Mining the Cyphernomicon for Gold: Quotes and Notes

Post #1 • c0mmando Created: 2025-02-10 18:08 Updated: 2025-02-10 18:08

Quotes

“Freedom is, practically, given as much (or more) by the tools we can build to protect it, as it is by our ability to convince others who violently disagree with us not to attack us. On the Internet we have tools like anon remailers and PGP that give us a great deal of freedom from coercion even in the midst of censors. Thus, these tools piss off fans of centralized information control, the defenders of the status quo, like nothing else on the Internet.”

“If I withhold my capital from some country or enterprise I am not threatening to kill anyone. When a “Democratic State” decides to do something, it does so with armed men. If you don’t obey, they tend to shoot… If technological change enhances the powers of individuals, their power is enhanced no matter what the government does.”

“If the collective is weakened and the individual strengthened by the fact that I have the power of cheap guns, cars, computers, telecoms, and crypto then the collective has been weakened and we should ease the transition to a society based on voluntary rather than coerced interaction. Unless you can figure out a new, improved way of controlling others; you have no choice.”

” it’s very hard to coordinate dozens of free-thinking, opinionated, smart people, especially when there’s no whip hand, no financial incentive, no way to force them into line”

The changes I want won’t come through a series of ads that are just fingers in the dike. (More cynically, Americans are getting the government they’ve been squealing for. My interest is in bypassing their avarice and repression, not in changing their minds.)”

11.3.4. “Why would the government monitor my communications?”

“Because of economics and political stability… You can build computers and monitoring devices in secret, deploy them in secret, and listen to everything. To listen to everything with bludgeons and pharmaceuticals would not only cost more in labor and equipment, but also engender a radicalizing backlash to an actual police state.”
— Eric Hughes, 1994-01-26

Systems like Digital Telephony and Clipper make it much too easy for governments to routinely monitor their citizens, using automated technology that requires drastically less human involvement than previous police states required.

11.3.5. “How much surveillance is actually being done today?”

FBI and Law Enforcement Surveillance Activities

The FBI kept records of meetings between American companies and Nazi interests, and may have used these records during and after the war to pressure companies.

NSA and Security Agency Surveillance Activities

Collecting economic intelligence.
In WWII, the Economic Warfare Council (renamed Board of Economic Warfare) kept tabs on shipments of petroleum and other products.

MINARET

Code word for NSA “watch list” material (intercepts).
SIGINT OPERATION MINARET : Originally, watch list material was “TOP SECRET HANDLE VIA COMINT CHANNELS ONLY UMBRA GAMMA”.
NSA targeting is done primarily via a list called Intelligence Guidelines for COMINT Priorities (IGCP), initiated around 1966.

Revelations following the Pentagon Papers security leak had picked up private communications related to the Papers. This was late 1963, early 1964, around the time UB was going. The main antenna system for intercepting ASCII from un-TEMPESTed terminals and PCs can pick up signals through walls up to a foot thick (or more, considering how such impulses bounce around).

Joint FBI/NSA Surveillance Activities

Operation Shamrock : A tie between NSA and FBI since 1945, although there had been earlier intercepts too.
COINTELPRO : Targeting dissidents and radicals.
8/0/45: Operation Shamrock begins as a sub rosa effort to continue the monitoring arrangements of WWII.
ITT Communications and RCA Communications agreed to turn over all cables, with direct hookups made for careful monitoring by the ASA.

Key Meetings and Developments

12/16/47 : Meeting between Sosthenes Behn of ITT, General Ingles of RCA, and Sec. of Defense James Forrestal to discuss Operation Shamrock and arrange exemptions from prosecution.
0/0/63 : Operation Shamrock enters a new phase as RCA Global switches to computerized operation, coinciding with Harvest at NSA and the start of UB/Severn operations.
1/6/67 : Hoover officially terminates “black bag” operations, concerned about blowback.

Plot Twist

This may have motivated NSA and UB/Severn to pursue other avenues, such as the use of criminals as cutouts, paralleling the “Plumbers Unit” used by the White House.

10/1/73

AG Elliot Richardson orders FBI and SS to stop requesting NSA surveillance material. NSA agreed to stop providing this but didn’t inform Richardson about Shamrock or Minaret. Events of this year marked the end of Minaret.

3/4/77

The Justice Department recommends against prosecution of any NSA or FBI personnel over Operations Shamrock and Minaret, deciding that NSCID No. 9 (aka No. 6) gave NSA sufficient leeway.

Operation Shamrock - Details

8/0/45 : Operation Shamrock begins as a sub rosa effort to continue the monitoring arrangements of WWII.
ITT Communications and RCA Communications agreed to turn over all cables.
12/16/47 : Meeting to discuss Operation Shamrock.
0/0/63 : Operation Shamrock enters a new phase as RCA Global switches to computerized operation.

Additional Developments

8/18/66 : New analysis site in New York for Operation Shamrock.
5/15/75 : Operation Shamrock officially terminated.
6/30/76 : 175-page report on Justice Dept. investigation of Shamrock and Minaret, classified TOP SECRET UMBRA.

Links to Operation Ultra Black

Many links exist, from secrecy, compartmentalization, and illegality to the methods used and the subversion of government power. “Shamrock was blown… Ultra Black burrowed even deeper.”

NSA, FBI, and Surveillance of Cuban Sympathizers

“Watch list” used.
Were there links to Meyer Lansky and Trafficante via the JFK-Mafia connection?
Various Watergate break-in connections (Cubans used).

NSA, FBI, and Dissenters

10/20/67 : NSA is asked to begin collecting information related to civil disturbances, war protesters, etc.
Army Intelligence, Secret Service, CIA, FBI, and DIA were all involved. This arguably continues, given the success of the FBI and Secret Service in heading off major acts of terrorism and attempted assassinations.

7/19/66 : Hoover unofficially terminates black bag operations.
1/6/67 : Hoover officially terminates black bag operations, fearing blowback and concerned about his place in history.
6/20/69 : Tom C. Huston recommends increased intelligence activity on dissent in a memo to NSA, CIA, DIA, and FBI. This later becomes the basis of the Huston Plan.
6/5/70 : Meeting at the White House to prepare for the Huston Plan; Interagency Committee on Intelligence (Ad Hoc), ICI, includes Nixon, Huston, Ehrlichman, Haldeman, Noel Gayler of NSA, Richard Helms of CIA, J. Edgar Hoover of FBI, and Donald V. Bennett of DIA. William Sullivan of FBI is named to head ICI.

NSA enthusiastically supported ICI, seeking increased surreptitious entries and elimination of legal restrictions on domestic surveillance. Recipients were to be on a “Bigot List” with even more security than traditional TOP SECRET, HANDLE VIA COMINT CHANNELS ONLY.

7/23/70 : Huston Plan circulated, a 43-page document entitled “Domestic Intelligence Gathering Plan: Analysis and Strategy,” urging increased surreptitious entries (for codes, ciphers, plans, membership lists) and targeting of embassies.
7/27/70 : Huston Plan cancelled due to pressure from Attorney General John Mitchell and perhaps Hoover. Huston was demoted and resigned a year later, but the Plan was not really dead. Huston’s mistake may have been being young and vocal, making the report too visible and not deniable enough.
12/3/70 : Intelligence Evaluation Committee (IEC) meets (Son-of-Huston Plan). John Dean arranged it in fall of ‘70. Robert C. Mardian, Assistant AG for Internal Security, headed up the IEC, which included Benson Buffham of NSA/PROD, James Jesus Angleton of CIA, George Moore from FBI, and Col. John Downie from DOD. They essentially adopted all of the Huston Plan.
1/26/71 : NSA issues “NSA Contribution to Domestic Intelligence” as part of IEC, increasing the scope of surveillance related to drugs (via BNDD and FBI) and foreign nationals, with “no indication of origin” on generated material and full compartmentalization to ensure compliance.
8/4/71 : G. Gordon Liddy attends IEC meeting to get them to investigate leaks of the Pentagon Papers, creating a channel from NSA/PROD to the Plumber’s Unit in the White House, bypassing other agencies.
6/7/73 : The New York Times reveals details of the Huston Plan, with the full text published, jeopardizing and ultimately derailing trials of the Weatherman.
10/1/73 : AG Elliot Richardson orders FBI and SS to stop requesting NSA surveillance material. NSA agreed to stop providing this but didn’t inform Richardson about Shamrock or Minaret. Events of this year marked the end of Minaret.

FINCEN, IRS, and Other Economic Surveillance

Set up in Arlington as a group to monitor the flows of money and information. Eventually, these groups will see the need to actively hack into computer systems used by various groups that are under investigation.
Ties to the death of Alan Standorf? (Vint Hill)
Casolaro, Riconosciutto.

11.4.8. Why are so many computer service, telecom, and credit agency companies located near U.S. intelligence agency sites?

For example, there is a cluster of telecom and credit reporting agencies (e.g., TRW Credit, TransUnion, etc.) in and around the McLean/Langley area of Northern Virginia, including:

Herndon
Vienna
Tysons Corner
Chantilly

Similarly, various computer network providers, such as UUCP and America Online, are also located in this region.

Perspectives on the Proximity

Least Conspiratorial View :
The companies are located near Washington, D.C., for various regulatory, lobbying, and business reasons.
Most Conspiratorial View :
Their proximity ensures that intelligence agencies have easy access to communications, direct landlines, etc.

Additional Considerations

Credit reporting agencies may need to clear identities that are fabricated for intelligence agencies, such as those involved in the Witness Protection Program (WitSec). The three major credit agencies must be complicit in these creations, as the “ghosts” show up immediately when past records are cross-correlated.

As Paul Ferguson, a Cypherpunk and manager at US Sprint, puts it:

“We’re located in Herndon, Virginia, right across the street from Dulles Airport and a hop, skip & jump down the street from the new NRO office…,-)”
— P.F., 1994-08-18

11.5. Surveillance in Other Countries

11.5.1. Overlap with Earlier Discussions

Partly, this section overlaps with the earlier discussion of crypto laws in other countries.

11.5.2. Major Non-U.S. Surveillance Organizations

BND – Bundesnachrichtendienst
German security service.
- BND is seeking a constitutional amendment but may not need it, as the mere call for it has revealed existing practices.
- Often referred to as a “vacuum cleaner in the ether.”
- Historical context: Gehlen and Eastern Front Intelligence, based in Pullach, outside Munich.
- They have always sought approval for domestic spying, which is seen as a key to power.
Bundeskriminalamt (BKA)
West German FBI, headquartered in Wiesbaden.
- A bomb exploded there during examination, killing an officer (related to Pan Am/Lockerbie/PFLP-GC).
- The sign features double black eagles (back to back).
BVD – Binnenlandse Veiligheids Dienst
Dutch Internal Security Service.
SDECE
French intelligence (foreign intelligence), linked to the Greenpeace ship bombing in New Zealand.
- SDECE had connections to the October Surprise, with some French agents involved in negotiations, arms shipments out of Marseilles and Toulon, and meetings with Russbacher and others.
DST – Direction de la Surveillance du Territoire
Counterespionage arm of France, parallel to the FBI.
DSGE – Direction Générale de la Sécurité Extérieure
Provides draft deferments for those who deliver stolen information.
Sweden – Forsvarets Radioanstalt
(“Radio Agency of the Defense”)
- Cracked German communications between occupied Norway and occupied Denmark, notably by Beurling, using only paper and pencil.
Mossad, LAKAM – Israel
- HQ in Tel Aviv, near the HQ of AMAN (military intelligence).
  - Note: Does HQ move around a lot?
- LAKAM (sp?) is a super-secret Israeli intelligence agency that was shown the PROMIS software in 1983.
- They learned of Pakistan’s success in building an atomic bomb and took action against the Pakistani leadership, including the destruction of a plane carrying President Zia and some U.S. experts.
- Mossad was aware of DIA and CIA involvement in BCCI financing of Pakistani atomic bomb efforts and links to arms dealers that facilitated the acquisition of triggers and other components.
- Revelations by Vanunu were intended to intimidate the Arab and Muslim world and to signal that the killing of President Zia would be the fate of any Pakistani leader who continued the nuclear program.

1.6. Surveillance Methods and Technology

11.6.1. Speculative Nature of the Discussion

(Some of this gets speculative and may not be to everyone’s liking.)

11.6.2. What is TEMPEST and What’s Its Importance?

TEMPEST apparently stands for nothing; it is not an acronym, but rather a name. The all-caps spelling is the standard format.

Definition : TEMPEST refers to RF (radio frequency) emissions and a set of specifications for compliance.
Related Concept : Van Eyck (or Van Eck) radiation.

Key Concerns

The primary concern is with CRTs (cathode ray tubes), but it also applies to:
- LCD panels
- Internal circuitry of PCs, workstations, or terminals.

Notable Observation

“Many LCD screens can be read at a distance. The signal is not as strong as that from the worst VDUs, but it is still considerable. I have demonstrated attacks on Zenith laptops at 10 meters or so with an ESL 400 monitoring receiver and a 4m dipole antenna; with a more modern receiver, a directional antenna, and a quiet RF environment, there is no reason why 100 meters should be impossible.”
— Ross Anderson, Tempest Attacks on Notebook Computers ??? , comp.security.misc, 1994-08-31

16.2. SUMMARY: Crypto Anarchy

16.2.1. Main Points

“…when you want to smash the State, everything looks like a hammer.”
Strong crypto serves as the “building material” for cyberspace (making the walls, the support beams, the locks).

16.2.2. Connections to Other Sections

This section ties all the other sections together.

16.2.3. Where to Find Additional Information

Again, almost nothing has been written on this topic. Notable authors include Vinge, Friedman, Rand, etc.

16.2.4. Miscellaneous Comments

This is a very long section and may be confusing to many.

16.3. Introduction

16.3.1. The Revolution Will Be Digitized

“The revolution will not be televised. The revolution will, however, be digitized.”
Welcome to the New Underworld Order! (a term borrowed from writer Claire Sterling.)

16.3.2. Do the Views Here Express the Views of the Cypherpunks as a Whole?

This section is controversial. Hence, there are more warnings than usual about being careful not to confuse these comments with the beliefs of all or even most Cypherpunks.

In fairness, libertarianism is undeniably the most represented ideology on the list, as it is in much of the Net. The reasons for this have been extensively debated over the years, but it’s a fact.
If other major ideologies exist, they are fairly hidden on the Cypherpunks list.
Yes, some quasi-socialist views are occasionally presented. My friend Dave Mandl, for example, has at times argued for a less anarcho-capitalist view. However, I think our views are actually fairly similar; he just uses different language and perceives a greater difference than there actually is (insert smiley here).

Several Cypherpunks who have considered the issues of crypto anarchy have been disturbed by the seemingly inevitable conclusions, such as:

Markets for corporate information
Assassination becoming more liquid
Data havens
Espionage made much easier

So, take this section with these caveats. Some of the things I think are inevitable, and in many cases positive, will be repugnant to some. For example:

The end of welfare
The end of subsidies for inner-city breeders
The dismantling of the national security state through digital espionage, information markets, and selective assassinations

These are not things that everyone will find comforting. Some may even label them illegal, seditious, and dangerous. So be it.

16.3.3. What are the Ideologies of Cypherpunks?

I mentioned this in an earlier section, but now that I’m discussing “crypto anarchy” in detail, it’s good to recap some points about the ideology of Cypherpunks.

This area is fraught with dangers, as many Cypherpunks have differing views on what’s important.
Two main foci for Cypherpunks:
- Personal privacy in an increasingly watchful society
- Undermining of states and governments

Of those who speak up, most seem to lean toward the libertarian position, often explicitly so. This correlation is not surprising, as libertarians are often found on the Internet.

Socialists and Communitarians should speak up more than they have. Dave Mandl is the only one I can recall who has given a coherent summary of his views.

My Personal Outlook on Laws and Ideology

(Obviously also scattered throughout this document.)

Non-coercion Principle : Avoid initiation of physical aggression.
“To each his own” (a “neo-Calvinist” perspective of letting each person pick his path and not interfering).
I support no law which can easily be circumvented. (Traffic laws are a counterexample; I generally agree with basic traffic laws.)
I support no law I would not personally be willing to enforce and punish. This includes laws against murder, rape, theft, etc., but not “victimless crimes,” not drug laws, and not 99.9998% of the laws on the books.

Crypto anarchy is, in a sense, a throwback to the pre-state days of individual choice about which laws to follow. The community exerted a strong force.

With strong crypto (“fortress crypto,” in law enforcement terms), only an intrusive police state can stop people from accessing “illegal” sites, communicating with others, or using “unapproved” services.

For example, consider the “credit data haven” that keeps any and all financial records—rent problems from 1975, bankruptcy proceedings from 1983, divorce settlements, results from private investigators, etc. In the U.S., many such records

16.4. The Crypto Anarchist Manifesto

16.4.1. Unchanged Since Its Writing in Mid-1988

This manifesto has remained unchanged since its writing in mid-1988, except for my email address.

There are some changes I’d make, but…
It was written quickly and in a style that deliberately mimics what I remembered of the “Communist Manifesto” (for ironic reasons).
Still, I’m proud that more than six years ago I correctly identified some major points that Cypherpunks have helped to make happen: remailers, anonymous communication, reputation-based systems, etc.

For history’s sake, here it is:

16.4.2. The Crypto Anarchist Manifesto

Timothy C. May
tcmay@netcom.com

A specter is haunting the modern world, the specter of crypto anarchy.

Computer technology is on the verge of providing the ability for individuals and groups to communicate and interact with each other in a totally anonymous manner. Two persons may exchange messages, conduct business, and negotiate electronic contracts without ever knowing the True Name or legal identity of the other. Interactions over networks will be untraceable, via extensive re-routing of encrypted packets and tamper-proof boxes which implement cryptographic protocols with nearly perfect assurance against any tampering. Reputations will be of central importance, far more important in dealings than even the credit ratings of today. These developments will completely alter the nature of government regulation, the ability to tax and control economic interactions, the ability to keep information secret, and will even change the nature of trust and reputation.

The technology for this revolution—and it surely will be both a social and economic revolution—has existed in theory for the past decade. The methods are based upon public-key encryption, zero-knowledge interactive proof systems, and various software protocols for interaction, authentication, and verification. The focus has until now been on academic conferences in Europe and the U.S., conferences monitored closely by the National Security Agency. But only recently have computer networks and personal computers attained sufficient speed to make these ideas practically realizable. The next ten years will bring enough additional speed to make these ideas economically feasible and essentially unstoppable. High-speed networks, ISDN, tamper-proof boxes, smart cards, satellites, Ku-band transmitters, multi-MIPS personal computers, and encryption chips now under development will be some of the enabling technologies.

The State will, of course, try to slow or halt the spread of this technology, citing national security concerns, the use of the technology by drug dealers and tax evaders, and fears of societal disintegration. Many of these concerns will be valid; crypto anarchy will allow national secrets to be traded freely and will enable illicit and stolen materials to be exchanged. An anonymous computerized market will even make possible abhorrent markets for assassinations and extortion. Various criminal and foreign elements will be active users of CryptoNet. But this will not halt the spread of crypto anarchy.

Just as the technology of printing altered and reduced the power of medieval guilds and the social power structure, so too will cryptologic methods fundamentally change the nature of corporations and government interference in economic transactions. Combined with emerging information markets, crypto anarchy will create a liquid market for any and all material that can be put into words and pictures.

And just as a seemingly minor invention like barbed wire made possible the fencing-off of vast ranches and farms, thus altering forever the concepts of land and property rights in the frontier West

16.5. Changes are Coming

16.5.1. Technology is Dramatically Altering the Nature of Governments

It may sound like new-age trendiness, but strong crypto is “technological empowerment.” It literally gives power to individuals. Like Sam Colt, it makes them equal.

“Politics has never given anyone lasting freedom, and it never will. Anything gained through politics will be lost again as soon as the society feels threatened. If most Americans have never been oppressed by the government (aside from an annual mugging), it is because most of them have never done anything to threaten the government’s interests.”
— Mike Ingle, 1994-01-01

Thesis: Strong Crypto is a Good Thing

A tool against governments of all flavors, left and right.
Supports religious freedom.
Promotes personal choice.

16.5.2. Dangers of Democracy in General and Electronic Democracy in Particular

Mob Rule : Rights of minorities are often ignored.
Voting Issues : Too many things get decided by vote that have no business being voted on.
- “Don’t tax me…” — De Tocqueville’s warning.
Electronic Democracy : This is even worse.
- Moves further from a republican, representative system to electronic mob rule.
- It is a too rapid system.
Detweiler’s “Electrocracy” (spelling?): Described as brain-damaged and poorly thought-out.

16.5.3. The Collapse of Democracy is Predicted by Many

The “tipping factor” has been exceeded, with real taxation rates at 50% or more in most developed countries, leading to conditions of “taxation without representation” far beyond anything seen in American colonial times.
The rise of professional politicians, mostly millionaires running for office, has made the Cincinnatus approach (going into government just for a few years, then returning to the farm or business) seem like a joke.
Rise of Nominalism : Argued by James Donald.

“After Athenian democracy self-destructed, the various warring parties found that they could only have peace if they disowned omnipotent government. They put together a peace agreement that, in part, proclaimed limits to government, acknowledged inherent limits to what was proper for governments to do, and guaranteed that the government would not go beyond what was proper for government to do. The majority could not do as it pleased with the minority, and not any act of power was a law; law was not merely whatever the government willed. They did not agree on a constitution but agreed to respect an unwritten constitution that already existed in some sense.”

A similar arrangement underlies the American constitution (now defunct) and the English declaration of right (also defunct).
The problem with such formal peace agreements is that they can only be put together after government has substantially collapsed. Some of us wish to explore other possibilities in the event of collapse.
The American constitution collapsed because of the rise of nominalist theories: “The constitution says whatever the courts say that it says.”
— James Donald, 1994-08-31
Issues such as the War on Drugs, conspiracy charges, random searches, and emergency preparedness orders (Operation Vampire Killer, Operation Night Train, REX-84) have contributed to this collapse. The killings of more than a dozen reporters and tipsters over the past decade, many covering the Iran-Contra story and the CIA’s dealings, suggest that the Farm appears to be “swamping” more and more of these troublemakers in the headlong march toward fascism.
De Tocqueville’s warning that the American experiment in democracy would last only until voters discovered they could pick the pockets of others at the ballot box has reached a critical point, which many argue was about 60 years ago.
Prior to the federal income tax and the “New Deal,” there were systemic limitations on the ability to pick the pockets of others, despite populist yearnings by some. After the New Deal and the Great Society, the modern era of runaway taxation commenced.

16.5.4. Depredations of the State

Discrimination Laws : Choice is no longer allowed.
Example: A strip club in LA was forced to install wheelchair access—for the dancers!
Age is no longer allowed to be a factor… gag!
Democracy run rampant reflects the worst fears of the Founders:
- Votes on everything.
Issues include:
- Gun control and seizures, using zoning laws (with FFL inspections as informants).
- The welfare state, as discussed by Murray, has made inner cities worse through theft.
Currency Export Laws : It is absurd that governments attempt to control what individuals do with their own money!

16.5.5. Things Are Likely to Get Worse, Financially

(This is a negative view, though there are also reasons to be optimistic.)

A welfare state that is careening toward the edge of a cliff:
- Escalating spending.
- Constantly increasing national debt (with no signs that it will ever be paid down).
Pension burdens are rising dramatically, according to The Economist , August 1994.
The link to crypto is that individuals had better find ways to immunize themselves from the coming crunch.
Social Security and other pension plans are set to take 30-40% of all GDP:
- Too many promises, with people living longer.
- An estimate of $20 trillion in “unfunded liabilities.”
- Growing health care expectations and national debt.

16.8. The Nature of Crypto Anarchy

16.8.1. What is Crypto Anarchy?

Why the Name?
- A partial pun on several things:
  - “Crypto,” meaning “hidden,” as used in the term “crypto fascist” (Gore Vidal called William F. Buckley this).
  - “Crypto anarchy” implies that the anarchy will be hidden, not necessarily visible.
  - Of course, cryptology is centrally involved.
Motivation :
- Vernor Vinge’s “True Names.”
- Ayn Rand was one of the prime motivators of crypto anarchy. What she wanted to achieve with material technology (mirrors over Galt’s Gulch) is much more easily accomplished with mathematical technology.

16.8.2. Anarchy Turns People Off…Why Not a More Palatable Name?

People don’t understand the term; if they did, it might be more acceptable.
Some have suggested calling it “digital liberty” or something similar, but I prefer to stick with the historical term.

16.8.3. Voluntary Interactions

Involve Schelling points—mutually agreed-upon points of agreement.

16.8.4. Crypto Anarchy as an Ideology Rather Than as a Plan

Without false modesty, I believe crypto anarchy is one of the few real contributions to ideology in recent memory. The notion of individuals becoming independent of states by bypassing ordinary channels of control is a new one.
While there have been hints of this in the cyberpunk genre of writing, and related areas (especially the works of Vinge), the traditional libertarian and anarchist movements have mostly been oblivious to the ramifications of strong crypto.
Interestingly, David Friedman, son of Milton and author of The Machinery of Freedom , became a convert to these ideas. He was inspired enough to give a talk in Los Angeles titled “Crypto Anarchy and the State.”
Conventional political ideology has failed to realize the huge changes coming over the next several decades.
Focusing on unwinnable battles at the ballot box, they fritter away their energies. They join the political process but have nothing to “deal” with, so they lose.
The average American actually wants to pick the pockets of his neighbors (to pay for “free” health care, to stop companies from laying off unneeded workers, to bring more pork back to the local economy), making it highly unlikely that the average voter will ever support a principled Libertarian candidate.
Fortunately, how people vote has little effect on certain “ground truths” that emerge from new technologies and economic developments.

16.9. Uses of Crypto Anarchy

16.9.1. Markets Unfettered by Local Laws

Digital black markets, at least for items that can be moved through cyberspace.

16.9.2. Espionage

16.10. The Implications - Negative and Positive - of Crypto Anarchy

16.10.1. What Are Some Implications of Crypto Anarchy?

A Return to Contracts
- Whiners can’t go outside contracts and complain.
- Relates to: workers, terms of employment, actions, hurt feelings.
- With untraceable communication, virtual networks…

Espionage

Spying is already changing dramatically.
- Steele’s (or Steeler?) “open sources” collecting info from thousands of Internet sources.
- This cuts both ways…
  - Will allow:
    - BlackNet-type solicitations for military secrets (“Will pay $300,000 for xxxx”).
    - Digital Dead Drops: totally secure, untraceable (pools, BlackNet mode).
      - No Coke cans near the base of oak trees out on Route 42.
      - No chalk marks on mailboxes to signal a message is ready.
      - No “burning” of spies by following them to dead drops.
    - No wonder the spooks are freaked out!
Strong crypto will also have a major effect on NSA, CIA, and FBI abilities to wiretap, conduct surveillance, and do domestic and foreign counterintelligence.
- This is not altogether a great thing, as there may be some counterintelligence work that is useful.
- Get used to it. Nothing short of a totalitarian police state (and probably not even that) can stop these trends.

Bypassing Sanctions and Boycotts

Just because Bill Clinton doesn’t like the rulers of Haiti is no reason for me to honor his “sanctions.”
Individual choice, made possible by strong crypto (untraceable transactions, pseudonyms, black markets) + Information Markets and Data Havens:
- Medical
- Scientific
- Corporate knowledge
- Dossiers
- Credit reports
Without the absurd rules limiting what people can store on their computers (e.g., if Alice keeps records going back more than 7 years, she can be thrown in jail for violating the “Fair Credit Reporting Act”).
Bypassing such laws:
- True, governments can attempt to force disclosure of “reasons” for all decisions.
- Anyone accessing such offshore (or in cyberspace) databases must find some acceptable reason for the actions they take.

Consulting

Increased liquidity of information.
Illegal transactions:
- Untraceability and digital money means many “dark” possibilities.
- Markets for assassinations, stolen property, copyright infringement.
- Espionage, information markets (a la AMIX), “digital dead drops.”
- Offshore accounts, money laundering, markets for assassinations.

Disturbing Implications

This is one of the more disturbing implications of crypto anarchy.
Not all implications are wholly negative.
Should put the fear of God into politicians:
- “Day of the Jackal” made electronic.
- Any interest group that can (anonymously) gather money can have a politician zapped.
- Positive and negative implications, of course.
Some people simply need killing. Shocking as that may sound, surely everyone would agree that Hitler deserved killing.
The “rule of law” sounds noble, but when despicable people control the law, other measures are called for.
Personally, I hold that anyone who threatens what I think of as basic rights may need killing.
With liquid markets for liquidations, things may change dramatically.

16.10.2. The Negative Side of Crypto Anarchy

Comment

There are some very real negative implications; outweighed on the whole by the benefits.
After all, free speech has negatives. Pornography has negatives.

Abhorrent Markets

Contract killings: can collect money anonymously to have someone whacked.
Nearly anyone who is controversial can generate enough “contributions.”
Kidnapping, extortion.
Contracts and assassinations:
- “Will kill for $5000” provides a more “liquid” market (pun intended).
- Sellers and buyers more efficiently matched.
- FBI stings (common in hiring hit men) are made almost impossible.
- Made much easier by the inability to trace payments, the lack of physical meetings, etc.

Potential for Lawlessness

Bribery, abuse, blackmail.
Cynicism about who can manipulate the system.

Solicitation of Crimes

Untraceably, as we have seen.

Bribery of Officials and Influencing of Elections

Direct contact with officials is not even needed.

16.10.3. The Positive Side of Crypto Anarchy

(Other positive reasons are implicitly scattered throughout this outline.)
A Pure Kind of Libertarianism
- Those who are afraid of Crypto Anarchy (CA) can stay away (not strictly true, as the effects will ripple).
- A way to bypass the erosion of morals, contracts, and commitments (via the central role of reputations and the exclusion of distorting governments).
Individual Responsibility
- Protecting privacy when using hypertext and cyberspace services (many issues here).
- “It’s neat” (the imp of the perverse that likes to see radical ideas).
A Return to 4th Amendment Protections (or Better)
- Under the current system, if the government suspects a person of hiding assets, conspiracy, illegal acts, tax evasion, etc., they can easily seize bank accounts, stock accounts, boats, cars, etc. The owner has little opportunity to protect these assets.
Increased Liquidity in Markets
Undermining of Central States
- Loss of tax revenues.
- Reduction of control.
Freedom and Personal Liberty
Data Havens
- To bypass local restrictive laws.
Anonymous Markets for Assassinations
- Will have some good aspects:
  - The liquidation of politicians and other thieves.
  - The killing of those who have assisted in the communalization of private property.
  - A terrible swift sword.

16.11. Ethics and Morality of Crypto Anarchy

16.11.1. How Do You Square These Ideas with Democracy?

I don’t; democracy has run amok, fulfilling de Tocqueville’s prediction that American democracy would last only until Americans discovered they could pick the pockets of their neighbors at the ballot box.
There is little chance of changing public opinion or educating them.
Crypto anarchy is a movement of individual opting out, not of mass change and political action.

16.11.2. Is There a Moral Responsibility to Ensure That the Overall Effects of Crypto Anarchy Are More Favorable Than Unfavorable Before Promoting It?

I don’t think so, any more than Thomas Jefferson should have analyzed the future implications of freedom before pushing it so strongly.
All decisions have implications. Some even cost lives.
- By not becoming a doctor working in Sub-Saharan Africa, have I “killed thousands”? Certainly, I might have saved the lives of thousands of villagers. But I did not kill them just because I chose not to be a doctor.
- Likewise, by giving money to starving peasants in Bangladesh, lives could undeniably be “saved.” But not giving the money does not murder them.
Such actions of omission are not the same, in my mind, as acts of commission. My freedom, via crypto anarchy, is not an act of force in and of itself.
- Developing an idea is not the same as aggression.
- Crypto anarchy is about personal withdrawal from the system, the “technologies of disconnection,” in Kevin Kelly’s words.

16.11.3. Should Individuals Have the Power to Decide What They Will Reveal to Others, and to Authorities?

For many or even most of us, this has an easy answer and is axiomatically true. But others have doubts, and more people may have doubts as some easily anticipated developments occur.
- (For example, pedophiles using the much-feared “fortress crypto,” terrorists communicating in unbreakable codes, tax evaders, etc. Lots of examples.)
But because some people use crypto to do putatively evil things, should basic rights be given up? Closed doors can hide criminal acts, but we don’t ban closed doors.