Authors: Jamie Bartlett
A quantity of Bitcoin is stored at a Bitcoin address, the key to which is a unique string of letters and numbers that can be kept on a website, desktop, mobile phone, or even a piece of paper. Every time someone sends a Bitcoin as payment, a record of the transaction is stored in something called the blockchain. Transactions are collected into blocks, with each block representing about 10 minutes’ worth of transactions. The blocks are ordered chronologically, and each includes a digital signature (a ‘hash’) of the previous block, which administers the ordering and guarantees that a new block can join the chain only if it starts from where the preceding one finishes. A copy of the blockchain record – a record every single transaction ever made – is maintained by everyone who has installed the Bitcoin software. To ensure everything is running as it should, the blockchains are constantly verified by the computers of everyone else using the software. The upshot of all this is that, at any point, the system knows exactly how many Bitcoins I have in my wallet, so they cannot be copied or spent twice. For the first time, ownership can be transferred, but never duplicated – and all without the assistance of a centrally controlled ledger. It is genius.
After Satoshi and Finney conducted the first ever transaction (and ironed out a few teething problems) Satoshi made it an open-source project, inviting others to help develop the code and the concept. More and more users joined the mailing list, and began to transfer Bitcoins to each other, always half expecting the system to break. But it never did.
The reason Bitcoin is so beloved by libertarians is because it takes
control of the money supply away from the state. Satoshi distrusted the global banking system, and saw his crypto-currency as a way to undermine it. He hated that bankers and governments held the key to the money supply and could manipulate it to their own ends. He even added an out-of-place line of text into the ‘genesis block’ (the very first bit of the blockchain – his transactions with Finney), which read: ‘The Times 03/Jan/2009 Chancellor on brink of second bailout for banks.’
To keep governments and central banks out of it, Satoshi placed a cap on the total number of Bitcoins that could ever be produced: 21 million. Although Bitcoins can be bought and sold with real-world currencies, new Bitcoins are not minted by any central authority. Instead anyone who dedicates his computing power to verifying the transactions in the blockchain competes to earn a very small amount of new Bitcoins each time they do so (this is called ‘mining’). As more Bitcoins are created (approximately 13 million have been created so far), the remaining Bitcoins require more computing power to mine.
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The last Bitcoin is expected to be mined in around 2140. But it did not stop there. Satoshi designed it to be a peer-to-peer, encrypted and quasi-anonymous system, which makes linking a Bitcoin transaction to a real-world person very difficult, thereby making collecting taxes and monitoring users extremely awkward. Even though the blockchain records the transactions, it doesn’t record who is behind them.
These features are precisely what Satoshi had in mind all along. While many of his posts to the cryptography mailing list discussed
the technicalities of the new currency, he also made his loyalties clear. In his early posts, Satoshi wrote on the list to Finney that Bitcoin was ‘very attractive to the libertarian viewpoint if we can explain it properly’. ‘You will not find a solution to political problems in cryptography,’ wrote one poster in response. ‘Yes,’ replied Satoshi, ‘but we can win a major battle in the arms race and gain a new territory of freedom for several years.’
Satoshi typed in his last post on the list in late 2010, and, like a true cypherpunk, promptly disappeared. Amir was right. At its core, Bitcoin is a political project. But it is also an open-source project, and for many, like the Bitcoin Foundation, its future is as a payment mechanism. For Amir, this is diluting the original cypherpunk vision. That’s why he’s building the Dark Wallet.
Happily ensconced in ‘Hackafou’, Amir describes the aims of his latest project to me. Ultimately, it’s about trying to make Bitcoins more anonymous and more trustworthy. The Dark Wallet will include a number of new features, which, if implemented correctly, will certainly cause more of a headache for ‘The System’. One of the key innovations is called ‘multi-signature’, where a Bitcoin payment can be released only if two of three parties sign it off. Another is called ‘trustless mixing’, a way of making Bitcoin payments harder to trace. It’s based on a project called CoinJoin, which jumbles up transactions that are happening at the same time, and then reroutes them to the final destination. Everyone
ends up with the right amount but no one knows who was sending what to whom. The third key innovation is called the ‘stealth address’. Dark Wallet generates a fake Bitcoin address as the recipient’s, meaning that it is a little harder to link a real person to their wallet. While not making Bitcoin transactions perfectly anonymous, this is a significant step forward. Amir anticipates that a lot of people will want to take advantage of the extra layers of security it offers.
As a computer programmer, Amir is exceptionally precise and exacting. But whenever I try to press him on politics, he is a flurry of anger and unconnected ideas. Every time he speaks about Bitcoins, conversation switches swiftly to all the problems he sees in the world: the surveillance state, corrupt governments and greedy corporations, oppression, environmental damage. His politics are best described as system-opposition: us the citizens versus them, the governments and corporations. ‘I just see problems and work out solutions,’ he tells me. And just like Tim May, he sees salvation in maths, not man-made laws: ‘Bitcoin is a currency based on mathematics,’ he says, ‘the purest kind. And it creates the truest market, peer to peer with no corrupt or controlling third parties.’ In that sense, he sees Dark Wallet as a strike against the inefficient, useless governments in the world: ‘A bunch of gangsters running a sham democracy.’ There is a utopian faith in the certainty of maths and physics to resolve society’s problems, although with little thought given to precisely how. After all, I ask him, don’t governments serve some useful purposes? What about collective healthcare, education, help for those at the bottom?
Amir suddenly stops. ‘Do you want to play a computer game?’ he asks. He loads up something called
Mirror’s Edge
. The story is set in
a near-future society in which a dictatorial state keeps the peace through a toxic mix of surveillance and sterile hyperconsumerism. The docile population prefers peace to freedom, except for a handful of rebels who rely on ‘runners’ to deliver messages to the underground resistance. As a runner, your job is to scamper across the tops of building, scurry down backalleys, and disappear into the shadows, evading the state police. ‘I love games,’ Amir says. ‘They’re how children learn about politics.’ He plays with his face impossibly close to the screen, head slightly cocked, half jumping out of his chair every time his online persona does. ‘Training,’ he says, chuckling. As he ducks and weaves he continues the thread we’d left off before he started the game: ‘It’s true – people are going to suffer. Yes, that’s sad. But that’s just the way it is.’
Bitcoin is the means to an end for cypherpunks like Amir, just as it had been for Tim May. That end amounts to free forms of communication and transactions between individuals that cannot be censored or monitored. ‘Currencies are just the beginning,’ Amir tells me. ‘The real genius of blockchain is that it is going to help us create a decentralised net that no one can censor. This is much bigger than just Bitcoin. We’re going to transform the entire internet.’
‘What do you mean?’ I ask.
‘Well, at the moment your Facebook data isn’t really controlled by you: it’s hosted on Mark Zuckerberg’s servers. Facebook administrators can do anything they like with it, because they own the servers,
and so they own your data. It’s not really free, because it’s centralised. A social media platform built using blockchain would be different. Your posts would become part of the public blockchain record, and every user of the platform would have their own copy. Everything could be done anonymously, and censorship would be close to impossible. No one can shut it down, because no one owns it.’
There are several new projects under way that are trying to do this. One is a social media platform called Twister. Miguel Freitas is Twister’s chief developer. Miguel worked for several straight months – also unpaid, just as Zimmermann did when working on PGP – to convert the blockchain model into a social media platform after the British Prime Minister, David Cameron, admitted his government considered shutting down Twitter during the 2011 London riots. ‘I tried searching for peer-to-peer microblogging alternatives, but I couldn’t find any,’ he told me. ‘The internet alone won’t help information flow if all the power is in the hands of Facebook and friends.’
Twister is only one of many next-generation systems to guarantee free expression and privacy designed for the mass market rather than the specialist: each user-friendly, cheap and efficient. Jitsi is a free, secure, open-source voice, video-conferencing and instant-messaging application which started as a student project at the University of Strasbourg. Jabber, another instant-messaging service, is encrypted with industry-standard Secure Sockets Layer, run by volunteers and physically hosted in a secure data centre. Phil Zimmermann is currently working on a project called Darkmail, an automatically end-to-end encrypted email service.
Today there are hundreds of people like Amir and Miguel
working on ingenious ways of keeping online secrets or preventing censorship, often in their own time, and frequently crowdfunded by users sympathetic to the cause. One is Smári McCarthy. Smári is unashamedly geeky: a computer whizz and founding member of the radical Icelandic Pirate Party. He used to work with Julian Assange in the early days of WikiLeaks. Smári isn’t really a cypherpunk – he resists any association with Ayn Rand’s philosophy – but he does believe that privacy online is a fundamental right, and worries about state surveillance of the net. He also believes that crypto is a key part of a political project. He wants you to encrypt all your emails with PGP, even (or especially) those you send to friends and family members. The reason, he explains, is to provide ‘cover traffic’ for those who do need to keep things secret. If everyone is using it, no one is: the dissidents will disappear in the crowd. Smári has scrutinised current National Security Agency (NSA) programmes and the overall security budget of the US government, and calculated it currently costs 13 cents a day to spy on every internet user in the world. He hopes that default encryption services like his will push that closer to $10,000. It’s not to stop people being spied on – he agrees that’s sometimes necessary – but rather to drastically limit it. At this inflated cost he estimates the US government would only be able to afford to keep tabs on around 30,000 people. ‘If we can’t trust the government to do only those things that are necessary and proportionate – and we can’t – then economics can force them to.’ But the reason everyone doesn’t use encryption is because it’s complicated and time-consuming to set up, he explains. Gmail, by contrast, is supremely sleek, simple and fast. So Smári and two colleagues decided to
develop their own, easy-to-use, encrypted email system – and raised $160,000 in August 2013 from supporters on Indiegogo to do so. It’s called Mailpile. ‘It will be feature-complete, and easy to use,’ Smári explains, opening his laptop to give me a sneak preview. It certainly looks good.
In 2013, documents released by Edward Snowden alleged that the NSA, working with Britain’s GCHQ and others, was – among other things – tapping seabed ‘backbone’ internet cables, installing back-door access to private company servers and working to crack (and weaken) encryption standards, often without much legal basis, let alone a public debate. Fearful of government surveillance, ordinary people are taking measures to make themselves more secure online, and using software designed by people like Smári to help them.
The cypherpunk message isn’t going unheeded: more and more people are starting to adopt encryption technology – the demand for services like Mailpile, PGP or Jitsi is growing: the daily adoption rate of PGP keys tripled in the months following Snowden’s revelations. In the mid-1990s, the cypherpunks frequently warned of the impending ‘surveillance state’. It turned out they were right all along. And today cypherpunk is going mainstream – thanks to a tweet.
In 2012, the Australian parliament passed a Cybercrime Legislation Amendment Bill, which gave the government more power to monitor online communications, in the face of opposition from civil liberties groups. In the immediate aftermath, one user posted a tweet on the
timeline of the Australian privacy activist Asher Wolf: ‘ain’t no party like a crypto apps install party’. A few minutes later Wolf replied: ‘I want a HUGE Melbourne crypto-party! BYO devices, beer & music. Let’s set a time and place :) Who’s in?’ She later recalled that ‘by the time I’d had a cup of tea after tweeting the idea – I came back to the laptop and found Berlin, Canberra and Cascadia had already set dates. By the next morning, half a dozen more countries were calling for crypto-parties.’
It is second nature to people like Amir, but most people don’t know how to browse the net anonymously using Tor, how to pay with Bitcoin, or how to send a message encrypted with PGP. A crypto-party is a small workshop to show them how. It’s typically twenty or so people being walked through the basics of online security by volunteer experts, free to attend and often held in someone’s home, at a university, or even a pub. Wolf’s tweet sparked a global, grass-roots movement.
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There is even a free crypto-party handbook, which was crowdsourced in less than twenty-four hours by activists all over the world, and continues to be publicly edited and updated.