Government is not a monolithic thing, which is your enemy.
It's a multitudinous thing, which is your enemy.
Our dream was to enable the future of human freedom.
In the early 1990s, a group of mathematicians, misfits, hackers, and hobbyists
came together around a shared belief that the internet would either demolish artificial walls
or lay the groundwork for an Orwellian state.
We can prevent the Ministry of Truth.
They saw a branch of mathematics called cryptography
as a weapon against central planning and surveillance in this new virtual world.
And what is a cypherpunk? Cypherpunks are cryptography activists.
The more I realize how it was a really pivotal technology for society.
The National Security Agency declared the unrestrained public discussion
of cryptographic research threatened our national security.
I saw this as the critical fork in the road for the future of human freedom.
Coming up, Reason presents a four-part series on a movement that foresaw both
the promise and the peril that lay ahead when the internet upended the world.
It's like standing on top of the mountain and seeing that this is out there.
You people who are here can say, "Okay, what kind of world do we really want to build?" And build it.
Imagine, if you will, sitting down to your morning coffee, turning on your home computer to read the day's newspaper.
Well, it's not as far-fetched as it may seem.
The freedom issues were very important to us.
This is a sample of what you can order through your computer.
It combines the power of your computer with the convenience of your telephone.
We saw that information technology could create a 1984 style tyrannical top-down control society.
Or it could develop into something that is a decentralized enabler of human freedom.
And even back then, our dream was to enable the future of human freedom.
In the late 1980s at the dawn of the online age, a group of young computer scientists in Silicon Valley
started grappling with what this new technology would mean for society.
We took a look at the potential of computer systems and saw that for everything about civilization
that enables it to work, we can enable it to work much better.
The most influential figure in what would become the cypherpunk movement
was the physicist, Tim May, who envisioned the future internet as a place for what he would dub
"crypto-anarchy," where lawbreakers, radicals, and political dissidents
could shield their activities from government surveillance and control.
People doing things that didn't require permissions
from anyone because the people were untraceable, it couldn't be stopped.
But there was another group that saw the potential of computers to remake society
gradually from within, by decentralizing commerce and improving the dissemination of knowledge.
They were dubbed the High-Tech Hayekians because their worldview was influenced by
the work of Austrian economist, Friedrich Hayek.
The fundamental insights of Hayekian economics was
how separately formulated plans tend to mesh well.
And we saw electronic media as a enabler of coordination of a complexity that the world previously was really not capable of.
The clash of visions between the High-Tech Hayekians,
who wanted to build a borderless, frictionless, global marketplace,
and the crypto-anarchist who saw the internet as a technological means of undermining all governments,
set the course for the cypherpunk movement.
If May was the father of crypto-anarchy,
the central figure for The High-Tech Hayekians was the economist and entrepreneur, Phil Salin.
Now, if you own a personal computer,
we are told you can shop at home on what's called The Electronic Mall.
It was a few years before the invention of the World Wide Web but computer companies were offering
a new type of service in which customers could connect through their phone lines
to post messages to a bulletin board, check their horoscopes, or go shopping.
You can buy items from department stores
ranging from Nordstroms to Neiman Marcus, all via computer screen.
Salin, whose outlook was shaped by his careful reading of Hayek,
understood that these services weren't merely a curiosity or a digital version
of the old mail order catalog, they were the beginning of something that had the potential
to one day erase national boundaries through trade and undermine government power.
In a prescient 1991 essay, he foresaw how the internet would change the world by 1995,
2000, and beyond. The static role of store and shopper,
seller and buyer, author and reader, systems defined by their one-way information flows
will be replaced by new forms of media enabling two-way information flows.
Before getting involved with computers, Salin had run a private rocket company
and had coauthored a congressional study critical of NASA's wasteful spending.
But in his view, there was continuity between his interest in space travel and computing,
because in both industries, technology's purpose was to drive down the transaction costs
that impede human activity, making it feasible to explore new frontiers,
and interact in ways that would otherwise be prohibitively expensive.
Now, thanks to breakthroughs in computing, the ability to buy or obtain exactly the information you need
when you want it, in the form you want it, is about to explode at a speed unmatched since the invention of printing.
But Salin was foremost an entrepreneur, and in the mid-1980s,
he set out to launch one of those platforms for buying and selling information.
He called it the American Information Exchange or AMIX.
This business that we're doing is to make possible a new kind of thing,
which is being able to buy and sell information online.
AMIX was a radical idea in the mid 1980s.
Users could buy or sell advice about the real estate market, writing software, or what companies to invest in.
Now, you can say to somebody, so it's like eBay, or like Priceline, or like Amazon.
When we tried to explain this to people, they simply couldn't get it, they could not wrap their heads around this.
Some of them, I think, couldn't imagine the computational end of it. Milton Friedman didn't get it.
Though it was similar in ways to the online marketplaces that would launch a decade later,
AMIX was more than just an idea before its time.
What set it apart was it the grounding in political philosophy
and its lofty goal of elevating individual decision-making over central planning.
It was an instantiation of Austrian economics. Now put into code and put online.
Something like this could have profound human consequences. And that was the vision.
"A fluid transaction-oriented market system, with two-way feedback." Salin wrote,
"would result in crowding out monolithic, mostly government bureaucracies."
We were laying the philosophical foundations of what is e-commerce, that you can now have creative explosion.
It's going to change the world. Yes, that's right.
Intermediating among large populations of human beings through electronic means
results in all kinds of fascinating emergent social behavior.
AMIX's chief architect was the pioneering software engineer, Chip Morningstar,
who had come from a stint at George Lucas's production studio, where he oversaw the creation of Habitat,
which was one of the first online virtual communities.
After joining AMIX, Morningstar coauthored an essay
which argued that in building a world in software, detailed central planning is impossible.
The world is just more complicated. People are more complicated, you cannot know what all their goals are.
What you can do is you can put them into an environment in which certain kinds of things are possible.
What you can't do is tell people what they want.
Phil Salin, Mark Miller, and Chip Morningstar's ideas about how a future internet could decentralize society
inspired Tim May to first articulate a radically different vision.
May, who would go on to become the most influential figure in the cypherpunk movement,
was introduced to Salin by Morningstar in December of 1987.
Chip said, "There's this guy out in Santa Cruz that you ought to talk to."
As a scientist at Intel, May had solved an issue affecting the reliability of the company's memory chips,
called the Alpha Particle problem.
Rich on stock options, he'd been spending his days at the beach, reading science fiction novels,
thinking about how networked personal computers could turn some of their futuristic scenarios into reality.
So I met with Phil in Redwood City and he described how AMIX would work. And I said,
"People aren't going to be selling meaningless stuff like surfboard recommendations."
In May's view, AMIX could be useful as a tool for undermining state power,
but only by shattering legal and social norms.
And I said, "It's going to be corporate information. It's going to be bomber plans for the B-1 bomber.
Who wants to buy that? A competitor or a company.
Who wants to sell that? Someone who has access to that information.
It's two different types of libertarians. He didn't understand the extent to which
you could benefit the world by lowering transaction costs for everybody.
Like Salin and The High-Tech Hayekians, May saw the personal computer as enabling technology for sweeping societal changes.
But he had a different vision of a virtual marketplace for any and all goods and services,
which he dubbed Black Net, or a technological means of undermining all governments.
On AMIX user activity was out in the open, but Black Net would be impervious to government tracking and surveillance.
And perhaps it would be a network with no owners at all.
Many people's first response would be to say that Black Net won't be allowed to happen.
Perhaps, but technology would probably make it inevitable.
If you don't physically meet the person if you don't even know what continent they're on, you can't coerce them.
Tim May is a smart guy. He was great for honing our ideas and technologies against.
But I think him as the shock jock for cypherpunks.
I want to live in the world that surrounds us rather than trying and construct one from scratch.
We saw this as emerging from inside the world and carrying the world along with it.
In 1988, AMIX was acquired by the software giant, Autodesk.
A growing scene of young technologists came together around Salin and The High-Tech Hayekians,
all working towards a common vision of enhancing human freedom through networked personal computing.
It was this hot house of ideas from which a worldview was brewing.
Salin died of cancer in 1991. The same year that the World Wide Web became publicly available.
But his intellectual contributions and conflict with May had laid the groundwork for what would come next for the cypherpunks,
the long effort to build a self-sovereign and anonymous form of digital money,
and the embrace of a branch of mathematics called cryptography,
which they came to view as the key to personal liberation on the internet.