May’s dislike of government appears to have been an intellectual discovery, the product mainly of voracious reading. For Assange, it was more emotional. In 1991 he had been arrested for hacking into the Australian telecoms company Nortel, under the pseudonym Mendax. Although he avoided prison, the threat of criminal prosecution had lingered over him for two years before he pleaded guilty to twenty-five hacking charges in 1994. The experience, he later wrote, allowed him: ‘To see through that veneer the educated swear to disbelieve in but still slavishly follow with their hearts!’
Assange saw that crypto could be used for offence as well as defence. He believed that the anonymity crypto could provide would facilitate and encourage whistleblowers to expose state secrets. For Assange, crypto could prise governments open, making them more transparent – ‘to see through that veneer’ – more accountable, and hopefully pull down a few in the process. His inspiration came from another cypherpunk from the mailing list named John Young, who in 1996 founded the website cryptome.org as a place to publish leaked documents – especially any confidential government records and reports. Assange had contacted Young in 2006, saying ‘you knew me under another name from the cypherpunk days’. He told Young of his plan to create a new organisation, which he called WikiLeaks, which he believed would change the world: ‘New technology and cryptographic ideas permit us to not only encourage document leaking, but to facilitate it directly on a mass scale. We intend to place a new star in the political firmament of man.’
For almost a decade, the cypherpunk mailing list was the centre of the crypto world. Hundreds of people used it to propose and learn ciphers, evade detection, discuss radical politics. It was finally discontinued in 2001 when John Gilmore booted it from his host, toad.com, for reasons not entirely clear – Gilmore claimed it had ‘degenerated’. But it had a remarkable track record: anonymous remailers were everywhere, an anonymous browser that allowed users to browse the web without anyone being able to track them was in development, the whistleblowing site Cryptome was becoming a thorn in the side of intelligence agencies. Better still, the US government had dropped its investigation into Phil Zimmermann, and PGP was being used all over the world.
One thing was still missing. Although the cypherpunks had tried to build a system of anonymous digital payment, they had never quite managed it. After Gilmore shut down the original mailing list, others sprang up in its place, with several dedicated to improving crypto. The most notable was the cryptography mailing list hosted by Perry Metzger, where many of the original cypherpunks migrated. But it also attracted a new generation who were just as keen to post papers and ideas about how to evade government surveillance and improve individual privacy online. In early 2008 a mysterious contributor to the cryptography mailing list called Satoshi Nakamoto posted a message that would change everything.
To Calafou
Six weeks after Amir’s talk, I find myself walking down a dusty hill and over a concrete bridge towards an enormous nineteenth-century textile factory complex. The words ‘Calafou: còlonia ecoindustrial postcapitalista’ are painted in large black and green letters on a wall outside. It’s mid-afternoon. I approach a bearded, long-haired man loitering by the entrance, and ask for Amir. ‘He’ll be in the hackers’ space,’ he says. ‘Or asleep.’ I wander in.
Calafou is an experiment in collective living. It is currently run and managed by its thirty or so permanent residents, in partnership with an organisation called the ‘Catalan Integral Cooperative’ (CIC). CIC’s vision is to find new ways of living sustainably, ethically and communally outside the capitalist system, based on the principle of economic and political self-determination.
Everything about Calafou is big. The plot must be 200 acres, although I can’t really tell because it’s so busy with buildings. There are around thirty or so flats, each containing four small rooms, and over 10,000 square metres of former industrial floor space, including a communal dining area and an old abandoned church, which served the spiritual needs of the factory workers who used to live here. The place looks to be in a near-permanent state of creative destruction, cluttered with motorbike engines, half-built bicycles, a row of plasterboard, empty beer bottles, a tractor tyre on its side, a pile of bricks, two 3D printers. I eventually find the hackers’ space towards the back of the complex. It is reached through a large, roofless hall, and up a couple of flights of concrete stairs. It’s about the size of a tennis court, packed with old computers, boxes full of modems, wires, cables and telephones (I later learn every computer they have is recycled or second-hand). A couple of worn sofas line the far wall and a large table in the middle houses more computers, food and a landline telephone. A huge spray-painting of Captain Crunch, the infamous telephone hacker from the 1970s, and Alan Turing, the genius British cryptographer, leaves little doubt about the group’s loyalties.
There are a few people coding – two young men in one corner, and a slightly older man in a hoody sitting in front of three computer screens, smoking a cigarette. He’s deep in concentration. This must be Pablo, Amir’s chief collaborator. Pablo is responsible for the ‘front end’ of the Dark Wallet, the bit you see on your computer. I walk in. No one looks up from their computer. I introduce myself to Pablo, and ask if he has time to talk. He doesn’t, he says, because he’s grappling with a programming problem, but he might soon. I sit down on one of the sofas. This is how most computer programmers and hackers work. Advanced coding is a creative endeavour, Amir had told me back in London. When you’re on a roll, you keep going. Pablo was obviously on a roll.fn2
Eventually he stops typing, expertly rolls another cigarette, and joins me on the sofa. We begin talking about the factory. Pablo is a full-time resident at Calafou. He tells me it’s an exciting time at CIC because the residents are currently in negotiations to buy the entire factory complex, with each person paying 25,000 euros for a flat. For now, it’s all rented. Just over 100 euros will get you a room and working space for a month. Throw in the communal cooking system, and you can get by on very little, and be free to develop your own projects (when you’re not putting in some free labour for the community). Dark Wallet is one of dozens of projects at Calafou, Pablo says. Just before I arrived there had been a session on 3D printing. In the room next door, there is a scientific experiment to grow a strand of amoeba that can store energy. The long-term plan is to create organic computers. Other residents are creating compost toilets, manufacturing solar panels, selling clay ovens and building open-source telecommunications. All the apartments are now full, but there are always extra people couch surfing, especially if there is a public event on, which is often.
Calafou is more than a living space, says Pablo. It’s also a philosophy, inspired and partly funded by a man called Enric Duran. ‘He’s an amazing man,’ says Pablo excitedly. Indeed he is. In late 2008, Duran – dubbed the Robin Hood of the banks – circulated 200,000 copies of a free newspaper called Crisis to explain how he had spent the previous two years fooling thirty-nine banks into lending him nearly half a million euros. He paid back early loans to ensure a good credit rating, borrowed more, stopped paying and gave it all away to social activists (including, I was told, to Calafou) and to pay for future editions of Crisis. In 2009, Duran began promoting the CIC as a practical example of the ideals detailed in his second newspaper: We Can! Live Without Capitalism. He was arrested in 2009 on charges brought against him by six of the banks, and spent two months in prison before being released on bail. When, in 2011, the state prosecutor requested an eight-year prison sentence against Duran, he went into hiding.
After an hour or so, Amir rolls lazily into the room with two friends from the anti-capitalism movement Occupy London, who are visiting. He doesn’t notice me, and doesn’t really register Pablo either. ‘Amir,’ shouts Pablo, ‘I’ve received the first Bitcoin transaction from the stealth address!’ Amir stares intensely at Pablo’s screens for a moment, nodding slowly as his eyes dart about hurriedly. He seems fairly unmoved. ‘Cool,’ he say
s.
Amir was born in London to an Iranian dad and a Scottish-English mother, but was raised in nearby Kent. He taught himself computer programming at school, and quickly found himself in trouble after shutting down the school’s CCTV network. He excelled at maths, and eventually went on to study it at university – a course he started and abandoned three times. He became a squatter, and met Pablo, with whom he then spent five years working on an open-source computer game. Shortly before it was due to be released, the project collapsed. ‘Politics and people got in the way,’ Amir explains. ‘I suddenly found myself with no money and no education. I felt that I’d just wasted five years.’ Although he and Pablo got on well, the experience of working in a large team was not a success: ‘The worst thing in your life,’ he adds, ‘is listening to other people.’
He then spent an increasing amount of time online, making money as a professional poker player. For two years, he played hundreds of poker hands a day, multiple hands at once. He didn’t earn a fortune – but enough to get by. This was the unlikely venue of his political education too. On ‘Black Friday’, in April 2011, the founders of the three largest online poker companies in the US were indicted in a criminal investigation and the FBI seized the websites. (In 2012, the US government dismissed all civil complaints against PokerStars and Full Tilt Poker.) Thousands of players – including many of Amir’s online poker friends – lost their money somewhere in cyberspace. Amir started experimenting with his own peer-to-peer poker site to cut out the online poker companies (and the stake they charge for each hand) but he couldn’t find a decent, secure, payment system. Then in 2011 he stumbled across Bitcoin. He started working on a number of Bitcoin-related projects, and even founded and ran the UK’s first Bitcoin exchange called ‘Britcoin’, which allowed people to exchange Bitcoins directly into pounds sterling, rather than via dollars. Digging around the Bitcoin protocols, he noticed it wasn’t quite as secure and anonymous as everyone thought. It was a brilliant invention, of course, but with a few additions could be made even more subversive. That’s when he came up with the idea of Dark Wallet. He moved to Calafou, brought in Pablo alongside Cody Wilson – the American crypto-anarchist who created the first 3D printed gun – and together they raised $50,000 in a month via the crowdfunding site Indiegogo.
Although Amir’s technical know-how and experience are admired, his ideals and motivations have put him on the fringes of what has become an increasingly respectable Bitcoin community. Dark Wallet has pitted itself directly against organisations seeking to capitalise and control Bitcoin and its market. ‘Many prominent Bitcoin developers are actively in collusion with members of law enforcement and seeking approval from government legislators,’ reads the Dark Wallet blurb. ‘We believe this is not in Bitcoin users’ self-interest, and instead serves wealthy business interests that make up the self-titled Bitcoin Foundation.’ In a 2014 interview with Newsweek, the chief Bitcoin Foundation scientist, Gavin Andresen, said that he thinks of Bitcoin as ‘a just-plain-better, more efficient, less-subject-to-political-whims money. Not as an all-powerful black-market tool that will be used by anarchists to overthrow the System.’ Some within the broader Bitcoin community worry that Amir’s radical politics will stop the currency from being taken seriously. ‘This fuckwit Taaki takes the absolute cake . . .’ wrote one on the popular Bitcointalk forum. ‘It is upon us as a community to cut them loose!’ I emailed Mike Hearn, one of the chief programmers for the Bitcoin Foundation, who told me that, although he doesn’t mind if government’s power to control people through the banks is diminished, ‘I consider Bitcoin principally a technical project. I think people [like Amir] are going to be disappointed when it turns out that bankless money doesn’t actually create anarchy.’
Amir doesn’t care about this sort of talk. A tool to overthrow the System is precisely how he sees it. ‘People at the Foundation are trying to censor Bitcoin,’ he tells me. Both he and Cody Wilson have been on record stating they hope Dark Wallet will be used to buy drugs more securely, and that any negotiation with governments betrays Bitcoin’s vision. He fears its radical libertarian potential is being diluted. ‘The Bitcoin Foundation says, “Oh we need to make it better for the consumers.” No we don’t! What these people forget is that Satoshi himself was political.’
Satoshi
Tim May and the cypherpunks hadn’t invented digital crypto-currencies, but they’d seen what they might do. The honour goes to a cryptographer called David Chaum. Although he never attended a meeting, his work on anonymous payment systems was an inspiration for many cypherpunks, including May. The basic principle of a crypto-currency is that each unit of the currency is a string of unique numbers that users can send one another online. But strings of numbers can be easily copied and spent several times over, which makes them valueless. Chaum solved this problem by creating a single centralised ledger, which kept a record of each person’s transaction to verify that each unit of currency wasn’t in two places at once. He even set up a company in 1990 called DigiCash to realise these plans. But the idea of having only one central system verifying the whole network made it seem too unreliable to many. DigiCash never quite took off.
Satoshi’s post on the cryptography mailing list proposed a new kind of digital crypto-currency, which he claimed solved this problem by creating a distributed system of verification. He called it Bitcoin. ‘He got a sceptical reception at first,’ recalls Hal Finney, the veteran cypherpunk who’d seen several proposals come and go. But Finney noticed Satoshi had included something he’d not really seen before, something called a blockchain.
A quantity of Bitcoin is stored at a Bitcoin address, the key to which is a unique string of letters and numbers that can be kept on a website, desktop, mobile phone, or even a piece of paper. Every time someone sends a Bitcoin as payment, a record of the transaction is stored in something called the blockchain. Transactions are collected into blocks, with each block representing about 10 minutes’ worth of transactions. The blocks are ordered chronologically, and each includes a digital signature (a ‘hash’) of the previous block, which administers the ordering and guarantees that a new block can join the chain only if it starts from where the preceding one finishes. A copy of the blockchain record – a record every single transaction ever made – is maintained by everyone who has installed the Bitcoin software. To ensure everything is running as it should, the blockchains are constantly verified by the computers of everyone else using the software. The upshot of all this is that, at any point, the system knows exactly how many Bitcoins I have in my wallet, so they cannot be copied or spent twice. For the first time, ownership can be transferred, but never duplicated – and all without the assistance of a centrally controlled ledger. It is genius.
After Satoshi and Finney conducted the first ever transaction (and ironed out a few teething problems) Satoshi made it an open-source project, inviting others to help develop the code and the concept. More and more users joined the mailing list, and began to transfer Bitcoins to each other, always half expecting the system to break. But it never did.
The reason Bitcoin is so beloved by libertarians is because it takes control of the money supply away from the state. Satoshi distrusted the global banking system, and saw his crypto-currency as a way to undermine it. He hated that bankers and governments held the key to the money supply and could manipulate it to their own ends. He even added an out-of-place line of text into the ‘genesis block’ (the very first bit of the blockchain – his transactions with Finney), which read: ‘The Times 03/Jan/2009 Chancellor on brink of second bailout for banks.’
To keep governments and central banks out of it, Satoshi placed a cap on the total number of Bitcoins that could ever be produced: 21 million. Although Bitcoins can be bought and sold with real-world currencies, new Bitcoins are not minted by any central authority. Instead anyone who dedicates his computing power to verifying the transactions in the blockchain competes to earn a very small amount of new Bitcoins each time they do so (this is
called ‘mining’). As more Bitcoins are created (approximately 13 million have been created so far), the remaining Bitcoins require more computing power to mine.fn3 The last Bitcoin is expected to be mined in around 2140. But it did not stop there. Satoshi designed it to be a peer-to-peer, encrypted and quasi-anonymous system, which makes linking a Bitcoin transaction to a real-world person very difficult, thereby making collecting taxes and monitoring users extremely awkward. Even though the blockchain records the transactions, it doesn’t record who is behind them.
These features are precisely what Satoshi had in mind all along. While many of his posts to the cryptography mailing list discussed the technicalities of the new currency, he also made his loyalties clear. In his early posts, Satoshi wrote on the list to Finney that Bitcoin was ‘very attractive to the libertarian viewpoint if we can explain it properly’. ‘You will not find a solution to political problems in cryptography,’ wrote one poster in response. ‘Yes,’ replied Satoshi, ‘but we can win a major battle in the arms race and gain a new territory of freedom for several years.’
Satoshi typed in his last post on the list in late 2010, and, like a true cypherpunk, promptly disappeared. Amir was right. At its core, Bitcoin is a political project. But it is also an open-source project, and for many, like the Bitcoin Foundation, its future is as a payment mechanism. For Amir, this is diluting the original cypherpunk vision. That’s why he’s building the Dark Wallet.
The Dark Net Page 8
