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Cyphernomicon 2.13

MFAQ--Most Frequently Asked Questions:
Crypto Anarchy

   2.13.1. "What is Crypto Anarchy?"
           - Some of us believe various forms of strong cryptography
              will cause the power of the state to decline, perhaps even
              collapse fairly abruptly. We believe the expansion into
              cyberspace, with secure communications, digital money,
              anonymity and pseudonymity, and other crypto-mediated
              interactions, will profoundly change the nature of
              economies and social interactions.
              Governments will have a hard time collecting taxes,
              regulating the behavior of individuals and corporations
              (small ones at least), and generally coercing folks when it
              can't even tell what _continent_ folks are on!
              Read Vinge's "True Names" and Card's "Ender's Game" for
              some fictional inspirations. "Galt's Gulch" in cyberspace,
              what the Net is rapidly becoming already.
              I call this set of ideas "crypto anarchy" (or "crypto-
              anarchy," as you wish) and have written about this
              extensively. The magazines "Wired" (issue 1.2), "Whole
              Earth Review" (Summer, 1993), and "The Village Voice" (Aug.
              6th, 1993) have all carried good articles on this.
   2.13.2. The Crypto Anarchist Manifesto
           - a complete copy of my 1988 pastiche of the Communisto
              Manifesto is included in the chapter on Crypto Anarchy.
           - it needs rewriting, but for historical sake I've left it
           - I'm proud that so much of it remains accurate.
   2.13.3. "What is BlackNet?"
           - BlackNet -- an experiment in information markets, using
              anonymous message pools for exchange of instructions and
              items. Tim May's experiment in guerilla ontology.
           - BlackNet -- an experimental scheme devised by T. May to
              underscore the nature of anonymous information markets.
              "Any and all" secrets can be offered for sale via anonymous
              mailers and message pools. The experiment was leaked via
              remailer to the Cypherpunks list (not by May) and thence to
              several dozen Usenet groups by Detweiler. The authorities
              are said to be investigating it.
   2.13.4. "What effect will crypto have on governments?"
           - A huge topic, one I've been thinking about since late 1987
              when it dawned on me that public key crypto and anonymous
              digital cash systems, information markets, etc. meant the
              end of governments as we know them. (I called this
              development "crypto anarchy." Not everyone is a fan of it.
              But it's coming, and fast.)
           - "Putting the NSA out of business," as the NYT article put
           - Espionage is changing. To pick one example, "digital dead
              drops." Any message can be sent through an untraceable path
              with remailers....and then posted in encrypted form in a
              newsgroup readable in most countries, including the Former
              Soviet Union. This means the old stand by of the microfilm
              in a Coke can left by a certain tree on a rural road--a
              method fraught with delays, dangers, and hassles--is now
              passe. The same message can be send from the comfort of
              one's home securely and untraceably. Even with a a digital
              signature to prevent spoofing and disinformation. This spy
              can be a Lockheed worker on the Aurora program, a SIGINT
              officer at Woomera, or a disgruntled chip designer at
              Motorola.  (Yes, a countermeasure is to limit access to
              personal computers, to run only standard software that has
              no such crypto capability. Such embargoes may already apply
              to some in sensitive positions, and may someday be a
              condition of employment.)
           - Money-laundering
           - Tax collection. International consultants. Perpetual
              tourists. Virtual corporations.
           - Terrorism, assassination, crime, Triads, Yakuza, Jamaicans,
              Russian Mafia...virtual networks... Aryan Nation gone
   2.13.5. "How quickly could something like crypto anarchy come?"
           - Parts of it are happening already, though the changes in
              the world are not something I take any credit for. Rather,
              there are ongoing changes in the role of nations, of power,
              and of the ability to coerce behaviors. When people can
              drop out of systems they don't like, can move to different
              legal or tax jurisdictions, then things change.
           + But a phase change could occur quickly, just as the Berlin
              Wall was impregnable one day, and down the next.
             - "Public anger grows quietly and explodes suddenly. T.C.
                May's "phase change" may be closer than we think. Nobody
                in Russia in 1985 really thought the country would fall
                apart in 6 years." [Mike Ingle, 1994-01-01]
   2.13.6. "Could strong crypto be used for sick and disgusting and
            dangerous purposes?"
           - Of course. So can locked doors, but we don't insist on an
              "open door policy" (outside of certain quaint sorority and
              rooming houses!) So do many forms of privacy allow
              plotters, molestors, racists, etc. to meet and plot.
           - Crypto is in use by the Aryan Nation, by both pro- and anti-
              abortion groups, and probably by other kinds of terrorists.
              Expect more uses in the future, as things like PGP continue
              to spread.
           - Many of us are explicity anti-democratic, and hope to use
              encryption to undermine the so-called democratic
              governments of the world
   2.13.7. "What is the Dining Cryptographers Problem, and why is it so
           + This is dealt with in the main section, but here's David
              Chaum's Abstract, from his 1988 paper"
             - Abstract: "Keeping confidential who sends which messages,
                in a world where any physical transmission can be traced
                to its origin, seems impossible. The solution presented
                here is unconditionally or cryptographically secure,
                depending on whether it is based on one-time-use keys or
                on public keys. respectively. It can be adapted to
                address efficiently a wide variety of practical
                considerations." ["The Dining Cryptographers Problem:
                Unconditional Sender and Recipient Untraceability," David
                Chaum, Journal of Cryptology, I, 1, 1988.]
           - DC-nets have yet to be implemented, so far as I know, but
              they represent a "purer" version of the physical remailers
              we are all so familiar with now. Someday they'll have have
              a major impact. (I'm a bigger fan of this work than many
              seem to be, as there is little discussion in sci.crypt and
              the like.)
   2.13.8. "Why won't government simply ban  such encryption methods?"
           + This has always been the Number One Issue!
             - raised by Stiegler, Drexler, Salin, and several others
                (and in fact raised by some as an objection to my even
                discussing these issues, namely, that action may then be
                taken to head off the world I describe)
           + Types of Bans on Encryption and Secrecy
             - Ban on Private Use of Encryption
             - Ban on Store-and-Forward Nodes
             - Ban on Tokens and ZKIPS Authentication
             - Requirement for public disclosure of all transactions
             + Recent news (3-6-92, same day as Michaelangelo and
                Lawnmower Man) that government is proposing a surcharge
                on telcos and long distance services to pay for new
                equipment needed to tap phones!
               - S.266 and related bills
               - this was argued in terms of stopping drug dealers and
                  other criminals
               - but how does the government intend to deal with the
                  various forms fo end-user encryption or "confusion"
                  (the confusion that will come from compression,
                  packetizing, simple file encryption, etc.)
           + Types of Arguments Against Such Bans
             - The "Constitutional Rights" Arguments
             + The "It's Too Late" Arguments
               - PCs are already widely scattered, running dozens of
                  compression and encryption is far too
                  late to insist on "in the clear" broadcasts, whatever
                  those may be (is program code distinguishable from
                  encrypted messages? No.)
               - encrypted faxes, modem scramblers (albeit with some
               - wireless LANs, packets, radio, IR, compressed text and
                  images, etc....all will defeat any efforts short of
                  police state intervention (which may still happen)
             + The "Feud Within the NSA" Arguments
               - COMSEC vs. PROD
             + Will affect the privacy rights of corporations
               - and there is much evidence that corporations are in
                  fact being spied upon, by foreign governments, by the
                  NSA, etc.
           + They Will Try to Ban Such Encryption Techniques
             + Stings (perhaps using viruses and logic bombs)
               - or "barium," to trace the code
             + Legal liability for companies that allow employees to use
                such methods
               - perhaps even in their own time, via the assumption that
                  employees who use illegal software methods in their own
                  time are perhaps couriers or agents for their
                  corporations (a tenuous point)
   2.13.9. "Could anonymous markets facilitate repugnant services, such
            as killings for hire?"
           - Yes, though there are some things which will help lessen
              the full impact.
           - To make this brutally concrete, here's how escrow makes
              murder contracts much safer than they are today to
              negotiate. Instead of one party being caught in an FBI
              sting, as is so often the case when amateurs try to arrange
              hits, they can use an escrow service to insulate themselves
              1. From being traced, because the exchanges are handled via
              2. From the killer taking the money and then not performing
              the hit, because the escrow agent holds the money until the
              murder is verified (according to some prototocol, such a
              newspaper report...again, an area for more work,
              3. From being arrested when the money is picked up, as this
              is all done via digital cash.
              There are some ways to reduce the popularity of this
              Murder, Incorporated system. (Things I've been thinking
              about for about 6 years, and which we discussed on the
              Cypherpunks list and on the Extropians list.)

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