Cypherpunk

A cypherpunk is an activist who advocates the widespread use of strong cryptography and privacy-enhancing technologies as a way to protect individual freedom from surveillance by governments and corporations. The term refers in particular to a loose movement that formed around an email list founded in 1992 in the San Francisco Bay Area by Eric Hughes, Timothy C. May and John Gilmore. Its members argued that privacy should be secured by writing and distributing code, not by asking permission from authorities.

The cypherpunk movement shaped the early internet's debates on encryption and anonymity, and it produced many of the ideas that later came together in Bitcoin, including anonymous digital cash, proof of work and decentralized money. Satoshi Nakamoto announced Bitcoin in 2008 on a cryptography mailing list that drew many of the same participants. The name is a play on "cipher" and the "cyberpunk" genre of science fiction.

In the early 1990s, a group of programmers, mathematicians and privacy campaigners became convinced that the internet would let governments and companies watch everything people did. Rather than campaigning for laws to protect privacy, they decided to build tools that would make privacy possible regardless of the law.

Their motto was, in effect, "cypherpunks write code". They worked on ways to send messages only the recipient could read, to stay anonymous online and to pay for things without a bank knowing. Many of those ideas failed or stayed niche, but some, such as encrypted messaging and digital cash that no one controls, went on to change the world.

The movement drew on earlier work by cryptographers such as David Chaum, whose 1980s research on anonymous electronic payments led to the company DigiCash. Timothy May circulated "The Crypto Anarchist Manifesto" in 1988, predicting that cryptography would transform commerce and government. After the mailing list began in 1992, Eric Hughes published "A Cypherpunk's Manifesto" in 1993, declaring that "privacy is necessary for an open society in the electronic age". The list was most active through the 1990s, at a time when the US government restricted the export of strong encryption and proposed the Clipper chip, a scheme for encryption with a government back door that was eventually abandoned. Phil Zimmermann's release of the PGP encryption program in 1991, and the government investigation that followed, became a rallying point for the movement.

• Privacy through technology. Individuals should protect their communications and transactions with encryption rather than rely on laws or institutions, a principle behind modern end-to-end encryption.
• Anonymity. Tools such as anonymous remailers, and later onion routing, should let people speak and transact without revealing their identity.
• Digital cash. Money should be able to move electronically with the privacy of physical cash.
• Open code. Software should be published so anyone can inspect, use and improve it, an early form of the open source ethic.
• Distrust of central authority. Many members held libertarian views, and some, like May, embraced "crypto anarchy".

Several cypherpunks proposed systems that foreshadowed Bitcoin. Adam Back's Hashcash, published in 1997, used proof of work to fight email spam. Wei Dai's b-money proposal of 1998 described a decentralized digital currency, and Nick Szabo's "bit gold" design outlined a similar scheme. Hal Finney built a reusable proof-of-work system in 2004 and later became the recipient of the first bitcoin transaction from Satoshi Nakamoto in January 2009. The Bitcoin white paper cites both Back and Dai. Bitcoin combined these ideas with a public ledger and a consensus system that did not depend on any trusted party.

Cypherpunk ideas live on in encrypted messaging, the Tor network, privacy coins, censorship-resistant blockchains and the self-custody ethos of many Bitcoin users. Julian Assange, who founded WikiLeaks, was an active participant in the mailing list. Critics argue that the movement underestimated the social costs of anonymity, which can shield crime and money laundering, and that its technologies have often been adopted by large companies and governments rather than individuals. Some early cypherpunks have themselves criticised parts of today's crypto industry as speculative and far from the movement's privacy goals. The tension between financial privacy and regulation, discussed under Blockchain's Privacy Paradox, remains a central policy debate.