Digital Gold Read Online Free Page A
Author: Nathaniel Popper
credit card statements they can follow her movements over the course of a day. Itâs no accident that financial records are one of the primary ways that fugitives are tracked down. Eric Hughesâs Cypherpunk Manifesto had dwelled on this problem at great length: âWhen my identity is revealed by the underlying mechanism of the transaction, I have no privacy. I cannot here selectively reveal myself; I must always reveal myself,â Hughes wrote.
âPrivacy in an open society requires anonymous transaction systems,â he added.
Cold, hard cash had long provided an anonymous way of making payments, but this cash did not make the transition overto the digital realm. As soon as money became digital, some third party, such as a bank, was always involved and therefore able to trace the transaction. What Hal, Chaum, and the Cypherpunks wanted was a cash for the digital age that could be secure and uncounterfeitable without sacrificing the privacy of its users. The same year as Hughesâs manifesto, Hal wrote an e-mail to the group imagining a kind of digital cash for which âno records are kept of where I spend my money. All the bank knows is how much I have withdrawn each month.â
A month later, Hal even came up with a cheeky moniker for it: âI thought of a new name today for digital cash: CRASH, taken from CRypto cASH.â
Chaum himself had already come up with his own version of this by the time the Cypherpunks got interested. Working out of an institute in Amsterdam, he had created DigiCash, an online money that could be spent anywhere in the world without requiring users to hand over any personal information. The system harnessed public-key cryptography to allow for what Chaum called blind digital signatures, which allowed people to sign off on transactions without providing any identifying information. When Mark Twain Bank in the United States began experimenting with DigiCash, Hal signed up for an account.
ButChaumâs effort would rub Hal and others the wrong way. With DigiCash, a central organization, namely Chaumâs company, needed to confirm every digital signature. This meant that a certain degree of trust needed to be placed in that central organization not to tinker with balances or go out of business. Indeed, when Chaumâs company went bankrupt in 1998,DigiCash went down with it. These concerns pushed Hal and others to work toward a digital cash that wouldnât rely on any central institution. The problem, of course, was that someone needed to check that people werenât simply copying and pasting their digital money andspending it twice. Some of the Cypherpunks simply gave up on the project, but Hal wasnât one to fold so easily.
Ironically for a person so eager to create new money, Halâs interest wasnât primarily financial. The programs he was writing, like PGP, were explicitly designed to be available to anyone, free. His political distrust of government, meanwhile, was not driven by selfish resentment about paying taxes. During the 1990sHal would calculate the maximum bill for his tax bracket and send in a check for that amount, so as to avoid the hassle of actually filling out a return. He bought his modest home on the outskirts of Santa Barbara and stuck with it over the years. He didnât seem to mind that he had to work out of his living room or that the blue recliners in front of his desk were wearing thin. Instead of being motivated by self-interest, his work seemed driven by an intellectual curiosity that bubbled over in each e-mail he wrote, and by his sense of what he thought other people deserved.
âThe work we are doing here, broadly speaking, is dedicated to this goal of making Big Brother obsolete. Itâs important work,â Hal would write to his fellow travelers. âIf things work out well, we may be able to look back and see that it was the most important work we have ever done.â
CHAPTER 2
1997
T he
âPrivacy in an open society requires anonymous transaction systems,â he added.
Cold, hard cash had long provided an anonymous way of making payments, but this cash did not make the transition overto the digital realm. As soon as money became digital, some third party, such as a bank, was always involved and therefore able to trace the transaction. What Hal, Chaum, and the Cypherpunks wanted was a cash for the digital age that could be secure and uncounterfeitable without sacrificing the privacy of its users. The same year as Hughesâs manifesto, Hal wrote an e-mail to the group imagining a kind of digital cash for which âno records are kept of where I spend my money. All the bank knows is how much I have withdrawn each month.â
A month later, Hal even came up with a cheeky moniker for it: âI thought of a new name today for digital cash: CRASH, taken from CRypto cASH.â
Chaum himself had already come up with his own version of this by the time the Cypherpunks got interested. Working out of an institute in Amsterdam, he had created DigiCash, an online money that could be spent anywhere in the world without requiring users to hand over any personal information. The system harnessed public-key cryptography to allow for what Chaum called blind digital signatures, which allowed people to sign off on transactions without providing any identifying information. When Mark Twain Bank in the United States began experimenting with DigiCash, Hal signed up for an account.
ButChaumâs effort would rub Hal and others the wrong way. With DigiCash, a central organization, namely Chaumâs company, needed to confirm every digital signature. This meant that a certain degree of trust needed to be placed in that central organization not to tinker with balances or go out of business. Indeed, when Chaumâs company went bankrupt in 1998,DigiCash went down with it. These concerns pushed Hal and others to work toward a digital cash that wouldnât rely on any central institution. The problem, of course, was that someone needed to check that people werenât simply copying and pasting their digital money andspending it twice. Some of the Cypherpunks simply gave up on the project, but Hal wasnât one to fold so easily.
Ironically for a person so eager to create new money, Halâs interest wasnât primarily financial. The programs he was writing, like PGP, were explicitly designed to be available to anyone, free. His political distrust of government, meanwhile, was not driven by selfish resentment about paying taxes. During the 1990sHal would calculate the maximum bill for his tax bracket and send in a check for that amount, so as to avoid the hassle of actually filling out a return. He bought his modest home on the outskirts of Santa Barbara and stuck with it over the years. He didnât seem to mind that he had to work out of his living room or that the blue recliners in front of his desk were wearing thin. Instead of being motivated by self-interest, his work seemed driven by an intellectual curiosity that bubbled over in each e-mail he wrote, and by his sense of what he thought other people deserved.
âThe work we are doing here, broadly speaking, is dedicated to this goal of making Big Brother obsolete. Itâs important work,â Hal would write to his fellow travelers. âIf things work out well, we may be able to look back and see that it was the most important work we have ever done.â
CHAPTER 2
1997
T he
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