- The history of cryptography, for thousands of years,
is defined by one single problem.
No matter how you make your code,
the key that you use to encrypt the message
needs to be the same key as the other person
has to decrypt it.
- [Speaker] Here, the important work of decoding messages
whose information must be carefully guarded
and transcribed with perfect accuracy.
- Now, the problem with that is that if anybody
figured out the secret code,
well then you were kind of out of luck.
They could now read all of the messages
that you were going to send back and forth.
- [Narrator] This is what happened when the allies
famously cracked the code of the Germans enigma machine
in World War II and helped turn the tide of the war.
- That was the fundamental limit to your ability
to create secret messages for all of human history,
until the 1970s, when a group of computer scientists
make a series of extraordinary breakthroughs.
- [Narrator] The big breakthrough was figuring out
how to replace the vulnerable single key system
with a novel two key approach.
Each side holds a pair of mathematically linked keys,
essentially, a string of characters.
One shared publicly, the other kept private.
The sender encrypts the message
using the recipient's public key.
The message can only be unscrambled
using the recipient's private key.
The sender can also use their private key
to encode a unique digital signature into the message,
proving that they sent it.
- The thing that's really cool about this
is that I don't need to know your secret key.
No one needs to know your secret key.
It never leaves your device
or your piece of paper or your home.
It stays completely secret.
The only thing that leaves is a public key.
And I can't figure out what your secret key
is from your public key.
- [Narrator] As long as everyone's private keys
stay private, secret messages are essentially uncrackable.
And signatures can't be forged.
The trick lies in how the keys are linked
through a type of math problem using large prime numbers,
which is easy to compute in one direction,
but nearly impossible to reverse engineer.
- It's very easy to take a set of factors
and see that they multiply to a number.
It's very, very hard to take a large number
and figure out what the factors are that divide into it.
Would've required, even someone with a supercomputer,
hundreds or thousands of years
to try to break the cryptography
and get access to the information
- That is a revolutionary change in the world.
Up to that point, we were all kind of helpless
against efforts by those forces that would target us.
And now, suddenly mathematics had given us
this amazing gift, this tool, that we could now use
to communicate secretly in a way that
even those large forces cannot corrupt.
- [Narrator] A column in "Scientific American"
described the breakthrough, but the actual algorithms
remained unpublished in a paper at MIT.
Miller feared the approach, known as public key encryption,
was so powerful that the government might try
to classify it as a military secret.
- I saw this as a hard fork in the road
that was bigger than me, and I decided
I have to do what I can to make sure
that this idea is not suppressed.
So I went to the MIT campus
and I hung around and talked to people
until finally, I managed to get my hands on a paper copy.
I went to a variety of coffee shops,
never made too many copies in any one place
and I mailed it from a variety of mailboxes
to home and hobbyist, computer magazines,
and clubs all across the country.
And I also gave copies of the paper
to a few select friends of mine,
telling them "If I disappear, make sure this gets out".
I have absolutely no idea and I will never have any idea
whether my actions had any influence at all,
but the cat was out of the bag.
- [Narrator] The paper was eventually published in 1978,
and the idea spread like wildfire.
The government tried to keep
these algorithms from the public,
but determined to fight against centralized control,
programmers put the codes on everything
from t-shirts to their own bodies.
- Cryptographers were in the unique position,
especially once people started getting tattoos
of this string of characters, of being able to say
like characters in martial arts movies,
that their bodies were classified as deadly weapons.
(group whistling) - What?
You wanna come with me?
(group laughing)
- [Narrator] Some coders joined forces,
working in loose groups to design technologies,
including new forms of money
that could free people from centralized control.
- We could call them visionaries,
we could call them radicals,
we could also call them weirdos.
Eccentric, technologically sophisticated, very smart,
deeply strange people who wanted to change the world
through transforming how money worked.
- Ah! Space alien!
- They anticipated that there was a coming economy
that was going to be built around all of our data,
the surveillance of our data, that very soon,
we were all going to be living more and more of our lives
communicating through digital technologies.
And a crucial piece of this puzzle
that hadn't really ever been fully solved,
was figuring out how to do money online.
- [Speaker] Where will you find
a world of ideas for your child?
Only at eToys. - For the first time,
public key encryption made it possible
to securely use credit cards
and conduct other private business online.
Without it, online commerce
might never have become a reality.
But for activist coding groups,
the fact that banks and credit card companies
kept a ledger of all transactions,
opened the door for Big Brother.
The most infamous of these groups
was known as the Cyberpunks.
- Their culture was, Hey, we wanna create privacy
'cause we can see where this is going.
They had the foresight to see that any big enterprise,
they are gonna be big companies and regulators
who will try and control it.
- [Narrator] The Cypherpunks mostly communicated
through a mailing list.
- The hardcore of the Cyberpunks
looked to digital money as a way
to not just guarantee privacy,
but as a way that they could potentially
destroy existing governments and states completely.
- There was basically, developers
creating tools for freedom,
and one of those tools was digital cash.
- [Narrator] Not just digital transactions
like the banks were providing,
but a new kind of money altogether.
Across dozens of new forums,
there were a number of attempts to design
a system of digital cash.
And then on Halloween, 2008, a new name,
Satoshi Nakamoto appeared.
Enter Bitcoin.
Called by its inventor, a peer to peer
electronic cash system.
Even now, no one knows who Satoshi Nakamoto,
the inventor of Bitcoin is.
But the paper was revolutionary.
- This is one of the most significant technologies
in recent human history to have been created by someone
who is still wholly anonymous.
- Who is Satoshi is a question that may never be answered,
but in actuality, that sort of mystique
is kind of what adds to the lore
that made Bitcoin really interesting to begin with, I think
- When you look at who sat Satoshi could be,
I say it has to be a group of women,
because men would've taken credit a long time ago.
- Whoever Satoshi is, it's amazing
that they were able to fit
all of what they wanted Bitcoin to be in eight pages
- [Narrator] Satoshi's paper synthesized decades of work
by hundreds of cryptographers and computer scientists
into an elegant whole.
It showed how to create a digital payment system,
based on a new currency that eliminated banks.
(group chanting)
At the exact moment the 2008 financial crisis
shook the public trust that gave them their power.
- [Speaker] It was a manic Monday in the financial markets.
(bell ringing)
The Dow tumbled more than 500-
- People were like, If the world's financial economy
is taking a big hit,
how do we make ourselves more antifragile
towards these things in the future?
- What Bitcoin proposed to do,
what Satoshi proposed to do, was produce
a kind of digital cash
that didn't require those intermediaries.
Instead of transactions going through
a web of connected computers owned by banks
and other intermediaries, it would go through a web
of connected computers owned by the people
conducting that transaction.
- [Narrator] Bitcoins were simply bits of computer code
in a digital ledger.
Each person would hold their coins
in an anonymous digital wallet
identified only by its public key.
The holder of that wallet could only spend those coins
by using their private key to sign the transfer
and authorize the transaction.
But the real breakthrough was something
called the blockchain,
a technology that ensured the ledger
hadn't been tampered with,
and that people hadn't spent the same coin more than once,
all without needing a bank
or other central authority to keep track.