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The Beginnings of Crypto-Anarchy and How That Led to Bitcoin

You are here: Home / Crypto News & Info / The Beginnings of Crypto-Anarchy and How That Led to Bitcoin

October 8, 2020 by Coinsource

Bitcoin and Cryptoanarchy
Part 1 of a 2-part series

If we’re going to get into the nitty-gritty start of crypto-anarchy and cryptocurrency–and we are–let’s begin at the absolute beginning: with the word “anarchy” and its origins.

“Anarchy” was first used in the early 16th century and meant, according to Merriam-Webster: the “‘absence of government,’ albeit with the implication of civil disorder.” The word appeared with a different connotation in the 19th century as a Utopian society without government.

It’s worth noting: Both definitions reference a lack of government, but the earlier version has a negative spin (i.e., a chaotic society without regulations), while the later iteration was positive (i.e., a state where people live freely without a ruling body).

Now, the prefix “crypto” comes from the Greek “kryptos,” meaning “hidden.” Many English words–like “crypt,” “cryptic” and “encrypted”–can trace their origins back to “kryptos.”

So a very basic breakdown of the word “crypto-anarchy” could be: hidden and without governance, which fits the basic concept of crypto-anarchy pretty well.

The word “crypto-anarchy” was first coined in 1988 by early blockchain pioneer and libertarian Tim May in his “Crypto Anarchist Manifesto” where he describes how computer technology allows individuals and groups “to communicate and interact with each other in a totally anonymous manner,” which will “fundamentally alter the nature of corporations and of government interference in economic transactions.”

To put it in plainer terms, crypto-anarchists distrust authority and institutions and subvert these groups with cryptographic software to protect their privacy. In addition, May’s reference to anonymity in economic transactions was likely the first seed of the idea that later bloomed into cryptocurrency.

In 1992, May and two friends, Eric Hughes and John Gilmore, began meeting regularly to discuss the use of cryptography and privacy-enhancing technologies to bring about social and political change. They were dubbed the Cypherpunks, a play on the word “cyberpunks,” a type of science fiction set in a dystopian future. Their riff combines “cyber,” referring to the age of computers, with “cipher,” a disguised way of writing.

In 1993, Hughes wrote “A Cypherpunk’s Manifesto.” (These guys were really into manifestos.) In it, he more clearly outlined the need for “anonymous transaction systems” and declared: “We [the Cypherpunks] are defending our privacy with cryptography, with anonymous mail forwarding systems, with digital signatures, and with electronic money.”

In fact, anonymous electronic money had already been attempted in various forms, often by a steadily growing group of Cypherpunks. None of these lasted.

The most notable early example is likely blinded cash, or ecash, developed in 1990 by David Chaum of Digicash, which went bankrupt in 1998 when users began favoring credit cards and PayPal over ecash. When the company disappeared, so did its electronic money. This made Cypherpunks realize the danger of tying electronic money to a single company. And so, decentralizing future forms of electronic money became paramount.

Stay tuned for our next article that delves into how early electronic money systems led to Bitcoin!

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Category iconCrypto News & Info Tag iconbitcoin,  cryptoanarchy,  encryption

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