61 - Before Bitcoin | Peter Pan

Peter Pan has been a key member of the Ethereum Ecosystem, and in 2018, he wrote a 4-part series titled "Before Bitcoin," which covers the modern history of cryptography. We first bring him onto the podcast for an interview, followed by a reading of the full series by David. ------ 🚀 SUBSCRIBE TO NEWSLETTER: https://newsletter.banklesshq.com/ 🎙️ SUBSCRIBE TO PODCAST: http://podcast.banklesshq.com/ 🎖 CLAIM YOUR BADGE: https://newsletter.banklesshq.com/p/-guide-2-using-the-bankless-badge ------ BANKLESS SPONSOR TOOLS: 💰 GEMINI | FIAT & CRYPTO EXCHANGE https://bankless.cc/go-gemini 🦊 METAMASK | DEFI PASSPORT https://bankless.cc/metamask 🦄 UNISWAP | DECENTRALIZED FUNDING http://bankless.cc/uniswap 🔀 BALANCER | EXCHANGE & POOL ASSETS https://bankless.cc/balancer ------ 📣 DHARMA | From Dollars to DeFi in a Tap! https://bankless.cc/dharma ------ Bankless Podcast #61 - Before Bitcoin Guest: Pet3rPan Pet3rPan is a community-first investor at 1kx and part of the leadership of both MetaCartel Ventures and VentureDAO. His involvement in the crypto space is broad and deep, exemplified by his authoring of the Before Bitcoin series that we dive into in this episode. He was compelled to write the piece as he entered the crypto space, determined to build a depth of knowledge about the history and underlying technology of distributed ledgers powered by public-key cryptography. Modern cryptography doesn't exist in a vacuum, and there is a vast historical landscape to explore and provide context for the underlying principles that power the internet today and drive the innovation of the internet tomorrow. The story of today's cryptocurrency did not begin with Satoshi's Bitcoin whitepaper in 2009. It began decades earlier in the 1970s as cryptography was revolutionized by Cypherpunks, who discovered new mechanisms for the secure transfer of information. They pursued these ends through their shared values of privacy, self-sovereignty, freedom of information, etc. This episode begins with a brief interview with Pet3rPan, followed by a 'David Reads' of all four Before Bitcoin articles. ------ Resources: pet3rpan on Twitter: https://twitter.com/pet3rpan_?s=20 Before Bitcoin Part 1: https://pet3rpan.medium.com/history-of-things-before-bitcoin-cryptocurrency-part-one-e199f02ca380 Before Bitcoin Part 2: https://pet3rpan.medium.com/history-of-things-before-bitcoin-cryptocurrency-part-two-94c4576005 Before Bitcoin Part 3: https://pet3rpan.medium.com/before-bitcoin-pt-3-90s-cryptowars-e857915fab82 Before Bitcoin Part 4: https://pet3rpan.medium.com/before-bitcoin-pt-4-00s-new-millenium-426d6e3dcb1a The Digital Culture Revolution: https://newsletter.banklesshq.com/p/the-digital-culture-revolution ------ This Week on Bankless: 🧢 Weekly Action Recap (4/17): https://newsletter.banklesshq.com/p/price-discovery-mode-weekly-recap 🗞️ Weekly Rollup (4/16): https://shows.banklesshq.com/p/-rollup-btc-and-eth-ath-coin-berlin 🏴 Cryptex & Element (4/13): https://shows.banklesshq.com/p/sotn-42-ethereum-devs-building-defi ⚒️ How to Use dYdX (4/13): https://newsletter.banklesshq.com/p/how-to-trade-on-the-dydx-rollup ----- Not financial or tax advice. This channel is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. This video is not tax advice. Talk to your accountant. Do your own research. Disclosure. From time-to-time I may add links in this newsletter to products I use. I may receive commission if you make a purchase through one of these links. Additionally, the Bankless writers hold crypto assets. See our investment disclosures here: https://newsletter.banklesshq.com/p/bankless-disclosures

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:08Ryan Sean Adams?

  Welcome to Bankless, where we explore the frontier of internet money and internet finance. This is how to get started, how to get better, and how to front run the opportunity. I'm Ryan Sean Adams. I'm joined with David Hoffman, and we're here to help you become more bankless. David, we've got an episode we've never done before. Can you describe what listeners are getting into today?

• 0:33David Hoffman?

  Yeah, I recently put out the article all about crypto culture on the Bankless newsletter. And that was the first article that I ever did a discovery process on. And so I went out to different people who I knew could speak about crypto culture, because the theory is crypto culture is awesome and fantastic, and we all want to export it to the rest of the world. But when I was talking to my friend Amin Soleimani, he forwarded me off to this Before Bitcoin series from Peter Pan. And Peter Pan's been a key member of the Ethereum ecosystem, part of Metar Cartel Ventures. And he has, he back in 2018, wrote these four series about what he calls Before Bitcoin, the history of cryptography.

• 1:14David Hoffman?

  And this is where I think crypto culture really got instantiated in the first place, where the early formation of these early cypherpunks who came together to fight, fight these math-based battles, math versus the world, or math versus the government, and has defined a lot of what this industry has come to be. And I immediately just realized how powerfully awesome these series are, these written series are. And so I wanted to get the, get this information out to the world, to as many people as possible, because the story of Bitcoin and Ethereum and all the things that we're doing today on Ethereum, that story really started in the 70s. It didn't start in 2009, when the Bitcoin was first, the first Bitcoin block was mined.

• 1:59David Hoffman?

  And it didn't start in 2015, when Ethereum was launched. It started in 1970, when some of these early cypherpunks shook hands for the first time and decided to build something together.

• 2:09Ryan Sean Adams?

  Guys, this is really important listening for you today. If you're in the Bankless Program, you know that everything in crypto is an intersection between all of these various fields. We've done episodes on the history of money before, and that's important for you to understand. Equally important is the history of cryptography. That is one of the underpinnings of this entire system. And this episode gives you the history of cryptography, tracking all the way back to the cypherpunk roots, and it gives you insight into the culture that surrounds crypto. So it's absolutely required listening. As far as format goes, guys, we're doing this a bit different. We're doing something we've never done before. Think of this as an audiobook. If you use something like Audible, which I do all the time, you're familiar with the format of audiobooks.

• 2:55Ryan Sean Adams?

  That essentially is what the back half of this podcast episode is. It's a full-fledged mini-audiobook for you. So at first, right after this intro, David and I are going to talk with Peter Pan, who is the author of this audiobook, and get his insights into what we're about to get into. And then this audiobook is divided into four parts. It starts with Part 1, the 1970s, around the public key saga. Part 2, the 1980s, which gets through the origins of decentralization. Then the 1990s and the crypto wars, and leads into 2000s and the birth of cryptocurrency. So David's going to be reading it as if he is reading an audiobook.

• 3:41Ryan Sean Adams?

  The format was fantastic for me to absorb this material, and we think you're going to enjoy it as well. So today, you get a podcast plus an audiobook. I'm really excited about this episode, David.

• 3:53David Hoffman?

  Yeah, it's truly a hidden gem, and I'm super happy that we were able to get what Peter Pan wrote into more ears. It's well-deserved, and I think some of the information here is underappreciated and perhaps just unknown. And so we're going to make this information a little bit more known today.

• 4:12Ryan Sean Adams?

  All right, with that, we want to tell you about the sponsors who made this episode possible. MetaMask is your go-to wallet for the Bankless journey. If you're going Bankless, you need MetaMask, period. Browser and mobile, get them both. This is your tool to unlock the world of DeFi. Here's my favorite part: now you can swap tokens directly in MetaMask with a single swipe. This has got to be the easiest way to trade Ethereum tokens. Choose a token you own, a token to exchange it with, and get your quotes. If you like what you see, you hit swap. That's it. What makes swaps so useful is what happens behind the scenes. It compares DEXs, aggregators, and market makers to find you the best price with the

• 4:55Ryan Sean Adams?

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• 5:18David Hoffman?

  Bankless is proud to be supported by Uniswap. Uniswap is a new paradigm in asset exchange infrastructure. Instead of a cumbersome order book system where trades are matched with other humans, Uniswap is an autonomous piece of software on Ethereum, which is what Ryan and I call a money robot. No human counterparties or centralized intermediaries, just autonomous code on Ethereum. Input the token you want to sell and receive the token you want to buy. Something brand new in the Uniswap ecosystem is the Uniswap Grants program is now accepting applications for grants. We have been saying this for a while, and we'll say it again: DAOs have money and they are in need of labor. If you think that you have something to contribute to the Uniswap DAO, apply for a grant to

• 6:03David Hoffman?

  Uniswap. Just look at the size of the Uniswap treasury. It's almost $3 billion. This mountain of capital is looking for labor. Do you have something of value to contribute to the Uniswap DAO? No matter how big or small your idea is, you can apply for a uni-grant at unigrants.org and help steer Uniswap in the direction that you think it should go. That's exactly what we did to get Uniswap to be a sponsor for Bankless, and you can do the same for your project. Thank you, Uniswap, for sponsoring Bankless.

• 6:33Ryan Sean Adams?

  All right, Bankless Nation. We are here with the author of this fantastic series, Peter Pan. He is a community-first investor at OneKX. He's also an investor and part of the leadership of the Metacartel Ventures Group and also Venture Dow. Peter, how are you doing?

• 6:50Speaker 02

  Doing great. Thanks, Ryan.

• 6:52Ryan Sean Adams?

  Peter, this, this series of articles that you wrote almost reads like an audiobook, and that's, that's kind of how I listened to it. Actually, I listened to it before I actually read the series. David was kind enough to record his voice reading through it, and I just, I just downloaded it into my brain that way. But I was super impressed with the, the depth of, of research, but also kind of the narrative through line that this series of articles put together. Very much read like an audiobook. I was wondering if you could maybe start with, why did you write this piece?

• 7:29Speaker 02

  Good question. I'm, by the way, I'm super honored that you actually picked this up because it was just kind of floating out that, right? You know, for a while. And it was actually one of the first things that really like worked on in the crypto space. So I joined the crypto space about nearly three and a half, nearly four years ago. And yeah, it was just firstly me, you know, going through the usual cycle of like, you know, learning about tokens, you know, reading white papers, being fairly, you know, lost amongst the buzz, right? And I think it was in late 2017 where I started going to local firm meetups where I was like, in the first meetup, I, I ever really went to, that was run by this guy called Bucky Poobah, right? He was, he was like the godfather of the Ethereum,

• 8:14Speaker 02

  Sydney Ethereum developer community. So he told me, you know, like, basic things such as like, what is a network? It's like, you know, what is a blockchain network? What is a firm blockchain network? And, you know, what is EtherScan? What are private keys? And that was like, you know, I think my first one was in September of 2017, and I went down the rabbit hole into learning about the technology. And I was pretty immersed by it. And, and I realized that, you know, Web3 and Ethereum was going to be a very, very special, like, you know, it was going to be a place of special work. Like, it was going to be the work that was being built was important. I didn't really know how or when. Right, but I knew that there's a lot of catch up work to do.

• 8:56Speaker 02

  So I, you know, I quit my role as a designer late that year and just, you know, I kind of time blocked myself like one year to like fully dedicate myself to learning about the firm ecosystem and, you know, to get involved and just to like figure stuff out and find a job in the space, right? And, you know, initially, as I guess, you know, I was a designer doing user, I guess, user research, UX design, non-technical, not, don't have a computing background. So I really started to just like ask questions like, what is the firm network? Really, what is it? Right? Like, you know, this network of, you know, computers running software across the internet, like, what is a computing network? What are computers themselves? What is the internet?

• 9:38Speaker 02

  How does, how do you, I guess, even, you know, transport information across the internet securely, right? I, and I just like slowly started asking these questions all the way until like I started breaking it down to like, you know, I guess go through the different abstraction levels of like, you know, from computers themselves, understanding like how they communicate with each other, network layer to understanding, you know, what is actual cryptography itself, right? To realizing it's just like, you know, it's all number theory in general, right? And discrete mathematics. So try to like really grasp and, you know, gain a brief appreciation of each way of abstraction. And only once I did that, did I realize I could really have a solid sense of where blockchain is like

• 10:24Speaker 02

  really fit in this context of technology itself, right? And one of the things I also did was not only learn about the technology, like, I basically, when I learned about each like piece of technology or each way of abstraction, I also try to understand and learn about, you know, who was the people behind them, right?

• 10:46Speaker 02

  I generally find people much more interesting than just technology itself. And I think when I came to the part about cryptography, I did the standard reading or I went through like, obviously the history of like, you know, encryption in general, right? From the ancient times to like the modern era. And I think, you know, it was actually when I saw the learning about, you know, Asymmetric key cryptography where I realized, you know, just slowly when I went for the history of the people involved, I realized it had really strong linkages to the cypherpunk movement and in cryptocurrency in general. And I realized that, you know, the lineage here is actually much stronger than, you know, people may have like made it out to be.

• 11:28Speaker 02

  And I just like, you know, you know, when I did this research, it was really, you know, unstructured. I just realized I kept rambling to people about it because I was like, I thought this was a really cool story. Right. And I realized I should just start writing about this. And when I started writing about it, it was also a part of my, you know, kind of research process as well of like, you know, digging through the different people involved, right? Like David Chom. You know, the like, I guess, you know, Dithy and like Hellman, people like that.

• 11:59Ryan Sean Adams?

  Yeah. Kudos to you, Peter, for diving deep and going through the the research. You know, when we introduce you and you have this in your Twitter tagline, we introduce you as a community first investor, right? And what you did was basically not only some some kind of technical study in terms of what is cryptography and defining that, but you're almost an anthropologist in this where you sort of track the the cultural lineage of this crypto movement all the way back to where it began sometime in the 1970s. And I love how this series of articles, again, it almost reads like an audio book is laid out where you have the 1970s and you have the 1980s and 90s and all the way up through today.

• 12:43Ryan Sean Adams?

  And how how this movement has fed into the crypto native movement, a movement that Bankless is is one part of as well. So this is fantastic history, but I wondered if you could talk a little bit about the cypherpunks because these are the heroes of the journey throughout these decades. What? What was the value system of the cypherpunks? If we talk about this cultural lineage, what did they care about? What did they believe in?

• 13:15Speaker 02

  Yeah, I would probably call the first cypherpunks. You know, I mean, obviously you had the nineties, right, movement of the cypherpunks, but I really think that it started with. You know, one Hellman, which for Diffy and Ralph Merkel, like they were the people who really came together. To really publish the findings on like on how to solve like, you know, the problem of asymmetric. Encryption decryption, right, right, like I guess one distinction. You know, for those who are listening, they'll probably learn this in articles, but there was symmetrical. Encryption and decryption were like the key, you know, for securing information. Encryption and decryption shared the same key. And because of that, you couldn't really share the key publicly, right?

• 14:00Speaker 02

  At all. So it was very hard to like actually transmit like secret information across unsecure like communication channels. The key, the, the, not the key, but I don't want to say that, but the. The innovation of asymmetric key cryptography was the fact that you could actually decouple the encryption and decryption keys. So you could encrypt something and actually publish the encrypted information and. You wouldn't need to. Someone with the decryption key could then just decrypt that, right? And that encryption information could be published anywhere, right? This was the problem to solve back in the day in the early nineteen seventies and. You know, cryptography research until then was mostly, you know, funded by. The government and the military and because of that cryptography was really kept in a dark.

• 14:45Speaker 02

  It was like no one really understood much about it. It wasn't cool. But it was actually, you know, Martin and. You know, and Whitfield that they really like, there were two individual researchers that. Really set out to solve these problems individually and then they found each other. And they, when they found each other, they started, you know. Are discussing, you know, the research problems and they realized they're working on the same thing, but the key thing was. They, you know, they had this choice of like, you know.

• 15:14Speaker 02

  I guess whether they should be working on this problem or whether they should be working for a logic well much more like corporation to do to do this sort of work. And one reason why they did did do this in the public, right, and publish an open source of work was because they believe that this technology is way too far fought way too powerful for that for to just be, you know, kind of be to be gated by one government to be, you know, kept in the dark, right? And that was like one set of values that drove them to do really like do kind of do all the research. And that really ushered in this like whole new movement around cryptography when they published the paper. But, you know, it was the first ever piece of like really strong, you know, and, you know,

• 15:55Speaker 02

  really strong piece of cryptography that was pushed out into the public and that created like a renaissance around cryptography itself. And this was like one of the themes, you know, throughout the eighties as well of David Chaum's work. He really cared about, he really, he was an advocate for privacy, you know, he was a person who invented the idea around metadata and how like, you know, encryption only encrypted messages, but not the data around the messages, right, like when it was sent and so on. And all of these people in history who actually pushed these innovations on that, you know, did it for because they believed in something something bigger than themselves, really it was, they did it, you know, for set of values that we understand as the cipher book values and which is really around, you know,

• 16:41Speaker 02

  privacy, self sovereignty on the internet, freedom, information's freedom and so on. And I think a lot of, I took, I, I, I guess I took a lot of these learnings and, you know, they became kind of us inspiration to a lot of my parcel work in the space early on, which was like, you know, to do something important.

• 17:02David Hoffman?

  Peter, there's a part of your article where it recapped an email that came out of the Cypherpunk email thread. And that part really stood out to me. And so I want to read a few lines here.

• 17:14David Hoffman?

  Cypher, and this is just from the, the guy that sent out the, the email to everyone else, inviting all the other Cypherpunks to come and join him in a Cypherpunk meeting. In this email, he gave out a couple of things that he believed what defines Cypherpunks. And he said, "Cypherpunks know that cryptographic protocols make social structures. Cypherpunks don't care if you don't like the software they write. Cypherpunks know that software can't be destroyed. Cypherpunks know that a widely dispersed system can't be shut down. Cypherpunks will make the network safe for privacy and Cypherpunks write code." How much of these statements, which were just the statements of one man back in, I believe, the 90s, one Cypherpunk, self-identified Cypherpunk, two other self-identified Cypherpunks?

• 18:00David Hoffman?

  How much of these values and beliefs and definitions of what makes a Cypherpunk, do you think is still held true today by the cultures that surround Bitcoin and Ethereum and open systems? Right? The reason how we ended up talking about your piece is we went on this discovery process to try and figure out what crypto values actually are. And it was Amin Soleimani who focused me back to your work. And so my question here is, how has Cypherpunk values become extrapolated to the communities and cultures around Bitcoin and Ethereum?

• 18:35Speaker 02

  It's a really good question.

• 18:38Speaker 02

  I think one thing about the settlements that they understood was that cryptography was this like tool that could protect the world that they created themselves on the internet, right? It gave them protection from others who created this shared environment. I think for adapted to Web3, it's all about, you know, Web3, we have these tools, known as smart contracts that which we can use to create entire new worlds, entire new economies to participate in. And I think, yeah, I do think that, you know, it's the Cypherpunks had this, you know, the police like self-identified anarchists in this sense. I think the difference here within Ethereum or Web3 in general is that we generally see like

• 19:24Speaker 02

  This not so much as a tool to, you know, purely just protect, but also to create and build and coordinate. I think this is the key thing. I, I, I do think like, I think James Young said something a long time ago that resonated well. It was like, you know, the whole goal of Ethereum was to create the DAO, right? Like the, the DAO was actually the idea all along. And, you know, today we have really like, we've realized that somewhat like decent version of the original vision, right? Of like this decentralized, you know, economy that really self runs. But maybe instead of machines running it, we realize that you really do need these like human driven, human people for us to actually operate the, these different economies that, right?

• 20:05Speaker 02

  That run today. So I think instead of, you know, purely as a means of like protection, defending, uh, you know, I, I do see like, you know, uh, Web3 as like, that's as a means of like coordination, right? I think that's a key theme.

• 20:21Ryan Sean Adams?

  So not anarchy, but coordination instead is part of crypto's legacy now.

• 20:29Speaker 02

  Yeah, I would think so.

• 20:34David Hoffman?

  Where do you want to go next, Ron?

• 20:36Ryan Sean Adams?

  Um, I'll jump to this. Okay. Peter, I, I, one thing as I was, I was listening to this that kept, uh, standing out to me was throughout the decades, this dance between the, the cypherpunks and the government, right? Um, this interplay that, that kind of, uh, is left with us now. Crypto, crypto folks often talk about the, the final boss being sort of, you know, the, the government popping up and, and trying to ban crypto, ban Ethereum, ban Bitcoin, right? Um, so far that hasn't happened, but that legacy has, has kind of persisted. And throughout the seventies and the eighties and the nineties and into the two thousands, there was always this dance between the

• 21:20Ryan Sean Adams?

  power of cryptography, uh, in the hands of the people and governments who weren't sure whether they wanted this power to be propagated. It was super interesting for me to realize how much cryptography as a technology was treated as a weapon. It was on the munitions list, like banned munitions list, the same list that, you know, missiles and, and nuclear weapons are on, right? Can you talk about this interplay between crypto and governments? And what it kind of means for us today as we explore this new horizon in the world of crypto?

• 22:03Speaker 02

  Yeah, no cryptography is definitely dangerous in itself, especially when, you know, it was close sourced. And, you know, it was on the munitions list, mostly from World War I, really. Like, you know, that's what started. So I wouldn't say exactly that they didn't want it to be, you know, in the hands of people. I think it was just deeply, deeply misunderstood. And it was just, you know, it was by default, you know, on the munitions list. Because, you know, every government in the world, right? Really competing on these like technology arms races, right? So it was a matter of like national security. But I think as like, you know, computerization really hit the US in the early 60s.

• 22:45Speaker 02

  And then, you know, everyone had computers and technology was really, you know, more abundant. You know, obviously with open source, I don't even see open source as a movement. But rather as, you know, purely just like this natural process of like, of like information freeing itself, right? For technology. As this progress really progressed, I think like this idea that information was this sort of technology information was harmful for national security was maybe it had, you know, some merit, but it was like futile in the end, right? And, you know, initially, I think in the 90s, it's just the government didn't really understand computers or internet or cryptography or information rights at all.

• 23:27Speaker 02

  They just like, you know, they went into computer laboratories, raided, you know, companies and just like went for the emails. They even sent emails themselves, right? Through the same computers, like they didn't really understand any of this. And a lot of the, you know, initial decisions through the government were pretty misplaced. And, you know, ignorant to a lot of extent, I would, you know, to, I would, the comparison would be like, imagine today, you know, the US government would say that, you know, putting like, you know, this like vaccination data on the EOS blockchain. You'd imagine the outcry, you know, like of that today, that it would be the equivalent of that, you know, maybe in the mid 90s. It was just a lot of ignorance.

• 24:10Speaker 02

  Misinformation, but it took them like, you know, maybe a decade from early nineties to late nineties. So that's really breakthrough. And what happened was just that more and more people were educated and slowly. Uh, parts of that educated group, you know, uh, increasingly, uh, I guess, you know, um. Were more like people who worked in government, right? It's like always slow in in terms of like this education and. Uh, you know, education of of the government itself, because it's just this giant system, right? And I think it's a matter of time in general. I I mean, even today, you have like regulators here and there, you know, really a- addressing define in general. Um, and this process generally like goes on very, very slowly until, you know, you hit, you know, kind of.

• 24:56Speaker 02

  You hit this barrier between, um, you kind of like, there's always moments in in history where like really strong technologies like. You know, a cryptography or even perhaps, you know, soon like DeFi. Really hit the boundaries of uh and and comprehension of like what a of a government's mental model. Uh, of how they regulate and enforce. And usually this often needs to be settled in the court of law, right? Where like all the facts are laid out, where a lot of the educational. Uh, pro, you know, uh, education uh happens uh for like regulators in government. And it's a painful, painful process, but for cryptography itself, right? It took free law, uh, law, like, I guess, free. Um, court cases uh from the nineteen ninety five to ninety seven for that to like really break through and how it happened was just like.

• 25:40Speaker 02

  You know, the first case, I think, was like this teacher who wanted to teach cryptography. Uh, you know, to the students and they had one international student in the classroom. Right? Uh, and he was handing out CD-ROMs, right, of cryptography, right? Like, you know, I think it was something like. Uh, key exchange, you know, protocol. And technically, he, you know, he got a letter from the government saying you must cease and desist because, you know, you're technically giving foreign nationals. You know, uh, like heavily regulated crypt- cryptographic information and technology. And this was like. As an educator, he was like pretty pissed off. He was like, why, why can't I educate all my students? So, you know, and and generally like. From this teacher's case against the government, you know,

• 26:23Speaker 02

  to a few other cases, the natural progression of an understanding cryptography went from like, the first case was made of like cryptography is free speech, you know, you know, at least like cryptography is just math, right? So math is like free speech, you can't, you know, you can't ban this. So you can't, you know, it was against the First Amendment to really like ban any sort of information, right? So they, you know, mocked the US governments and, you know, like decision like by printing out like cryptographic protocols as books, right? You can't, you know, ban books. And slowly this, this kind of grew like step by step into cryptography is software is free speech, right? You cannot ban software and slowly that, you know, as it was just like a lot more education, the government really relented and finally removed it

• 27:08Speaker 02

  as a restricted, you know, munition, right?

• 27:13Ryan Sean Adams?

  I, I do agree that there is a lot of education that had to be done. And, and yet also there, there does seem to be some sort of conflict with those in government at least, or those in powerful places who might be a bit more authoritarian, a bit more totalitarian. There was this move by the government to put in Clipper Chips, for example, which is essentially like a backdoor that you talked about to, to, to modern encryption. Of course, this didn't work out because it was easily, easily cracked. But, but all of this makes me wonder about the, this idea of a, you know, we talk about in the US and the, in the constitution, there are rights protected by,

• 27:58Ryan Sean Adams?

  you know, the amendments and, and the Bill of Rights, of course. What would a digital Bill of Rights look like for society? Surely would, it would include something like the right to encryption for individual citizens if we were to create something like that. So the, there does seem, at least in, in free societies, to be sort of a, an education process whereby like, once governments understand the benefits to individuals of this technology, they get on board because, you know, freedom of speech is a protected right. Although. Encryption itself is kind of anti authoritarian societies or anti governments

• 28:40Ryan Sean Adams?

  that would seek or powerful individuals who would seek to oppress the people. So there's also this kind of, kind of conflict. Do you see a little bit of that in the legacy the cypherpunks left us?

• 28:52Speaker 02

  Yeah, for sure. I mean, cryptography was math and you can't stop math, right? You know, it's no like, like human written law could ever stop that. Right? So it was almost like, you know, the governments tried to ban a few stupid things in the past as well. Like, you know, banning alcohol probation, probation, like that was never going to work. Even like, you know, um, the war on drugs, right? I'll give this like, you know, um, like kind of issues there. And I guess, you know, yeah, I don't understand the government very well in general. I don't think too many people do.

• 29:30Speaker 02

  But yeah, I do think that there's definitely the sense that, you know, what sort of like, I mean, that's, I guess the US government, let's be specific here in general, they have an interest for the, to protect the US dollar, right? To be the economic system, uh, the reserve currency of the world. They have a direct incentive to protect that. So yeah, I do actually see like potentially this sort of like, uh, a real conflict of interest here and sort of regulating, you know, um, for your open like economic systems and like also wanting to actually protect their own, right? Not saying it's a bad thing, uh, you know, necessarily the US dollar being a reserve currency,

• 30:13Speaker 02

  but it's been protected, you know, uh, for many means, you know, uh, yeah, for war, for many other things. And I don't, I definitely, you know, could see a pathway gets ugly, right? But I also could see, um, yeah, like some sort of nuance, but I, but before we finally get to some sort of resolution, there's definitely gonna be like a period of time where the worlds do clash. And that's gonna need to be resolved one way or another. Yeah.

• 30:45David Hoffman?

  Peter, we're about to send Bankless listeners into over an hour and a half of me reading your series. And so as people gear up for that and get ready for that, what would you hope would be the takeaways for people who are going through each one of these parts? There's four parts and they're all combined together. What should listeners really be pondering or thinking about while they are hearing this? And what do you hope that they take away when they are finished?

• 31:13Speaker 02

  I would say think about why you're in the space and, you know, how you want to contribute to it. You know, one way, you know, this, the sort of like person writing this series really affected me was it made me really think hard about, you know, what I was going to leave behind in many senses, right? You know, and it made, it pushed me to do work that I felt like, I guess,

• 31:43Speaker 02

  that everyone else did and that I wrote about, right? Like, you know, I kind of like stopped thinking. I think I had this mental model before I wrote about the series. It's just like, you know, to do big things, you have to like go change the world and things like that. But I realized, you know, it just, the innovation really happens in a huge wave. And, you know, from outside, it seems like this, you know, heroic kind of quest to change things. But in reality, it's just a lot of really, you know, smart driven people pushing things one step at a time. And, you know, to do something important, all you need to do is just help progress a space one step at a time yourself, right? So like figure out what step that is you can actually contribute to.

• 32:27David Hoffman?

  Well, Peter, once again, thank you for writing this piece. And as soon as I stumbled upon it, so I'm gonna, well, once again, Peter, thank you for writing this piece. And as soon as I stumbled upon it, I actually started just hitting record before I had even read it, because I knew that it was going to be something that I wanted to get out to as many people as possible. And so again, thank you for writing it in the original.

• 32:56David Hoffman?

  Here we go. And so, thank you for originally writing it and putting it together to make sure that this information can actually get out the door. What would you say, Peter, before listeners get into it, what would you say is the legacy of the Cyberpunk's and is that legacy still alive today?

• 33:13Speaker 02

  Absolutely, exists everywhere and the hashes that, you know, you know, we create today, you know, for our transactions, you know, it's everywhere. So, for the organizations we call DAOs today, right, you know, these were imagined long, long, long time before. And yeah, we're the ones who are now executing upon those like ideas.

• 33:35David Hoffman?

  All right, Bankless Nation, let's go into exactly what those ideas are and where they got formed. And so, we bring you "Before Bitcoin" by Peter Pan. But first, we have to talk about some of these fantastic sponsors that make this show possible.

• 33:50David Hoffman?

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• 34:33David Hoffman?

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• 35:08David Hoffman?

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• 35:52David Hoffman?

  is the Gemini Crypto Back Credit Card, which gives you 3% cash back on all of your purchases, but paid to you in your preferred crypto asset. When I get my Gemini credit card, I'm going to make sure that I get my cash back in ETH. So whenever I buy something, I get a little bit of ETH bonus back to me at the same time. You can open up a free account in under 3 minutes at Gemini.com/go-bankless. And if you trade more than $100 within the first 30 days after signup, you'll be gifted a free $15 Bitcoin bonus. Check them out at Gemini.com/go-bankless.

• 36:29David Hoffman?

  Before Bitcoin, Part 1: The 70s, the Public Key Saga. If you ask people, "Where does Bitcoin or cryptocurrency come from?", you'll get many different answers. And if they are right, they will likely be vague jabs at the truth. What many people do not know is that Bitcoin was a creation born out of the Cypherpunk movement. Originated during the 70s, but formed in the 90s, it fought the US government's injustices surrounding digital freedom and pioneered modern rights to personal privacy. While you can try to understand the Cypherpunks through a Google search, you may struggle to deeply understand the full picture unless you understand the context of the movement itself. You have to zoom out and think bigger. Who seeded the movement of the Cypherpunks? Where did all the ideas come from?

• 37:12David Hoffman?

  Before Bitcoin is a series which aims to give you a historical perspective of cryptocurrency's technology and philosophy. To do this, I'll be writing a four or five-part series focusing on cryptography, the underlying mechanisms of all cryptocurrencies, along with the philosophies of privacy formed over time. This will be an exploration through the 70s, 80s, 90s, and 2000s, where in each decade, an overview of the series is focused on these points. Part 1, the 70s. How cryptographic knowledge was democratized through the publication of public key cryptography. Part 2, the 80s. The origins of decentralized services, anonymous communication networks, and digital cash. Part 3, the 90s. The origins of the cypherpunks.

• 37:54David Hoffman?

  And Part 4, the 2000s. Technologies born out of the cypherpunk movement during the 2000s. And Part 5 Bitcoin. The original designs of Bitcoin and early coin forks. This series will be a long read. It won't be your typical 300-word pamphlet disguised as a Medium article written as a marketer, or the usual short punchy stuff you find. To understand anything, historical context is important, and the time in doing so is an investment. This aims to provide just that. Introduction. So, we want to understand cryptocurrency and its history. Where do we start? I want to kick things off by first talking about the 70s and the creation of public key cryptography. While you might groan at a dusty, black-and-white image of the 70s,

• 38:38David Hoffman?

  just like I did when I first researched cryptography, I didn't realize how important this decade was. Until the 70s, cryptography was mostly used by the military to secure communications. Research was mostly conducted by intelligence agencies, GCHQ, NSA, or licensed research labs operating by enterprises such as IBM. Cryptography was used for commercial purposes, and the public had little access to the knowledge. The hold on modern-day cryptography would have been broken by the publication of public cryptography, released by three cryptographers known as Hellman, Diffie, and Merkel. Their work would result in the first big public wave of interest into cryptography.

• 39:19David Hoffman?

  So what is public key cryptography? Cryptography is the practice of securing and protecting information against enemies, or people who have no right to the information. It is the underlying mechanism that secures the authenticity and integrity of information, and ultimately what makes blockchains and cryptocurrency possible. Public key cryptography is a shift in the use of cryptography that now secures most cryptocurrency protocols. How does it work? Essentially, public key cryptography allows people to send encrypted information to a public address over unsecured channels. And only people with access to the public address's corresponding private key can decrypt the information. The private key is also used to sign off and authenticate information sent away to

• 40:03David Hoffman?

  verify the legitimacy of its origin. In a case of cryptocurrency, while people can send Bitcoins to a public address and see how many Bitcoins it holds, only the owner with its corresponding private key can use the Bitcoins and sign off on transactions. This was extremely important concept for cryptography and would lead to the first big interest in cryptography. Three cryptographers, known as Martin Hellman, Whitefield Diffie, and Ralph Merkel, would be behind, and they would have a very interesting story. So how did these researchers defeat the government's control on strong cryptographic knowledge? Firstly, followed the story of a cryptographer known as Martin Hellman, a young ambitious man. Hellman grew up as a nerd where he was exposed to science at an early age by his father, a physics teacher at a local high school.

• 40:48David Hoffman?

  He remembers that, quote, "My father had books on the bookshelf that I would pull down and read about things, including one I remember, Gahan's Physics, an old physics text from the 1890s that he bought. Obviously, it was an antique even for him, and my seventh grade science fair projects came out of that. So I was interested in science, but not particularly cryptography, and I loved math too," end quote. Early career. Following his interests, he studied electrical engineering from New York University and completed his master's degree in electrical engineering at Stanford University in 1967. Fairly well-suited to academia, he did well and enjoyed his time at school. While it might be intuitive to assume that he studied cryptography at some point, he never much associated with the side of computer science until later on.

• 41:31David Hoffman?

  Instead, early on, he was very career-driven, having already planned his life at an early age. He envisioned that he would be married at the age of 35, and until then, he would be traveling the world, working in management for big businesses. At the age of 22, he set out to complete a PhD in some esoteric way of... Thinking called decision logic. Hellman saw a doctorate as an opportunity to counter his youth in management based on the logic of, quote, "If I had this, the PhD, it would be a way to help quell the questions like, what can this kid do?" Ironically, in his first year of his PhD, he had gotten married. That did not slow him down, and within two years of starting his PhD, at the age of 24, he achieved an early breakthrough. He released his dissertation, "Learning with Finite Memory."

• 42:13David Hoffman?

  Hanging on with his grand life plan, he followed his dreams to go work for IBM. For a brief moment, he was juggling the decision to either teach or work in enterprise, but guided by the allure of traveling the world and a lot more money. He decided, quote, "No thanks, I don't want to be poor." Early influences of Harry Feistl and Peter Elias. So he went off to work for IBM at the Thomas J. Watson Research Center in New York. Hellman worked in the Pattern Recognition Department, building machines that tried to recognize numbers from photographs. While Hellman's work was nothing to do with cryptography, IBM and its own division focused on cryptographic research. From that division, he met a German researcher called Horst Feistl. Through their friendship, Feistl introduced Hellman into cryptography.

• 42:55David Hoffman?

  They often had lunch discussing cryptographic systems and seemingly unsolvable problems. Hellman regards Feistl as one of the biggest early influences, and would go on to later design the government's data encryption standard, DES. As he mentally matured, and also well when his wife was pregnant, he asked himself, "Do I really want to be traveling the world, or do I want to have more time with my family?" It was the timeless dilemma that we had to face throughout history, wife and child versus money. Choosing family, he became an assistant professor at MIT's Department of Electronic Engineering. This was where he met Peter Elias, MIT's head of the electronic engineering, who collaborated on research with Cloud Shannon, the father of information theory.

• 43:39David Hoffman?

  If that means nothing to you, he essentially invented the modern-day cryptography that was used in World War II. After meeting, Peter gave Hellman a copy of Shannon's landmark paper, "A Mathematical Theory of Communication." This was, that paper is from 1948. This was another major influence of Hellman that shaped his mathematical understanding of cryptography. He became good friends with Elias, which over time deepened his fascinations and knowledge of cryptography. Hellman regarded Elias as being another pivotal part of his education into cryptographic philosophy. Pursuing Research. In 1971, Hellman returned to Stanford, this time as an assistant professor. While he continued to work on decision-making research, by the end of 1971, he had started to prefer, pursue cryptographic research.

• 44:23David Hoffman?

  His colleagues and friends at Stanford did not support his decision to do so. "They told me I was crazy," Hellman said. "The funny thing is, was, he didn't exactly disagree with their sentiment." A quote from Hellman. "How could I hope to discover anything that the National Security Agency, which is the primary American code-making, code-breaking agency, didn't already know? And they had classified everything so highly that if we came up with anything good, they'd classify it." But driven by his intellectual fascination and previous experience with the influences at IBM and MIT, he believed that cryptography would be of commercial importance in the future. He gave his first talk and released his first technical report on cryptography in 1973. Hellman, Hellman's work soon spread and did not go unnoticed.

• 45:06David Hoffman?

  In 1973, a researcher called Whitefield Diffie reached out to him. Whitefield Diffie, a very bored young man. In contrast to Hellman, Diffie was first introduced to cryptography early at the age of 10 years old, when his father, a history professor, brought home cryptography books from a local library. He loved mathematics but hated school. Diffie was never described to have performed competently and how he never applied himself to the degree his father hoped. Diffie barely graduated. Despite his performance, he was smart enough to ace the entrance exams for MIT. Studying mathematics there, he remembers how he tried to teach himself how to program, but thought of it as very low-class work. Overall, he was pretty bored and instead spent most of his time studying pure mathematics,

• 45:48David Hoffman?

  skipping day jobs to, to work on AI and the code breakers. Just when he graduated, the US government started to draft young men to fight in Vietnam. Machine guns and screaming Vietcong did not particularly interest Diffie, so instead he took a job developing software and doing other, quote, "low-class work." At the same time, he also started to work part-time at MIT's Project MAC's Artificial Intelligence Laboratory, run by two pretty smart people, Martin Meniski and John McCarthy. Diffie had a very strong relationship with McCarthy and learned a lot from him. Unknown to Diffie and many at that time, McCarthy would go on to later be regarded as the "father of artificial intelligence," coining the term AI. Often quoted, McCarthy believed that "every aspect of learning or any other feature of

• 46:31David Hoffman?

  intelligence can, in principle, be so precisely described that a machine can be made to simulate it."

• 46:39David Hoffman?

  He was incredibly focused on the future, believing that the conception of such intelligence will come in five to 500 years. Under his guidance, Diffie was exposed to his computing philosophy and developed a deep understanding of networking, electronic keys, and authentication. Diffie later followed McCarthy to Stanford to join his new AI lab. During his time at Stanford, Diffie read David Kahn's book, The Codebreakers: The Story of Secret Writing. It summarized the history of cryptography from ancient Egypt to the time of its writing, and was described to have profoundly influenced him and his beliefs surrounding privacy. Compelled to pursue his own personal researches of cryptography, he left Sale, and Sale was

• 47:21David Hoffman?

  the organization, the AI lab in Stanford that I mentioned earlier, he left Sale in 1973, spending the next year jumping around the country to meet and discuss cryptography with different experts. Quote, "I was doing one of the things I am good at, which is digging up rare manuscripts in libraries, driving around, visiting friends at universities." And in 1974, as part of his research, he visited IBM Thomas J. Watson Laboratory at Yorktown Heights to meet with a cryptography research team. At the time, it was led by Horst Feissl, the guy who introduced cryptography to Hellman. When Diffie visited, he couldn't learn as much of the work as was classified by the NSA. Instead, he was referred to Martin Hellman, a professor at Stanford University who was

• 48:05David Hoffman?

  working on similar cryptography. Hellman meets Diffie. "In the fall of 1974, wit shows up on my doorstep. I'll never forget that day." Hellman in 2011. Through a referral, Hellman agreed to meet Diffie at his house in 1974. Diffie came in the afternoon but stayed for dinner and left at 11:00 PM. The short meeting expanded over hours of discussion. Hellman recounted how working in a vacuum had been taxing in a way, and finding a kindred spirit was really something. Soon after, Diffie took a job at a local research group, and like his first job, he would soon spend more time working with Hellman on cryptography than his actual job. Early in 1975, they had something else to worry about: the DES. Data Encryption Standard, DES.

• 48:50David Hoffman?

  Early in 1975, the government published the DES. It was the first encryption cipher that was approved for public and commercial use. The NSA published the adoption of the DES by financial services and other commercial sectors where strong encryption was needed: SIM cards, network devices, routers and modems. Previous to the DES, the First Amendment classified cryptography along with munitions and other items that were in military in character. You had to be licensed to handle any form of cryptography and all work related to it was classified by the NSA. This was the first publicly approved use of such technology. How the DES was designed. The Need for a National Encryption Cipher was released after a study conducted in 1972

• 49:33David Hoffman?

  by the National Bureau of Standards, now known as NIST, the National Institute of Standards and Technology, basically a shell of the NSA. They requested design proposals from research centers around the US in 1973 and 74. After running up dry the first time in 1974, IBM conceived of a cipher called Lucifer. Lucifer's design was led by IBM's very own Horace Feistl. This cipher was an improvement on previously developed cipher but fit the design request from the NSA. Lucifer underwent an extra stage of collaboration with the NSA where they wanted to reduce the key size from 64 bits to 48 bits. On a basic level, it means needing less processing power to encrypt and decrypt.

• 50:17David Hoffman?

  Their final decision to reduce the key size to 56 bits would later come back to bite them. Hellman and Diffie's criticisms. Hellman and Diffie initially embraced the DES with open arms as they saw it as a huge step forward bringing cryptography into the public view. But as they looked closer, they foresaw how the shortened key length was vulnerable to brute force attacks. But more importantly, amongst the research circles, the IBM team accused the NSA of tampering with the cipher. After the cipher was sent to Washington for approval, it was returned with an altered S-box, the part of a cipher that returns plaintext into ciphertext. During the 70s, there was a general sense of distrust about the government. This wariness stemmed from a period

• 50:58David Hoffman?

  After World War II, learning from the control of totalitarian governments, the USSR, Nazi Germany, the public was vigilant against the intrusion by the government. The public fears were reflected in Orwell's 1984 and other popular texts that explored government surveillance, control of society, and personal freedom. This sentiment continued into the 60s, where the decades was rocked by the assassination of JFK, the Cuban Missile Crisis, and the socio-political movements such as the Black Rights and Gay Rights Movements. In the 1970s, this was exacerbated by the Watergate Incident in 1972, which was a controversy surrounding President Nixon's authorized bugging of the Democratic National Committee Headquarters in Washington DC.

• 51:41David Hoffman?

  To the public, their fears were slowly but surely manifesting before their eyes. People believed that the NSA had built a cipher which they could bypass themselves. Merkel, the kid who knew nothing. Soon after the release of the DES, Hellman and Diffie released a technical paper called "Multi-User Cryptographic Techniques", and they soon learnt of Ralph Merkel, a young 23-year-old computer science student from Berkeley. Hellman was 30 years old at the time, and Diffie was only one year younger, uh, older, excuse me. Merkel's Puzzles. Before meeting Hellman and Diffie, Merkel had already been working on his early concept of public key encryption, which would later be known as Merkel's Puzzles. He started working on his ideas during his computer science course, CS244, where he

• 52:23David Hoffman?

  stumbled across the riddle, "How do you reestablish secure communications when a hostile enemy already knows everything?" He needed to complete a personal project for the course, and this seemed perfect for him to develop his ideas. "When I thought about how you can possibly establish security when everything is known to the eavesdropper, and the eavesdropper can listen in on communications, how can you possibly establish security? So my first thought was, it doesn't look like you can, so I'll try and prove that it's impossible. So I tried to prove that you couldn't establish security, and I tried and tried and tried, and I failed miserably. Then I thought about it some more, and I said, 'Well, if I can't prove that you can't do it, I'll turn around and try and figure out a method to do it.'" And when I tried to come up with a method for doing it, having just tried to prove you can't do it,

• 53:06David Hoffman?

  I knew there were cracks in my proof, so to speak, and I knew where I could try and slide through. So I worked on those places and low and behold, it turns out it was possible. I could use the cracks in my proof to come up with a method for actually doing it. And when I figured out how to do it, there was this, well, the traditional aha moment where I said, quote, "Oh yeah, that works. I can do it." That happened very rapidly and it was, it was all one night of staying up late and thinking and then realizing, "Oh my gosh, I can do this thing." It seems very counterintuitive, but I can actually figure out a key. I can establish a cryptographic key over an open communications line, even if the enemy, the interlooper, the eavesdropper, knows everything. With no theoretical or historical knowledge about cryptography,

• 53:51David Hoffman?

  he was unaware of how the problem was considered to be unsolvable. He put everything into a paper and shared it around. The head teacher of the security course couldn't understand his work and told Merkel to bug her off. And when he submitted his work to the CACM, a well-respected computer science journal, he was rejected. But this time, not because it was nonsense, but because the editor thought his contents of his work were, quote, "Not in the mainstream of present cryptography thinking." However, he also shared it with a computer scientist called Peter Blatman, who immediately noticed the value of his work. Unbeknown to Merkel, Blatman was friends with Diffie, who invited him out to a cryptography meetup in Stanford. During a car ride, it might be Blatman. Blatman briefly outlined the problem Merkel was working on.

• 54:36David Hoffman?

  Apparently Diffie had been obsessing over the problem for years. And upon hearing about how some young computer science student had potentially solved the problem, he dismissed such a possibility erupting into an outburst. But once Diffie was calm again, he became excited about the possibility of such a solution. Helman and Diffie had recently submitted a paper which explored the applications of public key encryption under the assumption that it was possible. Diffie gave Blatman a copy to give to Merkel. Quote, "There are these guys at Stanford who talk just like you." After reading their work, Merkel sent over his paper. When the other two had read it, they completely shifted their way of thinking. Despite Merkel's youth and complete lack of cryptographic knowledge, his creativity had solved the public key distribution problem.

• 55:18David Hoffman?

  This young 23-year-old managed to achieve what academics had strived to do for years. But Hellman and Diffie found his solution inefficient. With their cryptographic understanding, they had found a far more compact solution to the key distribution problem and came up with a new iteration of public key cryptography. Soon their concepts would be formulated into a paper that would be known as New Directions in Cryptography. Following their collaboration, Merkel left for Stanford, taking up Hellman's invitation to work under him as a PhD student. New Directions in Cryptography. In November 1976, the paper New Directions in Cryptography was released. It discussed fundamental problems of cryptography, public key cryptography, and protocols that facilitated authenticated communication. Merkel was credited for his independent work,

• 55:59David Hoffman?

  but in the end, the communication protocol was named the Diffie-Hellman Key Exchange. However, despite this, in 1977, when public key encryption was patented, Merkel was credited as one of the three inventors. Diffie reflected on Merkel as a, possibly the most inventive character in the public key saga. The system had since been known as the Diffie-Hellman Key Exchange. While the system was first described in a paper by Diffie and me, it is a public key distribution system, a concept developed by Merkel, and hence should be called the Diffie-Hellman-Merkel Key Exchange, if the names are to be associated with it. I hope this small pulpit might help in that endeavor to recognize Merkel's equal contribution in the invention of public key cryptography. Martin Hellman, 2002.

• 56:43David Hoffman?

  The concepts discussed in the paper are used to design and secure blockchains we use today. One of their purposes of the paper noted at the end was to, quote, "inspire others to work in this fascinating area in which participation has been discouraged in the recent past by a nearly total government monopoly." So quote from the paper, New Directions in Cryptography. For the time, the public had access to powerful encryption technology. Their work broke the control on cryptographic knowledge. Fueled by the growing distrust of the government's DES cipher, the technology in the paper enabled the first big wave of public interest in cryptography and encryption. It was later revealed by that Hellman, Diffie, and Merkel were not the first conceivers of public key cryptography.

• 57:26David Hoffman?

  A form of it was initially created and applied to an algorithm by researchers from Great Britain's intelligence agency, GCHQ, and while the NSA had access to this, it was all classified and remained in the dark untouched. Now imagine if these three never published public key encryption. Our world potentially might be very different. Hellman, Diffie, and Merkel's publication managed to incite a new wave of innovation that would last for decades, whereas governmental agencies kept their findings behind closed doors. This contrast very much highlights the importance of open collaborative work within cryptography, but also other sciences. Fittingly, in the line of the first paper, it had begun with, "We stand today on the brink of a revolution in cryptography."

• 58:09David Hoffman?

  While Hellman and Diffie continued to work on cryptography, Merkel was the one that continued to excel. Spending the rest of the 70s as a student of Hellman and Diffie, Merkel continued to impact cryptography in the 80s, later going on to invent cryptographic hashing. Closing statement for this part of the series. These three cryptographers would break down the barriers for cryptography. A cryptographer known in the 80s, known as David Chalm, would go on to directly build upon their work and conceptualize the need for autonomous communications, payments, and ultimately the need for decentralized services. Chalm's work, however, would only be made possible through the dedication of Hellman, Diffie, and Merkel. Continuing on from the 70s.

• 58:50David Hoffman?

  The story of decentralization picks up right after the publication of Public Key Cryptography, beginning with a computer science student called David Chalm. Like Ralph Merkel, he was also from the University of California, Berkeley. As a graduate student, he recently learned about cryptography in the late 70s through the paper "New Directions in Cryptography", 1976. This was Martin Hellman's, Whitfield Diffie's, and Ralph Merkel's publication on Public key cryptography. Chom was not alone in his discovery of cryptography. At that time, the San Francisco Bay area was becoming the world's leader in technology through the local presence of Apple, Intel, and Hewlett-Packard. The money and excitement attracted international tech talent. When the paper New Directions in Cryptography was released,

• 59:31David Hoffman?

  interest in cryptography spread like wildfire amongst scientists, academics, researchers, and engineers. After about a decade of dishing it out between Microsoft and Apple, the 70s' personal computing boom was tapering off. Star Wars IV had just come out in 1977, and the concept of the Internet had started to turn heads worldwide. The world was moving towards a digital future, and the tech wasn't the only thing reflecting it. It was a newly-found sense of fascination and romanticism revolving around computers, robotics, and technology. Apple's record-breaking IPO of 1.3 billion would later pour fuel into the impending software boom and set Silicon Alley for success for the next 30 years. Being part of the first new wave of interest into cryptography,

• 1:00:14David Hoffman?

  Chom naturally looked into it through his natural aptitude for breaking things. While having little about his early life and personal details online, he shared hints of where his natural curiosity for technology had come from. While others were playing in the sun, Chom recounts how he spent most of his childhood breaking locks and playing with safes. He was from a wealthy family and had access to a computer early on. And like many modern-day teenagers, he spent his adolescent years staring at a computer screen. But instead of YouTube and Facebook, he spent time trying to break computer systems and cracking passwords. Being part of the first generation that grew up using computers, technology was natural to him. But so was his hacker paranoia. Having broke and exploited seemingly secure systems,

• 1:00:57David Hoffman?

  Chom had likely developed a sense of cynicism about most technologies. Having that instinct as he studied cryptography, he saw an aspect that was of cryptography that was overlooked: metadata, the traffic analysis problem. While public key encryption conceptually solved the problem of encrypted messages, Chom thought it was only one piece of the puzzle. He knew that encryption did not necessarily mean "secure." He saw the unprotected data around protected messages of who converses with who. Who and when they converse as a risk to personal privacy. With this information, he knew that people could theoretically be identified and tracked. Completing his graduate studies at the time, he decided to write his research paper on the traffic analysis problem. How do you keep secret the knowledge of who converses with who and when they converse?

• 1:01:41David Hoffman?

  He graduated in 1979, releasing his first major cryptography paper, Untraceable Electronic Mail Return Addresses and Digital Signatures. While initially released in 1979, it was only later published in 1981. Citing the Hellman, Diffian, and Merkel's work of new directions in cryptography, in the paper, Chom outlines the risk of personal privacy and provides the blueprint of an anonymous mailing protocol using something known as a mixed network. His protocol protected the identity of the messengers as well as the time of the message being sent. How do mixed networks work? A mixed network is a network made up of nodes that use public key cryptography to authenticate messages. These nodes send information to each other to mix up the original sender's identity and timing of messages.

• 1:02:25David Hoffman?

  The message addresses was important as it could be used to identify the origins of the message. The timing of the message could also be used to identify the messages that would correspondingly move within a network. With a mixed network, when you send a message to someone, the encrypted message would first be passed to a node where it would be batched with other messages from other senders. This batch would then be sent between different nodes. Think of a pinball full of messages bouncing around different nodes. In the end, the message would exit out of the network and end up at the intended address with the original sender hidden. For replies to the message, it would be sent back to the original address that would be unknown to the sender. Thus, the identity of senders and order of messages would stay unknown and prevent the ability to trace and spy on messages. While designing the network,

• 1:03:09David Hoffman?

  he dismissed a solution that used a single message authenticator, believing that would be easily compromised. Instead, he insisted that ideally, each participant is an authority. The mixed network protocol would be used to build Tor, the anonymous browser that you can use to buy drugs or hire hitmen. Yes, incognito mode is not anonymous. Mixing is also used by Monero to anonymize transactions. Untraceable payments. Understanding the potential risk of unprotected metadata, he also saw financial transactions in the same light. In an increasingly digital world, Chom believed that e-commerce would play a huge role in the world, but so would the traceability of consume payments. He believed that the timing of transactions and goods purchased not only enabled the tracking of people,

• 1:03:52David Hoffman?

  but allowed for the profiling of individual lifestyles, consumer choices, and political leanings. Quote, "The time of payment for every transaction made by an individual can reveal a great deal about the individual's whereabouts, associations, and lifestyle. For example, consider the payments or such things as transportation, hotels, restaurants, movies, theater, lectures, food, pharmaceutical, alcohol, books, periodicals, dues, religious and political contributions." In 1980, he patented a digital cash system secured by cryptography, which would form the basis of cryptocurrency. Patent number 4529870 outlined a protocol that was able to conduct financial transactions with an external system, exchange data with an external system,

• 1:04:36David Hoffman?

  contain an ID linking to the ownership of data within the external system, store data relating to the interactions within the external system, and secure the stored data through cryptography where it could be accessed using a secret ID known to the owner. Chom later fletches out the concepts of anonymous payments in his paper, Blind Signatures for Untraceable Payments, that was later released in 1982. Similar to the concept of mixed networks, he proposed payment, his proposed payment protocol required including the masking of the sender, the amount being sent, and also the time of the transaction, stumbling onto the concept of decentralization. Back then, as a student, his work was dismissed as political and radical by his peers. Similar to Martin Hellman in the 70s at Stanford, Chom also faced scrutiny over his work.

• 1:05:21David Hoffman?

  Upon pursuing his doctorate studies, his head teacher told him, "Don't work on this, because you can never tell the effects of a new idea on society." Ironically, his head teacher would turn out to be right. Despite the pressure from his peers, Chom decided to continue his doctoral studies. Revisiting the ideas in his first paper about mixed networks, he decided to research the concept of trust in computer systems. As a hacker, Chom did not Trust central authorities and computer systems as he thought that they could be easily hacked. Instead, he believed that systems where participants were authorities were harder to compromise. Researching the concept of computer systems that establish trust between parties that don't trust each other, Chom argues for the need for decentralized services in his dissertation, "Computer Systems Established, Maintained, and Trusted by Mutually Suspicious Groups," paper 1982. Here are some quotes.

• 1:06:07David Hoffman?

  "It is not enough that the organization maintaining a computer system trusts it. Many individuals and organizations need to trust a particular computer system. There are many other similar applications of computers which involve private sector records relating to consumers, such as those arising from credit, insurance, healthcare, and employment relationships. Public sector record-keeping, such as areas as tax, social security, education, and military service, are quite similar. All of these applications involve one group who owns or controls the computer systems and who is particularly concerned with reliability in maintaining the operation of the system and with ensuring the survival of the data maintained by the system. They will be called trustees. A second group or set of groups are primarily concerned about the confidentiality of the data

• 1:06:52David Hoffman?

  which relates to them that is available to the system. There may be a third group or set of participants which may overlap with the first and second groups who are concerned about the correctness of the operation of the system." Initially led by his concerns towards communications metadata, his idea of mixed networks was one of the first concepts of a decentralized service. His concerns about metadata led him to focus on the need for anonymizing payments. While Chom was focused on personal privacy after having looked over his work and how he presents the concepts of decentralization, I personally don't think he understood the magnitude and importance of decentralization at that time. Chom presents decentralized services as a means of solving certain conflicts of interest between consumers and businesses in certain application aspects.

• 1:07:35David Hoffman?

  Rather than how it is portrayed in today's world as a sociopolitical movement, decentralization in his paper was first presented as an economical solution for businesses. Graduating in 1982, Chom decided to continue his research on cryptography. As the decade continued, Chom's ideas had started to mature and a vision of the future had started to form inside of him. Watching the growth of computing explode faster than anyone ever predicted, Chom was worried. Chom's warning to the world in 1985. "Computerization is robbing individuals of the ability to monitor and control the ways of information about them is used. Already, public and private sector organizations acquire extensive personal information and exchange it amongst themselves. Individuals have no way of knowing if this information is inaccurate, outdated, or otherwise inappropriate.

• 1:08:20David Hoffman?

  New and more serious dangers derive from computerized pattern recognition techniques. Even a small group of them using them and tapping into data gathered in everyday consumer transactions could secretly conduct mass surveillance, inferring individuals' lifestyles, activities, and associations. The automation of payments and other consumer transactions is expanding these dangers to an unprecedented extent." Wow. This is me, David, speaking now. This was in 1985, and I think we can extrapolate that into the world today where we talk about Twitter, Facebook, YouTube, and the control that these technologies implicitly have over our lives due to the metadata that we give these things for free. Pretty crazy that Chom predicted this in 1985. All right, back to the article.

• 1:09:06David Hoffman?

  "Acknowledging Orwell's dystopian world with the paper's title, it talks about the dangers of using data that was building up around computing systems. Chom warned of this continuing trend of computerization, which would render society open to exploitation and mass surveillance. He also argued that surveillance might significantly chill individual participation and expression in group and public life. The inadequate security and the accumulation of personally identifiable records, moreover, pose national vulnerabilities. Information service providers and other major interests, for example, could retain control over various information and media distribution channels, while synergistically consolidating their position with sophisticated marketing techniques that rely on gathering far-reaching information about consumers."

• 1:09:49David Hoffman?

  The main body of his paper summarizes a decentralized economy based on his previous research into the decentralization of messaging and payments. Despite his ideas being previously fragmented, he then knew the true importance of his ideas. Surrounding decentralized services. Seeing the future that the world was moving towards, he was acutely aware of the crossroads which lay before society. Chom understood that the decision of the Internet's architecture would have enduring social and political consequences. Projecting the vision of two futures, one built with a current technology and one built with decentralized services, he saw that the two approaches appear to hold quite different answers. A quote from Chom. "Large-scale automated transaction systems are imminent. As the initial choice for the architecture gathers economic and social momentum,

• 1:10:33David Hoffman?

  it becomes increasingly difficult to reverse. Whichever approach prevails, it will likely have a profound and enduring impact on economic freedom, democracy, and our informational rights." So what is decentralization? One of the most fundamental beliefs Chom had was the right to personal privacy. With the world becoming ever more interconnected, he saw the need to protect personal data. He saw cryptography as a means of doing so. If you think about it, cryptography is essentially the practice of protecting information against individuals that didn't have access, permission to access it. Cryptography is a digital law enforced by the law of mathematics, a force beyond central control. No one is above it. And when individuals are empowered to control and protect their data using cryptography, only then can true personal privacy be realized.

• 1:11:18David Hoffman?

  Chom saw decentralized services as the means of protecting privacy. Enabled and secured using cryptography is something outside centralized control. Hence, this is why decentralized systems are trusted. He could believe in the math. He did not trust governments and companies. Sounds like a nutcase, right? Here is the author Peter putting in an image of the Edward Snowden leak from 2014 where the title is, "Edward Snowden Leaks That Exposed US Spy Program." We all know the implication of this. There's a lot of images here. I'm just going to scroll through them.

• 1:11:56David Hoffman?

  Ah, yeah, Facebook. "Cellphone metadata worries are added to the fallout from Facebook's data scandal."

• 1:12:07David Hoffman?

  The news. Users have been reporting that personal data held by Facebook shows that the social network has collected metadata about phone calls and text messages on Android devices. Facebook says that the logs are part of an opt-in feature, adding that it will never sell this data and this feature does not collect the contents of calls and messages.

• 1:12:30David Hoffman?

  Ah, yes, and then the final picture is Cambridge Analytica, a individual, I believe he was the president of it, could be wrong, giving a presentation where the title of the presentation is called "The Power of Big Data and Psychographics in the Electoral Process." Jesus, like, I don't even need to connect those dots for you. I'm sure the listener can do that. Alright, back to the article. Wow, was David Chom a time traveler? No, he was not a time traveler. He just had an exceptionally clear thought in his vision of the future. He was right, wasn't he? Yes, kind of. While it does seem that way, we haven't gone down the route of decentralization. No system is ever perfect, and I wonder if we would be dealing with the problems of the same magnitude if the world did follow the heat of Chom's advice.

• 1:13:14David Hoffman?

  Nevertheless, history has so far pointed towards the need for decentralized services. After 30 years after his paper, the world did indeed build itself around centralized services. With 2.2-plus billion users on Facebook, the world's data was protected by goodwill. Goodwill did not hold up. Goodwill and the promise of Facebook had little power against the CIA and government. The lack of cryptographic ownership led to the abuse of data by Cambridge Analytica. So is it too late? While the internet might have taken a wrong turn, nothing points to the fact that things are too late to change. That's what history is full of: evolutions in culture, technology, and society. The world will always be moving, the question is just where.

• 1:13:54David Hoffman?

  After the 80s, Chom spent the rest of the decade researching cryptography, and by 1988 had moved into the Netherlands, starting his own research group, and after a decade of research, he would finally act on his vision of a decentralized world. He founded his company Digicash in 1990, and then created ECash, the first world's first digital cash system. Gaining worldwide attention, many cryptographers interned and worked for Digicash, including Hal Finney, Nick Zabo, and Eric Hughes, one of the founders of the Cypherpunks, a movement that will be explored in the next part of the series. Digicash would experience highs and lows, rejecting a $180 million acquisition from Microsoft, only to declare bankruptcy a while later. If you want to read more about Digicash, there is a link in the article.

• 1:14:36David Hoffman?

  By the end of the 1980s, Chom had become one of the most well-regarded cryptographers in the world. Chom was one of the people who knew where the world was going. He understood things that others didn't. Deciding to focus on building a company, he would leave behind the seeds that would ultimately bloom into the 90s cypherpunk movement. This movement would go on to stand for the liberty and the fight against governmental injustices of the 90s. Do you remember what the head of the teacher said to Chom back when he was still a student at Berkeley? "Don't work on this, because you can never tell the effects of a new idea on society." Alright, that is the end of part two. Onto part three. Continuing on from the 80s. During the 80s, technology, software, and computing made massive strides. In 1982, Adobe, Autodesk, and Sun Microsystems were founded. 83, Intuit

• 1:15:21David Hoffman?

  was founded and Microsoft Word was released. In 1984, Cisco was founded, Dell was founded, Hewlett-Packard released their first inkjet printer. 1985, AOL was founded. 1987, McAfee Antivirus was founded. 1989, Adobe Photoshop 1.0 was released, and Apple broke into the top 100 US companies ranked by revenue. While the world of tech shot ahead, other areas of life, law, and society failed to keep up. The Wild West of the internet was soon ruled by hackers with usernames that even 12-year-olds of today would cringe at. Criminals were becoming increasingly sophisticated through technology while the US government had remained recklessly

• 1:16:02David Hoffman?

  clueless. Agent Baxter and the legendary Star Wars defense contractor Autodesk. In early April 1990, a rock band lyricist named John Perry Barlow received a call from the FBI asking for an interview. He was an early user of the internet and was part of many online communities. And while he didn't know why the FBI had contacted him, he thought it would be suspicious to turn down their request. A few days later, Special Agent Richard Baxter from the Federal Bureau of Investigation showed up at his doorsteps. Barlow was accused of being a part of a hacker group called New Prometheus, where they had distributed stolen Macintosh ROM source code. Despite Agent Baxter producing little evidence of his allegations, Barlow soon realized that he could not get through to Agent Baxter.

• 1:16:46David Hoffman?

  Involving software and technologies, you would probably assume that someone half competently knowledgeable would be sent to investigate Barlow. Apparently, no. According to Barlow, quote, "Complicated by Agent Baxter's fairly complete unfamiliarity with computer technology, I realized right away that I that before I could demonstrate my innocence, I would first have to explain to him what guilt might be." The interrogation dragged on for three hours. He had been told, for example, that Autodesk, the publisher of AutoCAD, was a major Star Wars defense contractor and that its CEO was none other than John Draper, the infamous phone freak also known as Captain Crunch. As soon as I quit laughing, I started to worry. Similar to how a dad might initially laugh at the clumsy moron of a son,

• 1:17:31David Hoffman?

  as Barlow sat there, he soon started to worry for the future of America. At that moment, he realized how the confusion of Agent Baxter and the rest of the government might put everyone else's rights and freedoms at risk. After three hours of beating a dead horse, Special Agent Richard Baxter had let him go. Barlow posted his experience onto Well, the first online community forum. Created in 1985, it was where the hipsters of yesterday hung out. Not long after, he was contacted by another member who had a similar experience. That member was Mitch Kaper, a software kingpin of the 80s. He was the founder of Lotus, a company that made note-taking software, and had in the last decade released its first spreadsheet software.

• 1:18:14David Hoffman?

  Lotus would later be acquired by IBM for 3.5 billion in 1990. Kaper was also accused of the same crimes committed by the hacker group New Prometheus. He was also very alarmed by the FBI's lack of understanding with software and technology. If the authorities didn't understand it, how could they respect the rights that come with it? Within a week, Kaper had flown out to meet with Barlow. As a snowstorm raged outside Barlow's offices, they talked about their experiences as well as the recent Secret Service raids of Operation Sun Devil. Operation Sun Devil was a part of the Clinton administration law enforcement effort targeting cybercrime. Early in January, they had released a public statement announcing it. Our experience shows that many computer hacker suspects are no longer misguided.

• 1:18:56David Hoffman?

  ...teenagers mischievously playing games with their computers in their bedrooms. Some are now high-tech computer operators using computers to engage in unlawful conduct. "The right of the people to be secure in their persons, houses, papers, and effects against unreliable searches and seizures shall not be violated and no warrant shall be issued but upon probable cause, not without support by oath or affirmation in particularly describing the place to be searched and the persons or things to be seized." This roughly translates into, "To fight crime, we can now do anything we want, but hey, we will try to not violate and abuse anyone." One of the first targets of Operation Sun Devil were a hacker group known as the Legion of Doom, and soon after the members known as Alphid, Alphid, Acid Freak, Fiber Optic,

• 1:19:41David Hoffman?

  and Scorpion were raided. Accused of hacking phone systems, the Secret Service kicked down the doors and turned their house upside down. The computers were confiscated along with books, notes, telephones, audiotapes, and other suspicious electronic equipment. Barely eighteen years old and still living at home, their families were also subject to police treatment. Near the end of their discussion, Barlow and Caper, they both realized that they complete overstep of their civil rights and knew that something needed to be done to defend them, the beginning of the Electronic Frontier Foundation. Wealthy from his ventures, he agreed to cover all legal costs and defend the hackers' case. Within a week, Barlow and Caper were in New York, setting up the legal team for the three teenagers.

• 1:20:21David Hoffman?

  They decided to work with RBSKL, Rabino, Rabinoits, Bootin, Standard, Krynsky, and Lieberman, the law firm renowned for defending civil liberties. The day after, Acid Freak, Fiber Optic, and Scorpion would rock into, walk into RBSKL's chamber to become the first cyber-conflict of the 90s. After doing so, a journalist reached out to follow up on Barlow's experience with the FBI. During his phone call with the journalist, Barlow happened to talk about his efforts with Caper in defending the hackers. Unexpectedly, several days later, the news, uh, the newspaper headlined, "Lotus Founder Defends Hackers." The headline stormed the public and soon went viral. Steve Wozniak, the co-founder of Apple, reached out and jumped on board as an advisor,

• 1:21:04David Hoffman?

  agreeing to give unlimited funding to the legal efforts of Caper and Barlow. Alongside Wozniak, they were joined by John Gilmore, a tech entrepreneur. Gilmore was known as a troublemaker with a hobby that included annoying the NSA. Just the year before, in 1989, he had leaked an NSA banned cryptography paper. During his career as a self-taught programmer and Sun Microsystems' fifth employee, he was known to "never take on a job unless he was convinced it was the right thing to do." Being rich from Sun Microsystems' stock options, he spent the latter half of the 1980s hosting the alt-forums, known for being a place where anarchists, lunatics, and terrorists hung out. More recently, in 1989, he started up a company called Cygnus Support

• 1:21:46David Hoffman?

  to pursue his passions: freedom of speech, freedom of software, and freedom of encryption. As an anarchist and freedom fighter, the group of Barlow and Gilmore represented what he believed in. Soon after the publicity, they learned of the raiding of Steve Jackson Games. Similar to the Three Hackers, the game company had their whole office confiscated by the Secret Service. At the time, Steve Jackson Games was making a video game titled Cyberpunk, which the CIA believed to be a handbook for computer crime. The Secret Service looked into all their emails and had even deleted many, as reported by the company. The Secret Service was recklessly out of control and had no concept of digital rights. On the 8th of June 1990, Barlow released his iconic paper, Crime and Puzzlement. He writes about everything that had happened leading up to the involvement

• 1:22:31David Hoffman?

  of Capers, Wozniak, and Gilmore in the defense of Three Hackers. "America is entering the information age with neither laws nor metaphors for the appropriate protection and conveyance of information itself." Feeling the need for a formal organization to fight against injustices, at the end of the article, he reveals the formation of the Electronic Frontier Foundation, EFF, an organization that would raise and disburse funds for education, lobbying, and litigation in the areas relating to digital speech and the extension of the Constitution into cyberspace. Word of the EFF traveled fast, and to Barlow's surprise, he had touched upon an issue which received overwhelming levels of public acknowledgement. The Steve Jackson Games case would go on to set historical precedent and categorize electronic mail along with voice calls where a warrant was needed to gain access to them.

• 1:23:16David Hoffman?

  A pretty good bill. Early in next year in 1991, Senator Biden added an addition to Bill 266, a piece of legislation focused on anti-terrorism. The addition to the bill allowed for the government to access "plain text contents of voice, data, and other communications when appropriately authorized by law." It basically meant that the government would be able to spy on all communications available at will, all forms of communication. At the time, a software engineer who was building an encryption program heard about this news. Known as Phil Zimmerman, he spent the last decade heavily involved in liberal politics as a nuclear freeze activist and more recently started focusing on technology. He was building a tool that could allow anyone with a computer to encrypt messages and files

• 1:24:00David Hoffman?

  using the RSA encryption algorithm. Considered to be of military grade, RSA had only been used commercially, but Zimmerman believed that everyone should have access to strong cryptography and the ability to communicate privately. His program was called PGP, which stood for "pretty good privacy", a name inspired by the grocery store known as Ralph's Pretty Good Grocery. He had been vaguely debating how he was going to make a business from PGP, but when he learned of Bill 266, he did not take the news lightly. He saw it as impending doom. The government was about to legalize spying and the exact activity his software was looking to protect against. Taking the bill as the ultimate deadline, Zimmerman rushed to get it into the hands as many people as possible. Missing five mortgage payments in a row, Zimmerman said,

• 1:24:46David Hoffman?

  "This is not a commercial product, it was a humans' rights project." And while version 1.0 was considered to be weak and poorly written, the recipe of sleep deprivation, having no money, and rush work is not an optimal one for writing software. Zimmerman released PGP in May of 1991, along with his famous article, which included the software docs "Why I Wrote PGP." If privacy is outlawed, only outlaws will have privacy. Intelligence agencies have access to good cryptographic technology. So do the big arms and drug traffickers. So do defense contractors, oil companies, and other corporate giants. But ordinary people in grassroots political organizations mostly do not have access to affordable, military-grade, public-key cryptography tech-

• 1:25:27David Hoffman?

  Until now, PGP empowers people to take their privacy into their own hands. There's a growing social need for it. That's why I wrote it. He started uploading PGP to different forums and sites. It was open source, free, and didn't require a license for commercial use. He wanted to be, he wanted to put military-grade encryption into the hands of everyday people in anticipation of impending doomsday. Helped out by his activist friends, PGP started to spread. Did you know, before the rise of most totalitarian governments, they confiscated and banned the ownership of guns? This was the case in Nazi Germany, the Soviet Union, and Italy during World War II, etc. Within a week, people started using it around the world, and within a month, thousands had already downloaded it.

• 1:26:11David Hoffman?

  It was soon used by Burmese freedom fighters, and even spread to Eastern Europe, where one person replied to Zimmerman, "If dictatorship takes over Russia, your PGP is widespread from Baltic to the Far East now, and will help democratic people if necessary." However, in spite of Zimmerman's scurried efforts, civil liberty groups, including the EFF, had rallied against Senator Biden, and the addition was removed from Bill 266. It turned out that it was Biden who ultimately motivated the urgent release of PGP into the public. May and Hughes, two very crazy individuals. Early next year, Gilmore hosted a party in San Francisco, where he invited cryptographers together to hang out and drink. That was when Eric Hughes and Timothy C. May met. Hughes was a young mathematician who had just come back from Amsterdam, where he was, where he worked with David Chalm's Digicash.

• 1:26:57David Hoffman?

  May was originally a hardware engineer at Intel, who had just spent the last three years attempting to write a non-fiction novel about David Chalm's ideas. Whilst Eric was still in his mid-20s and May was in his late 30s, they immediately connected over their equally crazy libertarian views. By chance, they were both also equally obsessed with David Chalm's work. Timothy C. May was a rugged character, having been brought up by a naval officer. He was a free-spirited libertarian from the early age of 12, where he very much enjoyed his guns. Holding a pleasantly heavy, cold metallic firearm felt liberating and empowering. In a similar fashion, while Chalm played with his locks and safes as a child, May's favorite toys were his AR-15. assault rifle and his 357 Magnum.

• 1:27:40David Hoffman?

  Fittingly, May pursued a career as a hardware engineer. During the eighties, his libertarian views gravitated him towards the wild west of cyberspace and fantasized how encryption makes it easy and even safe to ignore most local laws about what can be done in cyberspace. In 1986, he read David Chalm's paper, "Security Without Identification: Card Computers to Make Big Brother Absolute," and quit his job. He wanted to write about David Chalm's ideas. Leaving Intel as an employee rich from stock options, he started to write a novel called "Degrees of Freedom." May attempted to write about a world ruled by digital money and data heavens, "blockchains?" Question mark, "time stamping and NSA surveillance."

• 1:28:23David Hoffman?

  And similar to most teenagers who wrote about spy fiction, he never finished the novel. Being an engineer at heart, after three years of struggling as a writer, he was done with the sidelines. "I don't want to work on this stupid novel. I want to actually build this elaborate world that I was imagining." Eric Hughes had studied mathematics at Berkeley as an undergraduate student. During his time there, he was first exposed to the work of David Chalm at a cryptography conference, Crypto86. Chalm had been talking about a system of digital money where he stressed the importance of anonymous payments in the increasingly digital world. Unlike others, Hughes was captured by the political implications of technology and cryptography.

• 1:29:04David Hoffman?

  After a short consulting stint, he left for Amsterdam to work for David Chalm's Digicash. But despite being obsessed about his research, Hugh described how he was not too fond of Chalm's personality, a comment that would not surprise any of the past and present Digicash employees. After a short stint at Digicash, he came back home. He had come back earlier in May 1991 to apply for a Berkeley graduate school. As Hughes had mentioned needing a place to stay while he looked for a place to rent, May offered to cover him. While it made sense then, Hughes agreed and came to live with May for a short while. Upon arriving, he ended up doing very little of what he was intending to do, look for a place to live. Instead, Hughes and May spent the three days straight just talking about crypto.

• 1:29:48David Hoffman?

  Whilst others had day jobs, May was a rare mix of being rich as well as a failed author, and Hughes was a young 20-something-year-old with no responsibilities. "We spent three intense days talking about math, protocols, domain-specific languages, secure anonymous systems. Man, it was fun," said May. The first meeting. Later in September of 1991, Hughes, May and Gilmore came up with the idea of gathering a regular meetup of tech libertarians. They liked the idea and sent out Hughes to a newly rented house. So on a September Saturday morning, 30 or so academics, engineers and crypto advocates sat on the unfurnished floor of Hughes newly rented house. And so it began.

• 1:30:29David Hoffman?

  May had prepared 57-page handouts detailing concepts of cryptography and other background information on the discussion that they planned. They included a diskette copy of PGP 2.0, which was released the week before. After ceremoniously distributing the packets, he began the meeting by reading aloud his five-year-old creation to which he called "The Crypto Anarchist Manifesto." It was a political manifesto written back in 1988 during May's short-lived career as an author. It projected a vision of a future where the world's data, liberty and governance were ruled by laws of cryptography and mathematics. He had originally written it for the cryptography conference, Crypto 1988. He printed out hundreds of copies and gave them out, but no one cared too much about the political implications of cryptography.

• 1:31:11David Hoffman?

  But unlike those present at the Crypto 88 conference, as May read the manifesto out, the motley crew of crypto fanatics who sat on the floor nodded and grumbled in approval. Excerpt: "If the government can't monitor you, it can't control you. Politics has never given anyone lasting freedom, and it never will." May didn't trust in the protection of privacy and freedom with companies. Instead, he trusted the law of mathematics to do so. May, in an early video conference in 2017, commented how at least one or two of the people present had probably created Bitcoin. After initial discussions around the world they lived in, they started to play a series of role of playing games that simulated cryptographic concepts. By now, you would probably have realized how huge geeks these people were.

• 1:31:54David Hoffman?

  For the rest of the afternoon and evening, they used paper and envelopes to play out digital money, information markets, pseudonyms, hypothetical drug trading systems and reputation systems. They had naturally arrived at the issue that Chalm had originally encountered: metadata and its exploitability. Frustrated at how cryptography had made little progress since the 80s, they talked about how they would go about implementing Chalm's solution of a mixed network. The group talked about cryptography all night long and ended up sleeping on the floor of Hughes' bare floor. During the next morning, while Hughes and May were buying bagels, they asked themselves, "Why limit the club to the physical world when the real mass of potential cryptography fanatics were on the cyberspace?" They realized that the internet was going to be built in chatrooms, not in someone's living room.

• 1:32:37David Hoffman?

  Within a week, Hughes developed mailing list 1.0, a re- a re-mailer list, think like an email chatroom. The mailing list would send mails to and from different users and hide the original sender's identity behind a pseudonym. Hal Finney would implement PGP 2.0 into the re-mailing list, and another cypherpunk called Kotril would implement message batching to hide the timing of messages. Hughes' girlfriend Jude Millen, the editor editor of a tech magazine, commented how "You guys are just a bunch of cypherpunks." A play on the world "cyberpunk" and "cypher", the term would soon be worn as a badge of pride and political defiance. Within a month of the first meeting, the mailing list was up and members could subscribe by emailing [email protected].

• 1:33:20David Hoffman?

  After 13 years, David Chom's concept of a mixed network was finally realized. The birth of the cypherpunks. This mailing list would become the harbor of America's most back-channel discussions surrounding cryptography, drug markets, assassinations, and government politics. Julian Assange, along with the creators of Tor, BitTorrent, and most likely Bitcoin, were part of this list early on. Within a week, it had 100 subscribers, and by the end of the year, there would be over 2,000 similar re-mailers hosted around the world. One of the first messages serviced on the 10th of October 1992, which announced the details of the second cyberpunk offline meetup. This time, it would be held in the offices of Cygnus Support, Gilmore's company in Mountain View, where Google now currently resides in.

• 1:34:03David Hoffman?

  Here's a what seemed to be an email from the email list. "The second meeting, October 10, 1992." The second meeting will be held in the new Signus offices. Exact address and directions to follow. We do not have yet an exact agenda, but one should be arriving in the next few days. Please mark your calendars now and start telling your friends. For this meeting and until further announced, we are using a transitive trust system for invitations. Invite anyone you want and let them invite anybody they want and so on. The crypto anarchy game we tried out at the first meeting was a good success as we could have hoped for from an untested idea. The game seems useful and fun enough to warrant continued play and playtesting, so we'll be playing it again and on future meetings.

• 1:34:45David Hoffman?

  We've observed several interesting emergent behaviors in the first session, including resellers and reputation behaviors. We'll play a two-hour session this time and discuss it afterwards. The Cyberpunk's List is a forum for discussion about technological defenses for privacy in the digital domain. Cyberpunk's assume privacy is a good thing and wish there were more of it. Cyberpunk's acknowledge that those that want privacy must create it for themselves, not expect governments, corporations, or other large faceless organizations to grant them privacy out of beneficence. Cyberpunk's know that the people have been creating their own privacy for centuries with whispers, envelopes, closed doors, and couriers. Cyberpunk's do not seek to prevent other people from speaking about their experiences or their opinions.

• 1:35:28David Hoffman?

  The most important means to the defense of privacy is encryption. To encrypt is to indicate the desire for privacy, but to encrypt with weak cryptography is to indicate not too much desire for privacy. Cyberpunk's hope that all people desiring privacy will learn how best to defend it. Cyberpunk's are therefore devoted to cryptography. Cyberpunk's wish to learn about it, to teach it, to implement it, to make more of it. Cyberpunk's know that cryptographic protocols make social structures. Cyberpunk's know how to attack a system and how to defend it. Cyberpunk's know just how hard it is to make good crypto systems. Cyberpunk's love to practice. They love to play with public key cryptography. They love to play with anonymous and pseudo-anonymous mail and forwarding and delivery.

• 1:36:12David Hoffman?

  They love to play with the DC nets. They love to play with secure communications of all times. Cypherpunks write code. They know that someone has to write the code to defend privacy, and since it's their privacy, they're going to write it. Cypherpunks publish their code so that their fellow Cypherpunks may practice and play with it. Cypherpunks realize that security is not built in a day and are patient with incremental progress. Cypherpunks don't care if you don't like their software they write. Cypherpunks know that their software can't be destroyed. Cypherpunks know that a widely dispersed system can't be shut down. Cypherpunks will make the networks safe for privacy. Continued. The second meeting of the Cypherpunks will be Saturday at noon. John Gilmore has graciously

• 1:36:54David Hoffman?

  provided us with a meeting space at the new Cygnus support offices. These offices are so new, in fact, that Cygnus will not have been moved in yet. This meeting will be a bring your own pillow or chair, since it will likely be held in a largely empty space. Directions are at the end of this message. Attendance is transitive trust arbitrarily deep. Invite whoever you want, let them also do so, and so on. Invite them also to join the mailing list. Do not, however, just post the announcement. Time will come for that. I'd like everyone who plans on attending this meeting to send me [email protected] a message telling me so. I'd like to get a rough headcount before Saturday for game planning. We are starting at noon because of popular demand. Eat beforehand or bring a burrito or something. It will be fine to eat during the

• 1:37:37David Hoffman?

  first segment. It won't be any more disruptive than the game is. Bring your own PGP public key for in-person key distribution, preferably on diskette. We need a portable PC or three to do key distribution. If you have one, you can bring, post it to the list, and tell people. We realized after the first meeting that a strict schedule was nonsense. This meeting will have a very informal schedule. Starting at noon, we're going to play Session 2 of the Crypto Anarchy game, in which players try to conduct business under the watchful eyes of others. We want to play for two hours and then have a discussion of about experiences afterwards for about an hour. Some of the improvements over last time will flatter denominations of money, wider distribution of commodities, more watchers, governmental and otherwise, and perhaps some pre-printed forms.

• 1:38:22David Hoffman?

  We'll take a break to regroup for about 10 or 20 minutes. For the second half, we'll talk about the security of remailers. I'll lead the discussion. We'll be designing protocols and analyzing attacks and defenses. I've done this with DigiCash for electronic money protocols, and remailers are much easier, but still probably more than an afternoon's discussion. We'll do this until 6:00 or so, when people will have to start leaving. Everyone who wants to will go out to dinner. I don't know any of the restaurants down there. Perhaps someone can suggest one. And then the rest of the email is this, the directions. Okay, so back to Peter Pan's article. That was just an email thread that was part of the Cypherpunks email thread. Now we're back to the article from Peter Pan. "Cypherpunks assume privacy is a good thing and wish there were more of it. Cypherpunks are devoted to cryptography.

• 1:39:08David Hoffman?

  Cypherpunks love to practice 'cypherpunks write code.' Unlike other political movements throughout history, the Cypherpunks were able to equally match and defeat the government through direct action. An archive of the messengers are available online. Here's an archive of the first year of messengers." There's a link in the article. John Gilmore's shenanigans. "So while Gilmore was running his company organizing crypto rebel meetups, he was caught up with another hobby of his, annoying the NSA. He had been battling a court case with the NSA and scored another win for the Cypherpunks. Earlier that year, in the June of 1991, he had learned of some books written by a cryptographer known as William Friedman. He was the founder of the U.S. Signal Intelligence Service, the precursor to the NSA. After reading two volumes of Friedman's work,

• 1:39:52David Hoffman?

  he realized that the other four volumes were classified. He asked for them to be declassified. They said no. This was not because Gilmore was a pain in the ass, but instead, he had stumbled across one of NSA's founding documents. So being a curious George, he started hunting for them and ended up in Virginia after being tipped off by a friend. When he found the exact books that were classified by the NSA, he mailed them to himself. However, life was not as simple as that. Under surveillance, the NSA demanded him to hand them over. Denying the request, he argued how these textbooks are relatively simple cryptographic techniques and that he obtained them legally. To get them off his back, he gave his story to the press, and after a front-page headline focusing on the NSA, they dropped the pursuit of Gilmore and the books, soon after the books were declassified.

• 1:40:37David Hoffman?

  The NSA hated the publicity and were forced to give it up." So after all that effort, what value were the books to Gilmore and the cypherpunks? Apparently, nothing. Gilmore just wanted to stand up to the NSA and prove that government could be defeated. Gilmore won, NSA zero. PGP 2.0 gets into trouble. Early next year, in 1993, PGP fell into the sights of the US government. After having attention drawn to Zimmerman through RSA's intellectual property dispute, regulators initiated a criminal investigation on the Violation of Arms Export Control Act. Cryptography since World War II had been considered as a military product and controlled within the same class as munitions. While back then, the world was made up of stone and chalk, in the 90s, it was a digital one, where software and computing led to the US's

• 1:41:22David Hoffman?

  GDP. With Zimmerman given a court date, the EFF and the public rallied behind him. In response to the government, he printed copies of PGP's source code on hardback to cover as a political stunt. Books were protected by the First Amendment under free speech, but cryptography was outlawed. What about a book that had cryptographic source code? What was that then? But despite all the ridicule the public threw at the government, it was clear as day. Zimmerman could not deny it. He had violated the Munitions Act. Things looked grim for the software engineer-turned-hippie. Quote, "To have 10 lawyers unanimously tell me that it was hopeless, it was a ton of bricks. It was the worst day," says Zimmerman. His all-star legal team was sure of defeat, until one of them had an idea. Known as Phil

• 1:42:07David Hoffman?

  DuBois, he built his reputation through creativity in defending criminals, celebrities, and generally crazy people who did stupid things. Instead of denying and pleading, DuBois's idea was to go on the offensive and portray the government as a danger to freedom. This would be the come, this would become key to the Zimmerman defense. And luckily for Zimmerman, the government would soon step into its own noose. Shortly after the Zimmerman case in April 1993, the Bill 266 had come back in another form: the Clipper Chip. Sinking the Clipper Chip.

• 1:42:38David Hoffman?

  There was no better time to release an NSA spy device that allowed federal, state, and local law enforcement officials the ability to decode and intercept voice and data transmissions. Its timing was perfect to further piss off an already irritated nation that stood behind Zimmerman. The Clipper chipset was a manufacturing standard that encrypted data. Similar to the DES of the 70s, it had been part of the Clinton administration’s attempts to manage the country’s security. The government just wanted to protect everyone by having access to everything, everywhere, whenever they wanted. And while the DES of the 70s had had suspicions of being backdoored, the Clipper chip was straightforward about it. It was part of the chip’s inherent design and was openly announced through its proposal.

• 1:43:20David Hoffman?

  It had a slight improvement upon the DES 56-bit key and used an 80-bit key. And like most government projects today, back then you could also trust the quality of the work. That sarcasm, by the way. With a healthy distrust of the government and fresh memories of the last three years when the Clipper chip was announced, the public erupted against it. They had just woke this sleeping bear: a very excited crew of cypherpunks. Official civil rights groups such as the EFF responded to the proposal in well-tempered criticisms of how it endangered freedom. But in the general public population, frenzy and paranoia ensued. Orwell’s dystopian world of 1984 was about to come true.

• 1:44:01David Hoffman?

  In contrast to the mainstream urgency, the cypherpunks were rather excited. Imagine this: you forecasted a doomsday and had started preparing for it, and 10 years later, it happens. And sure, while the world looked like it was going to end, it would be hard to not get excited to watch the world scramble and arrive at the same conclusions which you had already arrived at. The cypherpunks predicted and expected this day. “The war is upon us,” announced Timothy C. May. Clinton and Gore folks have shown themselves to be enthusiastic supporters of Big Brother. Timothy C. May, Eric Hughes, John Gilmore, and other cypherpunks rallied against this news with a level of giddy enthusiasm.

• 1:44:42David Hoffman?

  And while the cypherpunks openly opposed the chip and debate raucously about its withdrawal, many others, including May, did not actually take it too seriously. They knew the vulnerabilities of the chip design and how public key cryptography fundamentally becomes useless the moment anyone else has the private key. The backdoor of the chip was almost like a sick joke to them. On the day of the release, May wrote: First, the bad news. The government wants to control encryption. Though they are playing coy about it, it's clear that eventually they will try and ban, quote, "the good stuff." It's clear Zimmerman and others have gotten their attention. Now, the good news. It does not matter. The game is over. We won. The government may engage in holding actions, but it still doesn't matter.

• 1:45:24David Hoffman?

  What we have here is the state's pitiful attempt to make the best of a bad situation. This amazing policy announcement is a tacit admission of defeat. How can I be so sure? The cat is out of the bag. Free, male-spec data encryption is readily available for all. Within a year, equivalent voice encryption freeware will join it. There is no way the government can stuff the encryption cat back into the bag. They can pass their laws. We will do as we please, and they will help us. Nonetheless, there had been an emergency meeting at the offices of Cygnus Support. With fifty cypherpunks tightly packed into a room, they would brainstorm ideas to destroy and rebel against the government. Similar to how in Fight Club, Tyler Durden would hand out assignments the cypherpunks

• 1:46:07David Hoffman?

  printed off parody stickers that said "Intel Inside", and stuck them inside of computer stores where May had originally drawn it on a whiteboard as a joke, referring to Big Brother Inside. Other designed t-shirts that shouted "Fight the Clipper" had lines from May's Crypto Anarchist Manifesto. Whitefield Diff was a major influencer during this Clipper Chip saga, and would later write a famous public letter to the Clinton administration. Here's an excerpt. "No right of private conversation was enumerated in the Constitution. I don't suppose it occurred to anyone at the time that it could be prevented. Now, however, we are on the verge of a world in which electronic communication is both so good and so inexpensive that intimate business and personal relationships will flourish

• 1:46:50David Hoffman?

  between parties who can at most occasionally afford the luxury of traveling to visit each other." If we do not accept the right of these people to protect the privacy of communication, we take a long step in the direction of a world in which privacy will only belong to the rich. The import of this is clear. The decisions we make about communication security today will determine the kind of society we live in tomorrow. Early next year in 1994, a national council of 40 experts, industry leaders, and academics wrote a public, open letter to the Clinton administration, asking for the Clipper proposal to be withdrawn. This group of 40 included all three original creators of public key cryptography: Martin Hellman, Whitfield Diffie, and Ralph Merkle. Ronald Rivest, one of the creators of RSA encryption.

• 1:47:35David Hoffman?

  David Chom, founder of DigiCash. Philip Zimmerman, creator of PGP. Here's an excerpt. "The Clipper proposal should not be adopted. We believe that if this proposal and the associated standards go forward, even on a voluntary basis, privacy protection will be diminished, innovation will be slowed, government accountability will be lessened, and the openness necessary to ensure the successful development of the nation's communications and infrastructure will be threatened." Next section. "Government: Don't worry, we have it covered." Next year, during May of 1995, the NSA finally responded. Failing to give an inch of ground, they responded through a fairly pointless press release that attempted to assure the public of the chip's security. "The cryptographic strength of the Clipper algorithm is very substantial and should be highlighted.

• 1:48:19David Hoffman?

  With regard to the AT&T TSD 3600 device and other similar devices, these vendors almost exclusively employ DES encryption. DES encryption is based on the use of 56-bit key information. Clipper employs an algorithm, which is based upon an 80-bit key. Although it's 20 bits longer, although it's only 24 bits longer, Clipper encryption provides 16 million times as many permutations, which makes it geometrically more difficult to decrypt. This fact is a critical counterpart to the encryption methodology and makes Clipper encryption attractive." By 1994, the communications manufacturer AT&T had started creating hardware with the chip. Communication companies were starting to use the chip.

• 1:49:00David Hoffman?

  But despite this, the ideology of the cypherpunks had reached far and wide. As the chip was released into commercial products, the cypherpunks soon had eyes on the restricted design of the chip. An AT&T embedded systems engineer called Matt Blaze had the job in testing the chip for production and was able to examine it closely. He discovered that while the cipher itself was relatively secure, the NSA's key for access to the encrypted backdoor was only a 16-bit hash that could be brute-forced. It turned out that Blaze was also a cypherpunk and part of the mailing list. After consolidating his findings, he published them in 1994, effectively breaking the chip's design. Soon after his findings, the Clipper chip was discarded and found impractical by the government and also commercial producers.

• 1:49:43David Hoffman?

  The tides were finally starting to turn. Next year, the cypherpunks' efforts would continue and transition into a series of legal battles. Karn vs. the United States. Soon after the vulnerability of the Clipper chip was released, a programmer known as Philip R. Karn stepped up to the challenge the government's classification of cryptography as a munition. He ordered an assessment of a book that contained cryptographic source codes for encryption algorithms. Unable to dispute the claim, it was found that the book was not subject to the Munitions Act. Karn continued to request a second assessment of the book's CD disk, which contained the source code detailed inside the book. But unable to prove otherwise, it fell under the Munitions Act. The nuances here were decided on the potential ability to cause malice through the medium

• 1:50:27David Hoffman?

  in which the source code was held on, but his efforts would not be wasted. Bernstein vs. the United States. Next year in 1995, Karn's case held the legal grounds for another challenge. A student of Berkeley called Daniel J. Bernstein attempted to publish a paper along with source code about his encryption protocol, and through his publication challenged the Munitions Act in Federal Trial Court of Northern California. Based off the precedent of Karn vs. the United States, the court ruled that the source code inside the paper was speech-protected under the First Amendment. While Karn's case had ruled text forms of source code to fall outside of the Munitions Act, Bernstein's case proved it to be protected by the First Amendment under free speech. The pieces of the puzzle were slowly coming together. Jungar vs. United States.

• 1:51:12David Hoffman?

  Peter Jungar would be the next to challenge the Munitions Act. He was a law professor who enjoyed teaching from first principles and wanted to, wanted his students to not only study but also play with concepts explored. For one of his courses, he was restricted to only take in international, non-US citizens, as he had included an encryption program in the course materials where it officially recognized as the export of cryptography. Held back from teaching, he announced his case against the Munitions Act, believing that it violated the First Amendment. Leveraging the recent cases of Khan, and, leveraging the recent cases of Karn and Bernstein, Jungar's case would emerge victorious later in 1999 to conclude how software would be protected by the First Amendment.

• 1:51:54David Hoffman?

  But immediately after Jungar's initial challenge, the Clinton administration gave in. Jungar's case would only be closed later on. Later that year, on the 12th of October, 1996, President Bill Clinton signed Executive Order 13026. Cryptography was officially removed from the munitions list and placed on a lightly-controlled schedule. The export of cryptography was no longer prohibited. Through this order, Zimmerman's case would also be dismissed as the consequences of exporting no longer carried any weight. The battle was won. But was it over? No. Coming full circle from Hellman, Diffie, and Merkel. Later in 1998, as the remaining legal cases surrounding cryptography were finally being closed, Gilmore looked to press on and completely destroy the government's claim and involvement

• 1:52:38David Hoffman?

  on future cryptographic technology. The Cypherpunks community has set their sights, the Cypherpunks community has set their sights on the DES. Originally released in 1976, it was an encryption standard that was provided for commercial use. The DES was what Martin Hellman and Whitfield Diffie had opposed and what inspired the open publication of public key cryptography. One of their criticisms of the DES was that it was 56-bit key was theoretically vulnerable to a brute force attack, but back in the 1970s, doing so was considered unfeasible with the degree of computing power available. But now in the year 1998, it was a different story. Later that year, RSA data security released a bounty to see who could crack a DES-secured message. After five months, it would be solved.

• 1:53:22David Hoffman?

  They set a bigger bounty of $10,000 to see if anyone could do it faster and better. After missing the boat on the first challenge, Gilmore, who by then had a successful business, took on the challenge with a cryptographer called Paul Kocher. He worked under and was trained by Martin Hellman, one of the three original public key inventors. Fitting for the mission that would bring history full circle, Gilmore and Kocher spent $222,000 to build a computer called Deep Crack. Within 56 hours, the DES was cracked. After about two decades of controversy, the DES was finally broken and soon officially declared defunct. By the year 2000, all restrictions and regulations surrounding cryptography had been removed by the government. Open source cryptography was legal and allowed.

• 1:54:06David Hoffman?

  At the beginning of the 90s, the world wasn't sure where it stood with cryptography until the government gave people a reason to care. The cypherpunks fought and won. They did so to protect the right of personal privacy and liberty through cryptography. They would continue to rampage through the 2000s, leaving behind in their trail Tor and the rise of the deep web, torrenting and piracy, WikiLeaks and transparency, but more relevantly Bitcoin and cryptocurrency. In the next part, Part 4, we will explore the creation of Tor, BitTorrent, WikiLeaks, and the birth of Bitcoin.

• 1:54:44David Hoffman?

  Here's some awesome pictures.

• 1:54:56David Hoffman?

  Standing on their shoulders are giants, huh?

• 1:55:13David Hoffman?

  Part 4, the last part, by the way, on the homestretch. Before Bitcoin, Part 4, the 2000s, New Millennium. Continuing on from the 90s. This movement fought the injustices of the US government and their treatment of digital rights. It all began over a series of hacker raids that would spark a decade-long skirmish between the cypherpunks and the government. With civil rights emerging victorious, the world was no longer in 1992. Cryptography was removed from the Munitions Act and code was officially deemed under the protection of the First Amendment Act of Free Speech. By the end of the 90s, it was a different world. MSN was founded in 95, Google was founded in 98.

• 1:55:54David Hoffman?

  In 2001, Apple would soon release its first iPod to change mobile technology forever. MySpace would emerge in 2003, Facebook in 2004, YouTube in 2005. The world was changing and a new era was on the cusp. But what about the cypherpunks? After the late 90s victory over the government, there was a short time period in which things seemed quiet. And naturally, there was no need for an underground dwelling of rebels anymore. Cryptography was legally open source and its export from the US spread its strong cryptography all over the world. By the 2000s, Cypherpunk mailing list activity was dying out. After the attack on 9/11, the government questionably increased their brute-force authorization on hosting services for investigations. And soon, Cypherpunk mailing lists were shut down.

• 1:56:39David Hoffman?

  As a joke, one of the last Cypherpunk mailing lists renamed themselves to [email protected]. In a recent video conference call in 2016, Timothy C. May remembers that, quote, "I didn't think it would be too smart to be part of a group labeled Alqaeda.net."

• 1:56:56David Hoffman?

  Many others thought the same, and the members of the list fled elsewhere. With over thousands of messages spanning over nearly a whole decade, it served as the cypherpunk war room and the home of the 90s techno-libertarian spirit. With the infamous mailing list coming to an end, things were just getting started for the cypherpunks. A Cambrian explosion of internet information services would erupt in the following decade and change society forever. And with developing applications of the internet from file sharing, video streaming, gaming, e-commerce, the cypherpunk missions of privacy and uncensored technological freedom stayed ever-relevant. The cypherpunk spirit continuously lives on through BitTorrent, the Tor network, Pirate Bay, WikiLeaks, the Silk Road, Darknet markets, and all its contributors, where many were

• 1:57:40David Hoffman?

  part of the original cypherpunks mailing list. Julian Assange was a very active member back in 1995, and so were core members of the Tor project, BitTorrent, and other open-source advocates. But also through Bitcoin and the Web 3.0. We often lose track of perspective of where we are in history. It is far too easy to look no further beyond the local maximum of technological innovation. That was the reason I wrote this series before Bitcoin. Bitcoin wasn't a eureka moment. It was a technology constructed with ideas and blueprints spanning over nearly half a century. It is part of a movement that has been brewing for the last 40 to 50 years, starting with Martin Hellman, Whitfield Diffie, and Ralph Merkle's open-source publication of public

• 1:58:25David Hoffman?

  key cryptography. They started the movement of the cypherpunks that would seed the ideology behind Bitcoin. It enabled true immutability and censorship-resistant data, but more importantly, it was a significant zero-to-one moment for decentralized technologies. The ragtag bits and pieces making up Bitcoin can be found in the waking trail of the cypherpunks. Satoshi built Bitcoin along with Hal Finney, Nick Zabo, and Wei Dai. It was handcrafted by the veterans of the 90s crypto wars. It was part of the inventing spirit of the cypherpunk movement that will continue to live on. While this might be a historical series, it is yet to conclude, as we are all part of it and continuing it. It seems motionless and still, but one thing is certain in history, and that is change.

• 1:59:07David Hoffman?

  And change has been part of the cypherpunks movement for the last 40 to 50 years. We have to take a step back and appreciate that Bitcoin, and now Ethereum, is simply another piece of the puzzle that will fit into our story and the movement of the cypherpunks. It is simply just another important stepping stone for the movement, just like public key cryptography, the Cypherpunks mailing list, BitTorrent, Tor, and WikiLeaks. We have to look beyond what is in the present and into the future in order to shape the world that we want. While David Chom knew about the consequences of a centralized internet, no one else believed him to work towards a better future. We may not realize it, but we are moving towards something that is way bigger than anyone can imaginably conceive: a future built on cryptography and liberty.

• 1:59:50David Hoffman?

  Even back in the 70s, Martin Hellman and Whitfield Diffie knew it themselves. We stand on the brink of a revolution in cryptography.

• 2:00:00David Hoffman?

  Here are some more pictures. Here's Andreas Intenopoulos, talking about Bitcoin to a crowd of four people in an empty room in 2013. Wow. Here's Gavin Wood, presenting Ethereum at DevCon 1.

• 2:00:15David Hoffman?

  Thank you, and it has been a pleasure writing this series. I hope you have enjoyed it. History is rich and full of surprises. It simply takes some effort to look around. There is a lot to be gained: knowledge, gratitude, and wisdom. Next time, look into it. You will find richness and delight on par with the creation of public key cryptography and the Cypherpunks themselves. The Before Bitcoin series pays homage to all the heroes who fought to protect privacy, freedom, and liberty. While the spotlight of this series did land on a select few, I want to also address those individuals who names were not mentioned: the names that fell through the cracks of history, the early internet engineers that wrote and maintained code for public infrastructure, the cryptographers who sought to protect the freedom of speech and privacy,

• 2:00:58David Hoffman?

  the vendors who risked their freedom to enable free commerce of contraband goods, the contributors who answered the Stack Exchange queries, the open source project managers, and the whistleblowers who sacrificed their own bringing to bring injustice into the light. Thank you.

• 2:01:16David Hoffman?

  And thank you, Peter, for writing this.

• 2:01:26David Hoffman?

  We hope you enjoyed the video. If you did, head over to Bankless HQ right now to develop your crypto investing skills and learn how to free yourself from banks and gain your financial independence. We recommend joining our daily newsletter, podcasts, and community as a Bankless Premium subscriber to get the most out of your Bankless experience. You'll get access to our market analysis, our Alpha Leaks, and exclusive content, and even the Bankless token for airdrops, raffles, and unlocks. If you're interested in crypto, the Bankless community is where you want to be. Click the link in the description to become a Bankless Premium subscriber today. Also, don't forget to subscribe to the channel for in-depth interviews with industry leaders, Ask Me Anythings, and weekly rollups where we summarize the week in crypto and other

• 2:02:11David Hoffman?

  fantastic content. Thanks everyone for watching and being on the journey as we build out the Bankless Nation.