Prominent Nobel Prize Winning Economist Called for Cryptocurrency In 1999

Preface: Cryptocurrencies may be in a speculative bubble. And they may be taken over by people trying to push a corrupt agenda.

But even so, the genesis of the idea for crypto was one of freedom from government oppression.

Milton Friedman, the Nobel Prize winning economist who is often called the most prominent economist of the last 50 years, said in an 1999 interview:

I think the internet is going to be one of the major forces for reducing the role of government. The one thing that’s missing but that will soon be developed is a reliable e-cash.

The creator of Bitcoin, the original cryptocurrency, also had freedom from government interference in mind.

In 2008 , in response to a poster stating “You will not find a solution to political problems in cryptography”, he wrote :

Yes, but we can win a major battle in the arms race and gain a new territory of  freedom for several years.

Governments are good at cutting off the heads of a centrally controlled  networks like Napster, but pure P2P networks like Gnutella and Tor seem to be holding their own.

And in the very first block of Bitcoin (the “Genesis” block) he encloded the following message:

The Times 03/Jan/2009 Chancellor on brink of second bailout for banks.

What does this have to do with freedom?

Government bailout of banks which got in trouble due to their pervasive fraud is the opposite of freedom; it is fascism,  socialism for the rich or cronyism. And see this.

The bailouts have also allowed the big banks to take over our democratic process … at the expense of the majority.

And given that governments and big banks are launching a “war on cash” which would reduce our freedom, it isn’t surprising that people are looking for alternatives.

Indeed, using encryption to protect the privacy of transactions on the web has been a goal for many years. The Christian Science Monitor reports:

In 1983, [David Chaum] suggested a “fundamentally new kind of cryptography” that would enable a better form of money: third parties could not determine payee or the time or amount of the payment. Individual privacy and anonymity was guaranteed, as when paying cash at a gas station or in a drugstore. At the same time, individuals could provide proof of payment, and they could invalidate payments if someone stole their medium of payment, as when using old-fashioned credit cards.

Chaum combined the best of both worlds: the anonymity of cash and the security of plastic. The article that spelled out the idea became one of his most influential papers, “Numbers Can Be a Better Form of Cash Than Paper.” But using this improved form of cash was not only about convenience and security. If crypto cash would not be adopted widely, Chaum feared, “invisible mass surveillance” would be inevitable, “perhaps irreversible.”

Chaum’s idea was magically simple and powerful. Steven Levy, a perceptive chronicler of the grand cryptography debate of the 1990s, called him the “Houdini of crypto.” So powerful were Chaum’s ideas that an entire movement arose. That movement believed crypto was en route to making the state as we know it obsolete.

Many of these early cryptographers had been exposed to a powerful streak of American culture: civil libertarianism with its deep-seated distrust of the federal government — or of any government. Counterculture, with its focus on free speech, drugs, and sexual liberation, was constantly pushing the boundary of what was legal. Meanwhile, the NSA’s hysterical reaction to basic crypto scholarship amplified this hostility toward government in the emerging computer underground of the 1980s. So it was no coincidence that Bay Area cryptographers unearthed what would become one of the most potent political ideas of the early 21st century.


In mid-1988 … May penned the “Crypto Anarchist Manifesto,” whimsically modeled on another famous manifesto with revolutionary ambitions: “The technology for this revolution — and it surely will be both a social and economical revolution — has existed in theory for the past decade,” May wrote, “but only recently have computer networks and personal computers attained sufficient speed to make the ideas practically realizable.”

The possibilities were extraordinary. “Two persons may exchange messages, conduct business, and negotiate electronic contracts without ever knowing the True Name, or legal identity, of the other,” May wrote in his manifesto, using capital letters in honor of his favorite science fiction author. Then May mobilized that most powerful American myth, the Frontier. Barbed wire, a seemingly minor technical invention, had enabled the fencing off of vast ranches and farms in the open rangeland of the West. Barbs on wire had altered forever the concepts of land and property rights in the frontier states, and it had caused the Fence Cutting Wars a century earlier. May sided with the wire-clipping cattlemen and cowboys. On the electronic open range, the barbed wire need not be accepted as immutable fact.

The comparison was odd, but it sounded powerful: Crypto was a game changer. It also emerged as a seemingly minor technical invention at first, from some obscure branch of mathematics. But this time, technology worked for freedom and liberty, and against those who wanted to build fences around their property. For May, crypto was like “the wire clippers” that would dismantle the illegitimate fences around intellectual property. The federal government, he observed with horror, wanted to slow or halt the spread of this technology, and Washington justified the clampdown with vague references to national security. And yes, just as in True Names, criminals would abuse it and take advantage of the renewed liberties. But none of this would stop the rise of crypto anarchy, May knew. He ended his pamphlet with this battle cry: “Arise, you have nothing to lose but your barbed wire fences.”

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