DL Seminar | The Unknown History of the Utopians, Anarchists, Technologists who Built Cryptocurrency
  • Digital Life Initiative

DL Seminar | The Unknown History of Utopians, Anarchists, & Technologists who Built Cryptocurrency

Updated: Jan 8, 2019

By Oluseyi Sonaiya | MBA Student | Cornell Tech

Illustration by Gary Zamchick

DL Seminar Speaker Finn Brunton

In November 15, 2018, the Digital Life Seminar series at Cornell Tech played host to Prof. Finn Brunton (pictured above), Assistant Professor of Media, Culture, and Communication at New York University. He is the author of Spam: A Shadow History of the Internet; co-author of Obfuscation: A User’s Guide for Privacy and Protest, with DLI Director Helen Nissenbaum; and has a forthcoming book, Digital Cash: The Unknown History of the Anarchists, Technologists, and Utopians Who Created Cryptocurrency. His talk was titled, “Digital Cash,” and began with a clarification of exactly what that meant.

Prof. Brunton is trained as a historian of science and technology, and it was utterly fascinating to examine the present excitement and expectations around cryptocurrency through the lens of the ambitions that led to it—a “pre-history of Bitcoin and cryptocurrency,” as he put it— through four sets of stories. Warming up in the introduction of his talk, Dr. Brunton makes it clear that, “today we’re talking about digital cash, and not electronic money.” Referencing Margaret Atwood’s seminal novel, The Handmaiden’s Tale, Brunton argues that a fact often overlooked about the book is that it is a dystopian fiction that is partly about electronic money. He points out that electronic banking is what makes it possible to identify and seize assets owned by women, contributing to the rise of the misogynistic republic of Gilead. Turning from the novel to the contemporary television adaptation, he shows a scene where Offred is shopping and sees oranges for the first time in years, longing for one, but can not buy any because she does not have access to money; rather, she receives coupons that permit her only to purchase specific goods. He cites Ms. Atwood’s extensive writings, after the book’s publication, on the dangers of electronic and data-based credit systems, and the possibility that they could be used to exclude or coerce people from particular actions.

Switching from the writings of Margaret Atwood to the earlier ones of computer scientist Martin Greenberger, in a 1964 essay titled The Computers of Tomorrow, Brunton zeroes in on Greenberger’s predictions for how computing will revolutionize commerce, and in particular a seeming aside on how computers will “displace miscellaneous thieves who prey on money,” because the system will “police its own operation,” a degree of confidence in technological utopianism that was characteristic of the age but which experience has by now soured the masses on. Driving home the point, Brunton then cites the 1968 congressional testimony of the late Paul Armer, computer scientist and former RAND Corporation engineer, on the task set before his team to devise the optimal surveillance system, and their arrival at a mandatory, electronic funds transfer system as the solution. In particular, Armer was concerned about live, real-time decision-making by the system as to whether or not the individual would have funds released to complete a transaction, such that the record of prior transactions could trigger restrictions that might then prohibit the release of funds to purchase a particular book, for example, or fresh fruits and vegetables. “Offred,” Brunton intones, “can not purchase her oranges.”

The testimony of Paul Armer, in particular, caught the attention of many people working in computer science at the time, and led to David Chaum coining the term “digital cash” and articulating its difference from electronic money: it must be a digital object that is capable of

authenticating itself, without recourse to any central system, without authenticating its user.

Chaum was not interested in creating digital money as a wholesale alternative to existing, fiat currency and paper notes, but rather in digital cash as a format for existing money, valid “in hand,” the way a bank note is, unattached to the holder. In his system, users would visit an ATM, but rather than withdrawing funds as bank notes, would insert a digital cash card and have funds deposited “into” the card. Digital cash is unconnected to the user, lacks a transaction record of use.

In his own testimony to congress, in the 1990s, Chaum argued that, if digital cash is not created in this fashion, then “we will not be customers in a marketplace. We will be electronically tagged animals in feed lots.” Brunton argues this is essentially what happened, but for a while it seemed like Chaum’s ideas would come to fruition. He shows a picture of a VISA Cash Card, not a debit card, from a time when banks were experimenting with digital cash as a genuine alternate vehicle for existing money. Those systems eventually failed, though, which Chaum surmised as the ask being too big. Said Chaum, “I was asking the world to change the way it did things so they were would be perfect privacy, and the world found that the cost was simply too high.” Pausing briefly, Brunton then adds, “and the sacrifices involved in losing access to all that sweet, sweet transaction data were too much to ask!”

This failure concludes the first set of stories, but, as many failures do, births the next set of ambitions. Having set the scene and detailed a far more radical vision of the future than the one we inherited, Brunton takes us through the exploits of the CypherPunks, early cryptoanarchists who reacted to the collapse of Chaum’s digital cash initiative by proposing an alternate vision for how society works. Tim May, one of the most committed of the group, and who wrote The Crypto Anarchist Manifesto, employed an email signature that summarized their objectives: “encryption, digital money, anonymous networks, digital pseudonyms, zero knowledge, reputations, information markets, black markets, collapse of governments.”

If Chaum’s ask was too large, the Cryptoanarchists’ goal of reworking society itself was even larger. Their ambition was to develop digital money not as a format for existing currency, but as a wholesale alternative to the existing commercial order. And while it hasn’t come to pass yet, this vision inspired both The Silk Road, the first modern darknet market, and WikiLeaks. Ironically, of all things, the greatest technical risk to the cryptoanarchist vision turned out to be... spam, due to the inability to filter messages on either content or sender.

The spam problem spurred a British cryptographer and hacker named Adam Back to develop a Partial Hash Collision System for demanding a small, measurable about of work as “postage” for a message that gets sent. He calls it HashCash, devising a system that is “arbitrarily expensive to compute,” and sees applications for solving denial of service attack issues, and eventually as a minting mechanisms for Wei Dai’s B-Money Electronic Cash Protocol. Dai is interested in developing a new banking system, allowing you to not just purchase tokens on a black market but trust those tokens not to be counterfeit, and begins to develop a wholly digital bank which relies on the HashCash system, often referred to as proof of work.

Brunton shows an email from Satoshi Nakamoto, the pseudonym of the person or persons who developed Bitcoin, to Wei Dai, checking to ensure an accurate bibliographic citation!

The histories of digital cash, electronic money, partial hash collisions as proof of work, artificial scarcity, cryptography as a means for not only encrypting transactions but underwriting the transactions themselves with measures of scarcity, and more begin to converge, as Dr. Brunton weaves his tale. Bit Gold. Reusable Proofs of Work. Smart Contracts. The Extropians, reputation coins, idea coupons, the Singularity, cryo-stasis, and a digital asset class available to you upon resurrection... it gets weird and wonderful (e.g. the cryonics.org sticker proclaiming, “Dead? We can help!”), and shows how we got to where we are, but also some of where we might go, still.

As Dr. Brunton argues in his opening, “a technology doesn't fall out of the cargo bay of a UFO. Everything we use, wear, touch, inhabit, ingest is the culmination of a deep pre-history of decisions, prior technologies, demands, agendas, investments, dreams and fantasies, social pressures, and arrangements of wealth, power, influence, and other needful things.

“A technology comes into being under certain conditions of possibility, starting with physics and chemistry, through history and economics, and all the way down to the contingencies—a day, a person, a coincidence.” On this day he drew on philosophy, political ideology and

activism, finance, technology, and even thoughts about immortality to illustrate the past, present, and possible future of digital cash and electronic monies.

My mind, for one, was blown.



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