Daniel Paramo and Alex Preukschat
Daniel Paramo is an experienced account and business development executive, data scientist, and engineer. A former account executive at Learning Machine and a former business development manager at Bell Helicopter, Daniel has founded several startups in blockchain technology and the sharing economy. He holds a master’s degree in aerospace engineering from the University of Texas at Arlington.
In the previous chapter, we presented how the free software and open source communities influenced the emergence of self-sovereign identity (SSI). In this chapter, we explain how SSI also stands on the shoulders of cryptography giants. These cryptography pioneers of the 1970s inspired a movement known as the cypherpunks, which subsequently inspired the Bitcoin and cryptocurrency movement based on blockchain and distributed ledger technologies (DLTs). Understanding the cypherpunks—and their unique motivations—sheds light on the larger trend to decentralization, Web 3.0, and SSI.
13.1 The origins of modern cryptography
In his landmark 2001 book Crypto, Steven Levy explains how cryptography in the United States of America evolved over 50 years [1]. What began as a “monopoly” controlled by the National Security Agency (NSA) ended with the progressive dismemberment of that monopoly, led by the academic community—a community in which many of the Bitcoin, cryptocurrency, and blockchain pioneers were involved.
note Crypto has been cited as a key influence by both the main authors of this book as well as many of the contributing authors. The first chapter is available for free in the New York Times archives: https://archive.nytimes.com/www.nytimes.com/books/first/l/levy-crypto.html.
One of the central protagonists of Levy’s story is Bailey Whitfield “Whit” Diffie. When Diffie became interested in cryptography, he quickly realized that the NSA had a monopoly on knowledge about the most advanced cryptography techniques and that only very basic techniques were studied at universities. Levy tells the story of a conversation Diffie had with his boss, a mathematician named Roland Silver, when both of them worked at the Mitre Corporation in Boston in the mid-1960s [1]:
One day, walking with Silver along Mass Avenue near the railroad tracks, he [Diffie] spilled his concerns. Cryptography is vital to human privacy! he railed.
So Diffie decided to look for information across the country to learn more about cryptography. He used a 1967 book called The Codebreakers by David Kahn as his guidebook. It was one of the very few sources available then—even the NSA had tried to block its publication. To quote chapter 1 of Steven Levy’s book [1]:
By the time Whitfield Diffie finished The Codebreakers, he was no longer depending on others to tackle the great problems of cryptography. He was personally, passionately engaged in them himself. They consumed his waking dreams. They were now his obsession.
After several years of research, Diffie eventually met Martin Hellman at Stanford. The two decided to work together to create better cryptographic algorithms. Between them, they developed the core concepts of public-key cryptography in the early 1970s. As chapter 6 explains in more detail, this is the cryptography at the heart of all modern digital security infrastructure. It is what you are using under the hood every time you see the lock in the address bar of your browser—your web session is being secured using the public/private key cryptography in the SSL/TLS standard (the HTTPS protocol).
note The co-author of the SSL 1.0 standard, Christopher Allen, is one of the pioneers of SSI and wrote the groundbreaking essay “The Path to Self-Sovereign Identity.” See www.lifewithalacrity.com/2016/04/the-path-to-self -soverereign-identity.html.
Shortly after reading the report on public-key cryptography by Diffie and Hellman, Ralph Merkle contacted them. Based on their conversations, Merkle conceived of one of the first public/private key exchange protocols, which he named Diffie-Hellman key exchange. As you may have guessed, this is the same Merkle who invented the Merkle tree used in the Bitcoin blockchain structure and other public blockchains (see chapter 6 for more).
Diffie-Hellman inspired three MIT professors—Ron Rivest, Adi Shamir, and Leonard Adleman—to create the first implementation of public-key cryptography. They invented a practical way (based on prime number factorization) to create the one-way function envisioned by Diffie and Hellman. In April 1977, they published “A Method for Obtaining Digital Signatures and Public-Key Cryptosystems” (https://people.csail.mit.edu/rivest/Rsapaper.pdf). After applying for a U.S. patent, the three professors co-founded RSA Security in 1982. Later known simply as RSA, it became the most successful security company globally, eventually selling to EMC Corporation in 2006 for $2.1 billion.
While developing Simple Public Key Infrastructure (SPKI) in the 1990s, Ron Rivest realized that cryptographic credentials could be used as authorization tokens, allowing their bearers to securely access services. Now authorization systems could focus on what you can do instead of who you are. This seed would later grow into the cryptographically verifiable credentials at the heart of SSI—especially those that enabled holders to share identity data selectively instead of having to disclose all data in a credential. (See chapter 7 for more about verifiable credentials and zero-knowledge proofs.)
Inspired by the MIT team and frustrated by the lack of free, open source encryption software, Phil Zimmermann created the first version of Pretty Good Privacy (PGP) in 1991. He released it onto the internet as open source code and a book that could be exported anywhere in the world. PGP gained a considerable following and was a major step toward democratizing cryptography so it could be used by the masses.
13.2 The birth of the cypherpunk movement
Bruce Bethke coined the term cyberpunk in 1980 for his short story of the same name published in 1983. Arguably the most famous writer connected with this term is William Gibson due to his famous 1984 novel, Neuromancer. Cyberpunks were primarily a literary movement—a genre that had the character of a quasi-counterculture in the 1980s. A cyberpunk was an individual who defended—in an exaggerated way—freedom of expression, freedom of information, and communications privacy.
But the literary genre crossed over into the real world—or at least the cyber world—when, in 1992, a group of people interested in building tools to protect their freedom and privacy started communicating via an electronic mailing list. In their first meeting, they decided to call themselves the cypherpunks. Wikipedia defines the term as “any individual advocating widespread use of strong cryptography and privacy-enhancing technologies as a route to social and political change.”
The origins of the cypherpunks goes back further than 1992. In 1986, Loyd Blankenship, aka “The Mentor,” wrote a manifesto called “The Conscience of a Hacker” (www.phrack.org/archives/issues/7/3.txt) by hand from a prison cell in the United States. Also known as “The Hacker’s Manifesto,” this essay became legendary as the first clear articulation of the motivations of “hackers” and “hacktivism.” It is a reproach to society for criminalizing hackers without stopping to understand their motivations—and a clear vindication of their actions. In the words of Blankenship, “Yes, I am a criminal. My crime is curiosity.” (Years later, Blankenship also created a role-playing game called GURPS Cyberpunk, which was seized by the U.S. Secret Service.)
Blankenship was part of the group of hackers who considered the “profession” worthy, almost humanistic. It was an activity that combined craftsmanship and intelligence and never accepted violence. In the purest sense of the word, hackers are enthusiastic about the creation and development of the most sophisticated machines in the world. They firmly believe that technology has a duty to “do something”: to contribute something. For this reason, they share and exchange ideas, codes, and advice that they use to improve and discover solutions to technical problems.
This movement grew through the Cypherpunk mailing list, which by 1997 had over 2,000 subscribers. It was one of the most active and authoritative forums anywhere for technical discussions of mathematics, cryptography, computer science, and politics involving privacy and encryption. In 1993, Steven Levy wrote a Wired article titled “Crypto Rebels” about the cypherpunk movement that captured its essence [2]:
The people in this room hope for a world where an individual’s informational footprints can be traced only if the individual involved chooses to reveal them. There is only one way this vision will materialize, and that is by widespread use of cryptography. The obstacles are political —some of the most powerful forces in government are devoted to the control of these tools. In short, there is a war going on between those who would liberate crypto and those who would suppress it.
One of the Cypherpunk mailing list founders, John Gilmore, went on to become a founder of the Electronic Frontier Foundation (EFF), one of the best-known non-profit organizations fighting to defend privacy and personal freedom in the digital world.
13.3 Digital freedom, digital cash, and decentralization
The core ideas the cypherpunks explored for the defense of digital privacy and freedom led some of them into the realm of digital money. Famous cypherpunks like Wei Dai, Nick Szabo, and Hal Finney later inspired the creator of Bitcoin, Satoshi Nakamoto.
note Wei Dai is the creator of b-money, Nick Szabo of bit gold, and Hal Finney of Reusable Proof-of-Work (RPOW). Satoshi Nakamoto’s white paper refers to Wei Dai. Hal Finney did the first-ever bitcoin transaction with Satoshi Nakamoto. In chapter 17, we explore the overlap of cypherpunks, identity, and money.
They also influenced David Chaum, a legendary cryptographer, who had worked since 1981 on trustworthy voting systems inspired by the creators of public-key cryptography. David later became famous for his work on digital anonymous cash, the digital equivalent of physical cash. He wanted digital money to be anonymous—just like fiat money could be—but without physical barriers. He created a company, DigiCash, as part of his quest to provide a digital currency to the internet. (For more about the relationship of digital identity, money, and SSI, see chapter 17.)
All of these solutions for the exchange of digital value depended on cryptography not just for security but also for decentralized control. Whit Diffie recognized the inherent link between privacy and decentralization very early on, when he was still at MIT. The main MIT computer system, called Compatible Time-Sharing System (CTSS), was one of the first to use time-sharing, a way to enable multiple users to work on the machine simultaneously. This required some way to protect the privacy of each person’s information. CTSS performed this by assigning a password to each user; this was their “key” to unlocking their own files. As Steven Levy tells the story in Crypto [1]:
Passwords were distributed and maintained by a human being, the system operator. This central authority figure, in essence, controlled the privacy of every user. Even if he or she were scrupulously honest about protecting the passwords, the very fact that they existed within a centralized system provided an opportunity for compromise. Outside authorities had a clear shot at that information: simply present the system operator with a subpoena. “That person would sell you out,” says Diffie, “because he had no interest in defying the order and going to jail to protect your data.”
Diffie believed in what he called “a decentralized view of authority.”
By creating the proper cryptographic tools, he felt, you could solve the problem—by transferring the data protection from a disinterested third party to the actual user, the one whose privacy was actually at risk.
What Whit Diffie had envisioned sounds just like what is now being implemented with SSI: decentralized digital wallets where each of us can control our cryptographic keys to our own identity, our data, our relationships, and eventually our own money.
13.4 From cryptography to cryptocurrency to credentials
In this chapter, we have shown that the common thread from the creation of public-key cryptography, to the academic entrepreneur cryptographers, to the cypherpunks, to the cryptocurrency pioneers, to the SSI community is to provide people with more privacy-preserving tools for communication in the digital age.
The influence of the cypherpunk movement is still very present, not just for Bitcoin, but also for blockchain ecosystems like Ethereum—co-founded by leaders like Vitalik Buterin who often refer to themselves as cypherpunks. And these “modern cypherpunks” in the Bitcoin, Ethereum, and other blockchain communities all recognize the fundamental need for SSI as part of their vision to build a decentralized economy.
In the next chapter, we explore how these principles express themselves in another key subject for humanity: peace through digital identity.
References
1. Levy, Steven. 2001. Crypto: How the Code Rebels Beat the Government—Saving Privacy in the Digital Age. Viking.
2. Levy, Steven. 1993. “Crypto Rebels.” Wired. http://archive.wired.com/wired/archive/1.02/crypto.rebels.html.