, crypto anarchy will create a liquid market for any and all material which can be put into words and pictures. And just as a seemingly minor invention like barbed wire made possible the fencing-off of vast ranches and farms, thus altering forever the concepts of land and property rights in the frontier West, so too will the seemingly minor discovery out of an arcane branch of mathematics come to be the wire clippers which dismantle the barbed wire around intellectual property.

Arise, you have nothing to lose but your barbed wire fences!

Addendum: Inspiring! But see my post The Demise of Crypto Anarchy from 15 years ago.

Comments

"...crypto anarchy will create a liquid market for any and all material which can be put into words and pictures."

How much of what you buy and sell is purely electronic data of some kind? And for how much of THAT would it be necessary (or even advantageous) for the transactions to be totally anonymous? Almost none, I would think. And how much interference are governments imposing now on sales of electronic data now?

The markets for electronic data are completely created by the governments now via copyright laws. Without those laws and their effective enforcement, the price of all digital goods would quickly fall to their marginal cost, i.e. zero. An implication of cryptoanarchy is make the copyright laws impossible to enforce.

To some extent this has already happened; think about how easy it is to watch a new movie from one of the zillion pirate sites on the internet with virtually no chance of getting caught breaking the law. Well, when the various crypto and decentralized internet technologies mature, it will be even easier and the availability even better thanks to the operators of these kind of pages (or whatever their future equivalent is) being able to mask their identities better.

"The markets for electronic data are completely created by the governments now via copyright laws. "

No, they're not. For example, suppose company A commissions a custom market-research report or bit of custom software from company B. Copyright is irrelevant since the information has a very short shelf-life or is useful only to the customer and, in any case, neither party has an incentive to resell or leak it.

"think about how easy it is to watch a new movie from one of the zillion pirate sites on the internet with virtually no chance of getting caught breaking the law"

But that's a small niche AND it doesn't involve contracts or transactions. Come up with other examples that actually do. Also, in the arms race between governments and internet anonymity, who is actually winning (are Chinese internet users more and more able to evade government limitations easily and without risk -- or is the Great Firewall gaining the upper hand)?

> Copyright is irrelevant since the information has a very short shelf-life or is useful only to the customer and, in any case, neither party has an incentive to resell or leak it.

Alright, you can find cases of someone selling digital goods that doesn't involve copyright laws.

> But that's a small niche AND it doesn't involve contracts or transactions.

No that small. Maybe rich people like you and me and the rest of the readership of this blog don't really care, but for a large number of poor(ish) people in the world, illegally copying copyrighted materials is the only way to enjoy them. And not involving contracts or transactions was my entire point. Watching movies and downloading ebooks is SUPPOSED to involve contracts and transactions if done via legal means. The anonymity of the internet allows people to bypass these formalities entirely.

This is, in fact, something that I think Tim May got wrong: transfer of digital things from one person's computer to another is something that involves transactions and formalities only because the government basically forces them. In the world of cryptoanarchy, the information will flow freely without friction and at zero cost.

Economically speaking, it is probably a bit difficult to measure how large is the impact of people downloading copyrighted stuff illegally. Many of the people who do so, wouldn't have bothered with paying for the goods anyway if illegal downloads were impossible. Then there are second order effects; how much was the productivity increased by young people downloading Adobe Photoshop illegally and learning it before starting to do digital photography/image editing professionally (I picked this particular example because this used to be something many students did back when I was in the university. This was before Adobe offered basically free student licenses to everyone)?

'Watching movies and downloading ebooks is SUPPOSED to involve contracts and transactions if done via legal means.'

Well, Baen would have disagreed with you in terms of their Free Library and bundled CDs, but that was before they had to accept Amazon's terms to use Amazon as a distributor.

No, Baen had contracts and transactions. Their contracts with their authors specifically allowed for non-DRM books. Baen wasn't a pirate site illegally providing material.

And where have the massive data leaks come from since then? Off central servers, as a result of the human element, all made possible by the ability to transfer massive amounts of ones and zeros on tiny memory sticks, portable hard drives, or digital lines. It's less cypherpunk and more same 'ol same 'ol on steroids.

So this is how civilization dies... with tamper-proof boxes.
In other news, Brazil has officially refused to invite Venezuelan dictator Maduro for the inauguration of President Captain Bolsonaro.

As I pointed out (as if that were necessary) in my comment to Cowen's last blog post, the dominance of the Silicon Valley culture in America means the dominance of software, as escalating dominance of software. Silicon Valley is incapable of building stuff; thus the emphasis on electronic data and software. All of life will become virtual, a dystopian existence brought to us by the boy wonders of Silicon Valley. In the ultimate irony, totalitarianism will be the legacy of the libertarians of Silicon Valley.

Reminds me of the Starship song:

https://en.wikipedia.org/wiki/We_Built_This_City

Already as a teenager in Norway it rubbed me the wrong way, I considered the artists incapable of building anything. In retrospect, they were probably talking about "building" like Obama talked about "community organizing".

Respectfully, I think you misunderstand the nature of software and software culture. Some, such as video games, are similar to what you describe, but a much larger amount of software intends to optimize interactions with physical assets and infrastructure. As an example, Manufacturing is highly optimized, but orchestration of supply chains and shipping coordination is less so. Much of Software exists to improve efficiency within and between existing markets and does not benefit from a reduced demand for the physical world. Uber, Autodesk, Amazon, Apple, etc.

Which is more likely to result in totalitarianism: order and stability or disorder and instability? Let history be your guide. The belief (and it is only a belief, like any other religion) that anarchy will result in freedom defies both logic and history. So-called tech is mostly about manipulation. Is that the path to freedom or slavery? Many readers of this blog support Trump, a con man if there ever was one. He is a master manipulator, making him a fellow travelers of the manipulators in Silicon Valley.

Anarchists have threatened the nation since its founding. Washington and other delegates in Philadelphia viewed the threat posed by the anarchists as equivalent to the threat posed by the British; indeed, Washington feared that the disorder and instability created by the anarchists would embolden the British to invade the new nation and exploit the disorder and instability. The religion of disruption sometimes reflected at this blog makes me wonder if chaos isn't the object. Anyone who believes the masers of manipulation will be benevolent dictators is ignorant of history, and just plain ignorant.

"Which is more likely to result in totalitarianism: order and stability or disorder and instability? "

Whichever one results in the perception of a serious degradation in the quality of life.

He gets his metaphors backwards. Barbed wire greatly increases the ability to assign property rights, but crypto anarchy greatly reduces it. An invention that enabled people to easily pass barbed wire would have been value destroying. May's analogy suggests that crypto anarchy is more than likely to destroy value.

Barbed wire increases the value of rival goods but not necessarily not rival goods. Perhaps society is better off with free information and free access to all ideas even if inventors are less compensated. In my view know-how is much more valuable than IP rights anyway - very few people can build high efficiency jet engines even though practically all the information to do so is freely available. This will become increasing so as goods and services become more and more complex.

@Asher, @ChrisA - as a metaphor, barbed wire is easy to understand, and I agree with Asher, but in fact, in the 'wild West', barbed wire had nothing to do with stopping cattle drives. See: On barbed wire from Walton & Rockoff, in History of the American Economy (10th edition, 2005): “The long drives [of cattle] ended abruptly in 1885, not because of the advent of barbed wire (as popularly believed) but because northern cattlemen organized and created new institutions to curb the overstocking of the northern ranges. The passage and enforcement of quarantine laws kept out the distant Texas herds" (citing David Galenson, “The End of the Chisholm Trail”, Journal Of Economic History, 24(2), (June 1974): 350-364.

The metaphor was a little confusing to me, and I find myself wanting to work the branding iron into it somehow.

Aside: if you should ever take the little shuttle bus tour of (a small portion of) the King Ranch, ask them to stop at the old weaver's shed, where they used to weave saddle blankets and such. There's a wall of dozens of brands that was assembled over his career by an employee of the Southwestern Cattle Raisers Association. The Golden Arches immediately catches the eye.

"work the branding iron into it somehow."

That would be digital watermarking.

Asher said, "May's analogy suggests that crypto anarchy is more than likely to destroy value."

True. Why make a movie if everyone can steal it.

I know I haven't painted a picture since the invention of photography.

How often do you execute a financial transaction "totally anonymously"? If for most people the answer is "never", then it's safe to say (after 26 years) that he wasn't even close to being correct. I'd say he missed the boat, big time.

But if you want a prediction which will almost certainly be true 26 years from now, here it is: 2044 will be very similar to 2018. There will be crime, terrorism, war, the whips and scorns of time, oppressors' wrongs, the proud men’s contumely, the pangs of despised love, the law’s delay,
the insolence of office, and the spurns that patient merit of th' unworthy takes. Also by 2044 how we spend our time, what we spend our money on, and what we're afraid of will have (superficially) changed in surprising ways.

And there will be no curiosity, no enjoyment of the process of life. All competing pleasures will be destroyed. But always — do not forget this, Winston — always there will be the intoxication of power, constantly increasing and constantly growing subtler. Always, at every moment, there will be the thrill of victory, the sensation of trampling on an enemy who is helpless. If you want a picture of the future, imagine a boot stamping on a human face — forever.

Não se preocupe. Tudo acaba em samba.

Not always.

Let me guess: libertarians will NEVER conquer the world . . . .

Yes, that would be the antithesis of libertarianism.

"What is the best in life, Conan?"

"To participate in a market with your enemies, see them freely interacting with you and living as they please, and to hear the celebrations of their women as they find really cool clothes in the marketplace."

It just doesn't have the same oomph, somehow.

Crypto anarchy, meet China's "social credit" system, the tracking of your every movement via the GPS in your cell phone, and surveilance drones.

'Computer technology is on the verge of providing the ability for individuals and groups to communicate and interact with each other in a totally anonymous manner.'

No, it really isn't.

And if MAC (though that is at least somewhat spoofable) or IMEI say nothing to you, then you just might believe such idiocy at face value.

He said technology would give people "the ability" to communicate anonymously, not that everyone would be anonymous by default. I guarantee you people are currently interacting with total anonymity somewhere right now. IMEI is only a problem if you insist on using your personal mobile phone for such communications.

'"the ability" to communicate anonymously'

There is a joke along the times that the only way to have a truly private conversation is to have had it a century ago in the middle of a field.

'I guarantee you people are currently interacting with total anonymity somewhere right now'

To each other? Maybe. In the sense that the fact they were communicating with each other being unknown? Pretty unlikely, to the extent they were using any networking technology of any variety involving a distance of more than a few meters, and that only assuming that absolutely no one was already interested in them. And the number of people believing they are communicating anonymously is likely several magnitudes greater than the number of people who are.

What is true is that not all communications between all devices is captured all the time. That is not a guarantee of remaining anonymous, however.

The efforts to unpeel Tor are fascinating, for example, and show just how far signals intelligence is able to extract information which can be used to remove the illusion of anonymous communications. (Encryption is something else - secret messages between two parties using something like a properly generated one time remains eminently possible, but not in a context that ensures both parties remain anonymous.)

one time pad is the correct term, not merely 'one time'

I remember when you used to be able to enter username CYPHERPUNKS password CYPHERPUNKS for most sites and have it work. RIP

In other words, May was another Boomer Extropian who focused on the wrong problems and fell behind the times. It's funny how much of the "futurism" of the 1990's seems irrelevant now. The real energy we're seeing in in the white Millennial techies is showing up in white nationalism, because they understand that you can't maintain a technologically and scientifically advanced civilization after white people disappear.

I don't recall if May was ever signed up for cryopreservation. He couldn't have gotten one with plausible integrity of his connectome any way if he died unattended at home and his death wasn't noticed for hours or days.

I'd like to point out that my handle was a Julian Assange joke and nothing to do with a sad racist who thinks he uses his genes for pale skin to operate technology.

Re: "libertarian-Randian"

Another tell of the Boomer Aspie, in other words. It's time to set Ayn Rand aside, because her philosophy is a phony way of seeming to be edgy and radical that won't inconvenience your life. The Randian can complain publicly about altruism, collectivism, naturalistic art and Immanuel Kant all he wants, and no one in power will bother him.

By contrast, if you're a white man and you really want to oppose the people in power, expect to be punched in public, doxxed, blocked from entering certain countries, fired from your job, deplatformed from the internet, deprived of online financial services, have the size of your penis questioned and so forth.

Nothing of the sort happens to Rand's followers. The difference shows what our elites really care about, and whom they consider their real enemies.

You poor snowflake! Has all that happened to you, hun? I'm so sorry.

https://www.bbc.com/news/blogs-trending-43393035

I do suppose two of these national security threats were not questioned about the size of their manhood!

this is true. I don't know the real name of the friend of a friend who sells high THC marijuana. reputation first.

around the same topic: intellectual property is useless if you don't have the discipline to work to make it something saleable. damned substances that release endorphins without doing nothing...

These techno-libertarians ignored the economic aspects of the issue--government contracts were and remain are a significant source of demand for tech. Though techies are probably more libertarian on average than the general population, there are still plenty who will take any well-paying work regardless of the political dimension. There is plenty of first-class tech talent working for the NSA, CIA, etc. The techno-libertarian vision only has a shot if more innovation is shifted from the government and government contractors to global consumer Internet companies, which have more ability and incentive to avoid government contracts, and those companies can pay high wages and absorb enough talent to crowd out government tech hiring.

Yep. I think there are quiet agreements between NSA and tech giants like Google and Facebook that allow the NSA to harvest data for a fee. Same for Microsoft as well. I think these agreements came into play during the tech crash, which is when 9/11 happened. I think this is how these companies survived the tech crash and why Google and Facebook did not go the same way as Digital Alta Vista and MySpace. I also think that the Government agreed to pretend to "loose" the anti-trust case against Microsoft in return to making deals with NSA. In other words, all of the current tech giants are essentially government contractors. This is the dirty secret of the tech scene today.

Apple refused to play ball (for a while) and lost several patent infringement cases that they should have won.

A lot of people writing crypto-anarchism off as silly science fiction. But nothing has made the state sweat as much in the past thirty years. Governments have invested tremendous money, time and effort to combatting the perceived threat. From the thousands of NSA consultants looking for zero-day exploits, to the vast KYC gestapo to prevent anonymous financial transactions, to PRISM and national security letters at tech centers, to regulations on the export of encryption, to internet firewalls in nations around the world.

Admittedly, so far the state has been winning these battles. Overall we probably have less privacy, anonymity, and freedom than in 1992. (To be fair though, it's not a total victory. A reasonably tech savvy person can buy drugs off the darkness or pirate movies with virtually zero personal risk.) But it's not for the lack of trying on the part of the state.

If the actions of governments around the world are any indication, crypto-anarchy was and remains a major threat. It's a constantly raging battle between the side of liberty and the forces of soft totalitarianism. Who knows how the pendulum might swing in the next couple decades.

I agree that its still an on-going conflict, between governments and other large scale entities on one side and free individuals on the other. David Brin wrote a book where it goes the other way, towards complete transparency, meaning where even governments become completely transparent. I still think which way it goes will be determined by technology. Will truly unbreakable encryption lead to complete anonymity? Or will there be some technology to render all encryption obsolete and everything transparent? I think it could go either way.

'Will truly unbreakable encryption lead to complete anonymity?'

Obviously not, as a properly generated one time pad is unbreakable encryption. However, it is in the nature of a one time pad that both parties are not anonymous.

It seems as if some people here are unaware of what signals intelligence is capable of, and why signals intelligence is not so concerned about encryption per se.

Call it the Domino order effect.

Another fun bit of technological futurism that is in dire straits is Open Source Software. It looked like it was going to take over all of tech for many years: Things like Linux, Apache and Postgres putting products from traditional computer companies to shame. Then came companies that relied on open sourcing their core products, and selling consulting, support, or premium add-ons. But The coming of AWS, Azure and Google Cloud has made their models very dire: Now Amazon gains the expertise, builds the add-ons themselves, and competes with the open source based companies directly, but without doing a single open source contribution.

I don't think it's going to be quite the death of open source, but few predicted that what Open Source adoption would do is help the largest companies and wipe out a lot of small companies and startups.

I think this is an underappreciated topic outside of the specialized press, and economists could have a ball examining what happened to the incentives.

There are ongoing waves of acquisitions of what were small open source software startups. IBM's acquisition of Red Hat is a nested, recursive, big fish little fish, acquisition of many of them.

'but few predicted that what Open Source adoption would do is help the largest companies and wipe out a lot of small companies and startups'

Why do you think there is a GPLv3? Which just happens to be more than a decade old at this point, by the way.

RIP, Tim.

The battle between centralization and decentralization is like a pendulum. In the 90's, the development of private encryption defeated the Clinton's administration to ban it. Thus, the internet system swung towards decentralization. Then, when the tech crash came, NSA and CIA got smart about it and cut deals with certain tech and social media companies to be able to collect information on everyone anyways. That, and the recent tech bubble, the pendulum swung the other way towards centralization. This is where we are now. Crypto=currencies and the underlying technologies, block chains, could shift things the other way again. Certainly there is a lot of motivation on the part of smart people to make this happen given all of the recent censorship of the internet. So, I think things will shift back to what it was like in the 90's for a while. Then governments will find a way to take advantage of this technology to spy on everyone and everything.

I see it as a race that will go on and on without any clear winning on either side.

Peter Theil wrote about this about 10 years ago when he described the "ultimate" battle for liberty being bureaucracy vs. technological innovation. Not just in cyber stuff, but in every sphere of human endeavor.

I believe it was Jefferson who said that the price of liberty was eternal vigilance (of all of the forces seeking to take it away from you).

"Drug dealers and tax evaders" is two thirds of a whole here. Never forget that Crytpoanrachism is necessarily also supporting child pornography; and to support the one is to support the other.

Can't tell if you are being sarcastic, but... that's like saying door locks support child pornography since I would guess that the (truly evil) people who make the videos don't want anyone walking in on them. In fact, cameras, lights, electricity all support it as well, better get rid of those too! I know, let's just get rid of children since keeping them around might be construed as supporting child pornography.

As for the other two-thirds of your whole, well, most libertarians support less taxation and an end to the war on drugs.

IIRC, the four horsemen were drug-dealers, money-launderers, terrorists, and pedophiles. Just keep hammering on these (nowadays, add in Russians and neo-Nazis) until everyone agrees that this whole freedom and privacy thing isn't really worth fighting for.

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