Here’s how it looked in 2001:
And here’s some explanatory dialog from the site:
Mailvault was our first success and it was used fairly widely in those days. We were proud of it, and justifiably, I think.
Part 4: Rex Forces a Break
Continuing from Part 3 [link]
Surprisingly quickly, Rex’s people put together a community forum called “Dodge City,” complete with a full spectrum of “early Internet”-style graphics. And give them credit: Dodge City quickly became a hub of activity. It fairly exploded with interesting people and ideas.
Dodge’s success of course made Rex all the more confident that pumping things out fast was the way to go. Unfortunately, the security at Dodge City was pretty poor… or maybe barely existent. I think the programmers wanted to add security to it, but security is difficult and sometimes slow. Rex saw no payoff in it, and he was the one paying them. He’d give security some lip service when enough people complained, but not more than that, and Dodge’s security never improved very much.
And then…
Then Rex ordered his guys to build a fast, cheap financial system. In other words, he was putting together an almost fully insecure version of what Orlin was trying so hard to build right. That sent Orlin over the edge.
But in fairness to wild Rex, it must be said that his system was interesting. Not only did he make it possible to buy and sell shares of our project[4] and other things, but he allowed both buyers and sellers to see the live order book. That’s a very useful trading tool and one that simply isn’t seen by 99% of the people who buy stocks and bonds.
Here’s a very simple example of what one of the pages might have looked like (I have no screenshots or archives):
Security: Muni-corp.
Open orders:
Buy 2000 @ 3.00
Buy 440 @ 3.25
Buy 300 @ 3.50
Buy 210 @ 3.65
Buy 55 @ 3.90
Last Trade 4.02
Sell 21 @ 4.25
Sell 80 @ 4.95
Sell 199 @ 5.25
Sell 2040 @ 6.00
Sell 4,220 @ 8.00
Viewing the order book, you can place your buy and sell positions intelligently. It’s actually a very powerful tool, and most of us had never seen it before.
But as I say, Orlin was seriously (and understandably) angry. Making it worse was the fact that people flocked to Rex’s system. It was easy and it worked… and in many minds, all that security stuff was a downer anyway. Except that this system, if it grew to any significant size, would quickly have become a target-rich environment for money laundering “avengers” worldwide[5]. People would be ruined over it, but not instantly… a time lag that kept people coming in.
And so, Orlin had no real choice but to get away from Rex as quickly as possible. He was looking bad merely by association.
And so, in October 2001 or thereabout, Orlin bought his part of the project from Rex. Properly he bought it from the trust, but Rex had taken control of the trust by that point. (The trustee was his direct employee and did as he was told.) And so, in reality, Orlin bought his work back from Rex.
And again it was Bob who made this happen. He felt that it was a major victory, and I’m quite sure he was right. It was probably his finest hour.
And with that, Orlin’s Digital Monetary Trust (DMT) project was free and could complete its work separate from Rex’s mayhem.
This separation, however, was of serious concern to the people who had donated money to the project. Orlin, the driving genius, was gone, along with his work. And while he kept his mouth shut publicly, there was no escaping the fact that he had pulled out. Orlin had a personal devotion to the people who funded the project of course, but not everyone upholds such things.
And so, Rex had no real choice but to allow the project’s founders to appoint a real board of directors. The new chairman of the board was a very competent, older engineer, whom I’ll call “Sam.” I liked Sam a lot. He did his job seriously and professionally, visiting the project for a few days at a time, then flying back home.
Sam, to his credit, kept things moving forward and did his best to curb Rex. All the donors trusted Sam, and if he had come out and called Rex a thief, the fallout would have been catastrophic.
Curbing Rex, however, was a difficult job, especially when Sam wasn’t there.
In Sam’s absence (as best I recall), Rex started playing around on the Dodge City forum. He had no less than six nyms (identities) that he controlled, and he started promoting himself and his products with them. The people on the forums, however, were often highly intelligent, and they put the pieces together pretty quickly. Rex’s games weren’t criminally bad, but neither were they a show of good faith.
So, we had Rex delivering operable but full-of-holes systems, and Orlin’s group, supposedly producing the real thing, withdrawing into their shell. They fell almost totally silent.
But a situation that sounds ominous as I summarize it here certainly didn’t seem like it at the time. A new visitor to Dodge City would find the best new ideas, the smartest people, and endless action. You want to buy and sell on a digital stock exchange… even futures contracts? Well, come right aboard… here it is! You could buy, sell, and trade, and even wire dollars in and out of the system. And it all worked! I can’t blame people for jumping in with both feet.
Those of us who knew the inside advised others not to trust Dodge City for anything serious, but it was hard to do on the forum, not only because Rex would defend his systems, but because everyone was having so much fun and they didn’t want it to stop. Remember that this was going on in a completely dry environment. There was no Bitcoin, no exchanges, no Tor; Alta Vista was our search engine. There was no BitTorrent either; this was the era of Napster.
On top of that, lots of people who knew were hesitant to say much publicly, because Rex was personally paying nearly everyone involved. Little by little, however, the truth of the situation was slipping out.
This was not a sustainable situation.
Part 5: Battling Rex
Continuing from Part 4 [link]
The big argument against decentralized systems is that there’s no one to enforce conduct… that the powerful will be able to do what they want and get away with it. Please keep that thought in mind, remembering that Rex was the richest person involved, that he owned and controlled the central means of communications, and that most of the “important” people were on his payroll.
By this time, I was involved with the project on a daily basis, especially related to law, the resolution of disputes in pseudonymous space, the ability to enforce justice in the absence of force, and in related areas. And so, when disputes arose between the various parties, I was the natural choice as arbitrator. And some of those disputes involved Rex.
One of my prouder moments was resolving one of these disputes with Rex (no amateur when it came to negotiations) then physically taking gold coins from Rex and hand-delivering them to the lady on the other side of the dispute.
Soon enough, Rex’s bad actions were causing enough commotion that he brought me in to go over his records and “prove” that he was behaving well. I’m not sure what he really expected me to do… or maybe he was drunk… but he misbehaved right in front of me. Here’s a section from the report I wrote and published to the community:
[Rex] has contacted me several times, demanding that I publish the original evidence that convinced me to undertake this investigation. I suggested to him that this was not an especially good idea, but he insisted. Since it is his reputation that stands in jeopardy, I will yield to his request.
None of the following would be made public if [Rex] had not insisted…
On [date], I personally witnessed [Rex] using the Trustee’s email accounts, nyms, and passwords, all without the Trustee being present. This occurred in [Rex’s] office at the Consulado in San Jose.
On [date], I (being present) demanded that the Trustee draft his own
note to be posted on Dodge. [Rex] was very unhappy with me for delaying things and claimed that he had always written the Trustee’s statements.
During the time I spent in San Jose, the Trustee was always fully informed of pertinent details regarding his fiduciary duties. On other matters, [Rex] made or was involved with all decisions and all questions…
I had private conversations with the Trustee that, to one extent or another, supported the claims.
That was the beginning of the end for Rex. People began walking away from him. Before long Dodge City was a shadow of its former self. (Within a year or so, it became useless to Rex, and he closed it.)
Rex’s programmers started moving back to where they had come from.
But I should add one last note about Rex. For all his bluster, bad choices, and even occasional bad faith, he didn’t hate me after I publicly undermined him. He was angry at first, but he rather quickly shifted to respecting the fact that I had scrupulously told the truth. He continued to contact me for advice for some time after.
But this was not the end. Orlin’s team and others aligned with them had not stopped working, even if they were quiet.
As Dodge was winding down, a new community forum appeared. This one featured PGP-encrypted messaging, much better security, and a professional design. And it was designed to be distributed. It was called Distributed City (or DC for short), and here’s a statement from its About Page:
Communities are not static things. They embody dynamic, vibrant, complex social interactions. As the community changes, so too should the website to accommodate the needs of its members. This is a difficult task for website operators. Given limited resources, how do we anticipate and accommodate the needs of our disparate users?
Various strategies can be used. But so long as it is a small, select group of people making all the decisions and controlling the features and architecture of the website, then this is a form of centralized planning. Some people make the rules and others follow them. This is anathema to the creators of Distributed City, who hope to build a community of freedom-seeking individuals, not a storefront or a dictatorship.
The logo was this:
More than that, you can still find the code on Sourceforge.
Distributed City was a gas, and it operated for quite some time thereafter. Again we had the most interesting and active people, and accordingly, the best ideas. Lots of good things sprang from it.
And then…
In December of 2001, DMT, the Digital Monetary Trust, arrived. This was the product. And true to his moral obligations, Orlin and his team made it available first to the project’s donors. He even allowed people to transfer assets from the Dodge City system, which was still operable at the time.
To join DMT, you first created a Cyber-holding corporation, called an “Asset Lodging Trust Account,” or ALTA. A minimum 23-character password was mandatory.
After that, the system wasn’t terribly different from a Charles Schwab account. You had a choice of several currencies (six, as I recall, one of which was a floating basket of currencies Orlin maintained), methods of moving money in and out (including SWIFT), and more or less everything you might expect of a 2002-era banking and trading system. And it worked beautifully.
Orlin’s introduction to the Digital Monetary Trust can still be found here.
Connected to that was an exchange, called the LESE, for Laissez Faire Electronic Stock Exchange. And again, it had more or less everything that Charles Schwab had at the time… except that it was all encrypted, anonymous (again, pseudonymous, to be precise) and all interactions were made with digital bearer certificates, or DBCs.
A digital bearer certificate, if you think about it for a moment, is the same thing as a digital coin. And a lot of people conducted a lot of anonymous commerce through DMT.
I wish I had screenshots to show you the inside pages of the system, but sadly I don’t.
Part 6: Winding It Down
Continuing from Part 5 [link]
By the time DMT was up and running, Dodge was winding down and closing, and the project was winding down. Soon enough (and especially because of Rex’s irregular activity), an audit committee was formed, and we went through all the records. As it turned out, Rex, for all his playing fast and loose, had pumped a lot of his own money into the project, and it probably wouldn’t have been completed without him.
This particular version of “fast and loose,” however, involved some pretty ugly things… like embezzlement. But since the guy who oversaw the embezzlement was also the guy who pumped hundreds of times that amount into the project… well, there really wasn’t anything more to be done, and no one, to my knowledge, pursued it any farther. (You can still find the nitty-gritties here.)
There were people who complained of course, but this really wasn’t an investment in the first place, and anyone who sent money would almost have to understand that. This was a shot at a highly uncertain prize, and a long shot at that. The fact that the intended products were actually built was as good an outcome as could reasonably be expected… at least in my opinion.
The audit itself was a fun set of stories, and I very much enjoyed the others on the audit committee. I was, and am, happy with the report we turned out.
The sad part of this period was the end of DMT. After functioning well for a year or so, DMT was caught in the middle of a scam and became insolvent. Orlin and his partner should have known better, but they didn’t. I’m fully convinced that there was no ill-intention on their part, but they were interfacing with the SWIFT system and didn’t understand that wires could be reversed. The clearest of DMT’s debts were repaid, but after that there was no more they could do, and it was closed.
And in the end it was probably best that DMT did close. If it had continued running truly anonymous business through the SWIFT system, the US government would have eventually swarmed in and harassed, threatened, or done worse to lots of innocent people. As it was, that didn’t happen.
From the absence of DMT, the e-gold economy rose, and from the ashes of e-gold, Bitcoin arose. Would that all have happened if our Laissez Faire City project had never been? It’s impossible to say of course, but it’s possible that it would not have. Because the legacy of our project wasn’t the products we produced, as important as they were. What mattered was that we did things.
For all the craziness of the project – and there are many more stories to be told of it – we acted at a time when other people were withdrawing from the fight. We kept progress alive during a dark time for all things cypherpunk. As time goes on, I am more and more proud of that fact.
I will close with the conclusion from one of our last reports. I think they were well chosen words.
[I]t served as incubator for technologies and business entities that are now operating independently, competitively, and on sound business principles. It also spawned a community of individuals who have gotten to know each other in the virtual world (and in some instances, in the real world) and are now taking the dreams of the past into their next phase.
From the chaos of the past a new order emerges…
And emerge it did.
Greatest Crypto Project: Supplemental
After the first part of this series ran, I was surprised to find an archive of the Dodge City Times in my inbox. I had forgotten about the DC Times. It was our third newspaper, centered on Rex’s Dodge City system. And it, too, was a gas.
Here’s the review edition of The Times:
Here’s issue number 12:
And here’s an issue of the DC Slimes:
Here are some of the graphics:
* * *
[1]I thought it was from Alvin Toffler’s The Third Wave, but apparently it isn’t.
[2]Technically there were two, one succeeding the other. Both were run by Orlin, but an ownership dispute made a name change necessary.
[3]Which was almost impossible to refuse for an unemployed or underemployed programmer. Fly to the tropics, bring your fami
ly if you have one, live cheaply and well, and work on interesting projects for decent pay. Besides, most programmers in those days were fairly strong libertarians, and so they were pulled in for that reason as well.
[4]I’m simplifying here. The way the project was structured was very complicated, and while “shares” gets the idea across, that term wasn’t actually used.
[5]Efforts against money laundering are actually financial surveillance operations. Government money has become one gigantic system of surveillance and control. “Money laundering” is simply a scary and mostly meaningless term that keeps people confused enough to allow mass surveillance and control. If the operators of the national money systems came out and told the truth (“We’re building a system that resembles ‘the mark of the beast’ in your Bible”), things would go far less smoothly for them.
The Untold Story of the Greatest Crypto Project Ever Page 2
