It is a social and political current that preaches anarchy, denies all state power, and organizes political struggle, and employs cryptographically secure technologies of anonymization, digital pseudonyms, and digital money to circumvent state control — surveillance, censorship, and taxation.

How was it born?

In the 1940s, Western intelligence agencies began exploring the concept of a message’s recipient participating in the encoding process. Clifford Cocks, a British mathematician, proposed a model in 1973 in which an authorized recipient of a message could choose two giant indivisible numbers and multiply them, yielding a third giant number used as the public key.

There was no need to hide it because calculating the two original numbers was nearly impossible.

This concept became a working model in 1977, when three MIT professors, Ron Rivest, Adi Shamir, and Leonard Adleman, released RSA, a public-key cryptographic algorithm based on the computational complexity of the large integer factorization problem (an acronym for their last names).

The researchers predicted that RSA would be in high demand due to the massive proliferation of e-mail, which necessitates tools to ensure the privacy of messages transmitted online and to confirm the authenticity of their sources.

After Scientific American reported on RSA, the NSA concluded that it could limit its ability to track communications. The agency classified the algorithm as a “warfare technique” subject to federal weapons smuggling laws, requiring special distribution authorization.

When the first working prototypes of the Internet appeared in the 1970s, the issue of data protection in an open environment became urgent. The blind digital signature method, a public key encryption model, was developed by American cryptographer David Chaum, a student at the University of California, Berkeley, in 1978. Chaum’s invention enabled the creation of a database of people who could remain anonymous while ensuring the accuracy of the information they reported about themselves.

Chaum envisioned digital voting, which could be verified without revealing the voter’s identity, but primarily digital cash. In the mid-1980s, he was successful in developing a model in which users could make payments while remaining anonymous and ensuring the funds’ authenticity. Chaum’s discoveries were made known to a group of cryptographers, among whom a movement advocating computer technology as a means of overthrowing the state arose.

Timothy May, a former Intel chief scientist and American cryptographer, was the movement’s main ideologist. In 1987, May met Philip Salin, an American economist, entrepreneur, and futurist who founded the American Information Exchange (AMiX), a data trading networking platform.

May, however, was opposed to the idea of an electronic marketplace where people could sell irrelevant information to one another. He envisioned a global system that would allow for the anonymous two-way exchange of any information, similar to a corporate whistleblower system. He later finalized this concept in the form of the BlackNet system, which required a non-governmental digital currency and the ability to make untraceable payments in it.

In 1985, he read David Chaum’s article “Security without identification: transaction systems to render Big Brother obsolete”. Chaum described a system in the article that cryptographically conceals the buyer’s identity. May soon came to believe that public key cryptography, together with network computing, could “destroy social power structures”.

In September 1988, May wrote “The Crypto Anarchist Manifesto”, based on Karl Marx’s “Communist Manifesto”: “A ghost roams the modern world, a ghost of cryptoanarchy”. According to the manifesto, information technology will enable people to manage their lives without the use of governments, instead relying on cryptography, digital currencies, and other decentralized tools.

According to May, the ideological foundation of “The Crypto Anarchist Manifesto” was anarchism, specifically “anarcho-capitalism,” which emphasizes voluntary transactions and the free market.

How did the cypherpunk mailing list come about?

In 1992, Timothy May, John Gilmore (a computer scientist and one of the founders of the Electronic Frontier Foundation), and Eric Hughes (a mathematician at the University of California, Berkeley) invited 20 of their close friends to an informal meeting. During the meeting, they discussed the most pressing issues in cryptography and programming at the time.

Such gatherings became more frequent, igniting an entire movement. An email mailing list was created to attract other people who shared the interests and core values of the founding group. The mailing list, Cypherpunks, quickly grew to hundreds of subscribers as they tested ciphers, exchanged ideas, and discussed new developments. The correspondence was written using then-current encryption methods such as PGP. Members of the group had discussions on politics, philosophy, computer science, cryptography, and mathematics. In 1993, Eric Hughes published the “A Cypherpunk’s Manifesto”, containing the key ideological tenets of the movement:

Cryptopunk and crypto-anarchism are distinct but related phenomena. The term “cypherpunks” was coined by hacker and programmer Jude Milhon to refer to a group of crypto-anarchists. The term “crypto-anarchists” first appeared in the article “Crypto Rebels” by Steven Levy in 1993.

Many works by Timothy May and other pioneers of cryptoanarchy were published in 2001 in “Cryptoanarchy, Cyber-States and Pirate Utopias”, edited by American philosopher Peter Ludlow. The authors of the book demonstrate the emergence of governance structures and ideals of political sovereignty in networked communities.

Ludlow views virtual communities as testing grounds for new societies and governance structures. Many experiments will fail, according to the philosopher, but given the networked world’s synergy, new types of societies and governance structures that outperform traditional ones cannot be ruled out.

What are the purposes?

How did crypto-anarchism affect cryptocurrency?

The importance of privacy, anonymous transactions, and cryptographic protection were all later implemented to some extent in cryptocurrencies.

In October 2008, Satoshi Nakamoto sent the famous white paper “Bitcoin: A Peer-to-Peer Electronic Cash System” to the mailing list.

The paper’s content attests to the influence of crypto-punks and crypto-anarchists. The bitcoin white paper quotes Adam Beck, a British cryptographer, and Wei Dai, a computer engineer. Bitcoin “represents the realization of Wei Dai’s b-money proposal … and Nick Szabo’s Bitgold proposal.” according to Nakamoto.

Way Day’s manifesto, in which he proposes the concept of b-money, begins, “I admire Tim May’s crypto-anarchism.” Following the publication of the article, Nakamoto continued his work and mined the genesis block of bitcoin on January 3, 2009.

The chief ideologue of crypto-anarchism, Timothy May, spoke late in life about how the cryptocurrency industry had actually betrayed the early ideals of the movement. In his interview in October 2018, he criticized the concept of legal and regulatory compliance. In his view, the spirit of crypto-anarchism is contradicted by the “draconian ‘know your customer’ rule,” the requirement to comply with anti-money laundering laws, passports, freezing accounts, and the requirement to report suspicious activity to the “local secret police.”

How is crypto-anarchism evolving?

Crypto-anarchism is not a single organized movement, but rather a set of values and viewpoints shared by a diverse group of individuals, including Wikileaks founder Julian Assange, former CIA and NSA employee Edward Snowden, programmers Cody Wilson and Amir Taaki, and many others. They all, in some way, embody the ideals of crypto-anarchism.

The examples

Paralelni Polis

The Paralelni Polis Center, located in a rented three-story former factory building in downtown Prague, was founded by members of the Czech art group Ztohoven.

According to the center’s founders, it is “a unique freedom think tank focusing on the promotion of digital freedom, cryptocurrencies, anonymization networks and free markets.

The Institute of Cryptoanarchy, a space for hackers and developers where tools for the unlimited distribution of information on the Internet and the creation of a parallel decentralized economy, cryptocurrencies, and other conditions for the development of a free society in the twenty-first century are available, occupies a key place in the infrastructure of Paralelni Polis.

Paper Hub, a co-working space for collaborative or individual project work, is part of Paralelni Polis. The co-working space, which combines art, social science, and technology, is open to freelancers, students, and startups.

The Free Republic of Liberland

A virtual state claiming an uninhabited disputed seven square kilometers of land on the Danube’s western bank between Croatia and Serbia.

The territory does not officially belong to either country as a result of the establishment of new state borders during the chaos years after the war in Croatia.

Vit Jedlicka, a Czech right-wing libertarian and activist, announced the establishment of an independent sovereign state on April 13, 2015. It has not been diplomatically recognized by UN member states.

The national motto of Liberland is “To live and let live,” and bitcoin is the official currency. The state has its own Wikipedia page, website, flag, and emblem. The government is a republic with elements of direct democracy.

Hundreds of people have obtained citizenship of Liberland and more than half a million have applied. According to the founder of the new state, Liberland needs maximum personal and economic freedom, which will be achieved with the help of the latest blockchain technology.