Cypherpunks:

Back then & now

Web3Privacy Summit 2, Prague 2024

Cypherpunks movement in 1990s

• A group of activists advocating for the widespread use of strong cryptography and privacy-enhancing technologies as a route to social and political change
• Key figures:
  • Eric Hughes: Author of the "A Cypherpunk's Manifesto," which articulates the principles of the movement.
  • Timothy C. May: Author of "The Crypto Anarchist Manifesto," which envisioned a world where cryptographic techniques could ensure personal privacy and freedom.
  • John Gilmore: A co-founder of the Electronic Frontier Foundation (EFF) and advocate for free speech and privacy.

Cryptography Projects

Cypherpunks were involved in the development and promotion of various cryptographic tools:

• PGP (Pretty Good Privacy): Created by Phil Zimmermann in 1991, PGP was one of the first widely available programs for encrypting emails and files.
• SSL (Secure Sockets Layer): Early Cypherpunks contributed to the development of SSL, which is used to secure internet communications.
• Anonymous Remailers and Mix Networks: These technologies aimed to allow anonymous communication online.

Publications and Influence

• Crypto Anarchy: Tim May's vision of a world where cryptography allows individuals to interact securely and anonymously without the need for trusted third parties.
• The Cyphernomicon: An extensive FAQ and philosophical document by Tim May that outlines the principles, goals, and technological foundations of the Cypherpunk movement.
• Cryptocurrencies: Perhaps the most significant legacy of the Cypherpunk movement is the development of cryptocurrencies. Bitcoin, introduced by Satoshi Nakamoto in 2008, was heavily influenced by the ideas and technologies pioneered by Cypherpunks.

Bitcoin is a teenager - celebrated its 15 years anniversairy 3.1.2024

What do we achieve after this time:

• All decentralized by-blockchain products (e.g. ICO, securities, funds,.. ) are completely regulated by the governments
• We cannot trade crypto freely, draconian KYC /AML bureaucracy is required for all transactions (!)  - in the EU all anonymous crypto transactions (with custodial service) are prohibited!
• Governments have already launched aggressive Crypto Wars 2024 to eliminate projects that ensure cryptocurrency privacy!

Government's violence and spreading the fear

• The arrest of Roman Storm (Tornado cash developer)
• The arrest of Keonne Rodriguez and William Lonergan (Samourai Wallet founders)
• Other known privacy projects got scared:
  • Incognito.org privacy project is going to be shut down
  • Wassabi Wallet and Phoenix Wallet left the US
  • Wassabi Wallet is disabling its CoinJoin functionality
  • And many other are (at least) leaving the US market

Is this really what Satoshi expected 15 years ago?

Paradigm clash

Clash of centralized and decentralized paradigm:

We cannot use the rules of centralized paradigm to embrace decentralized paradigm.

It doesn't make sense and it always cripples new technology.

This already happened many taimes: Red flag traffic laws

They want to WARN the public, that cryptocurrency is unsafe. It's used by drug dealers, terrorists and scammers. We need a red flag waving person everywhere it goes.... just like 1865!

Do you consider Red flag traffic laws to be crazy?

If yes, then stop supporting any compliance of decentralized paradigm with the centralized paradigm (the state):

• Stop using centralized crypto exchanges just now!
  • Use decentralized ones instead (OKX DEX, Uniswap, PancakeSwap, dYdX, 1inch, SushiSwap, Osmosis Dex)
  • Vexl.it (especially in Prague / The Czech Republic) and Bisq 2
• Stop helping representatives of the old centralized paradigm (the authoritative government) to embrace the decentralized one. It doesn't make sense (you would never be able to breed and improve horses to be competitive with cars!)
• Embrace state-free solutions

Governments will target all crypto people according to their:

1. KYC purchases

2. Crypto tax declarations

3. Properties and visible wealth in the physical world

4. Excessive consumption (and excessive carbon footprint)

Therefore, it is crucial:

1. Avoid all KYC purchases and use decentralized non-KYC exchanges (vexl.it, bisq, ..)

2. Avoid crypto legal tax declarations (become a resident of a territorial taxation country or live from crypto loans)

3. Stay low profile - buy the properties on anonymous companies (it's still possible), keep minimal fiat on your bank accounts

4. Get a second citizenship/residency that cannot be associated with your banking/fiat history, your carbon footprint

It is not safe to have a permanent residence in the EU

• Permanent residency (unlike your citizenship) in the EU countries binds you with a lot of obligations:
  • mandatory military service (e.g. in Slovakia)
  • mandatory health care & social insurance (in the most countries)
  • tax residency (it should be in the country where you stay more than half year - it is difficult to prove in Shengen area where you are the most of your time)
  • taxation of all your income
    • including foreign income
    • including all your crypto profits!

Is it really so bad to have the residence here?

• Social welfare state is worsening all the time (!)
• Every year you work a bit more for your government
• Unstable legal environment for entrepreneurs (often changing every election)
• A lot of dangerous privacy laws
• Corrupted government institutions & courts

Remember:

More taxes you pay to your government, more corruption you support!

Change your permanent residence

• Prefer the countries with territorial taxation + the countries with double tax treaty agreements (if you want to make business with your home-country customers in order to avoid withholding tax)
• See the list
• You make it harder for your home-country government to be in touch with you in an effective way
• But if you need anything from your government, it's still easy - just use your two EU passports...
• Changing your permanent residency back to your home EU country is easy and you can do it anytime especially when your family or your company owns a property

Crucial facts to cope with

• Most people do not strive for freedom and never will do
  • we, free thinking people, will always be a minority
  • democracy does not and will not lead to more freedom
• We should not expect more-free (democracy-based) society in the future (now we can see the opposite)
• We should use crypto technology to:
  • Eliminate negative impact of all bad decisions of democratic governments / masses (e.g. taxation, AML/KYC, anti-privacy laws, ..)
  • Keep our crypto-anarchist community safe

It is already happening:

• Decentralized legal system (Kleros and similar projects)
• Anonymous cash is prohibited in the most Western countries (for more than 15k EUR) - the rise of street racketeers offering different cryptocurrencies with no KYC
• Increased criminalization of cryptomarket's users
• Mass-scale adoption of Bitcoin Lightning network

The near future expectations

• Cryptomarkets will go mobile - UX / Usability of cryptomarkets will be significantly improved, most people can afford to visit and use decentralized cryptomarkets without technical knowledge

• Decentralized version of Uber/Airbnb/... due to drastic Uber/Airbnb regulations in many cities

Anonymous, decentralized crowdfunded whistleblowing

• Imagine that whistle-blowers (like Snowden) can be entirely funded by an anonymous crowd!
• People will bet on the date of the leakage of the specific document (e.g. the time of the leakage of TTIP)

This means a total decomposition of all government secret agencies and government "classified" agencies-> covert agents may be significantly economically motivated to earn anonymous money and anonymously leak sensitive information.

Towards perfect corruption:

The rise of anonymous prediction markets

• Do you want smaller taxes? Bet your cryptocurrency that there will be unchanged or higher taxes in the next two years.
• Do you want to have legalized drugs? Bet your cryptocurrency that there will be a prohibition for next years
• If you are a politician with the real power to change it, you have an economic incentive to make the opposite bet and win a lot of money in cryptocurrency :)
• More at https://steemit.com/prediction/@digital-liberty/the-democratization-of-corporatism-how-to-achieve-the-perfect-corruption-using-anonymous-predictions-markets

Anti-government insurance

• Availability of anti-government insurance (in case of cryptomarket use, drug possession, bypassing surveillance laws, using cash, ..) thanks to decentralized and anonymous insurance companies (see https://steemit.com/anonymous/@digital-liberty/the-rise-of-anonymous-insurance )
• Providers of Tor exit nodes and, IPFS, OpenBazaar, cryptocurrency full nodes may be cruelly criminalized
• Massive increase of decentralized Internet solutions (funk Feuer, Serval Mesh, ..) that will be out of the government control
• The first proved documented assassination of a politician using the concept of anonymous collaborative murder (Jim Bell's 'Assassination Politics') - politicians will start to fear ... being a politician is a more risky job than ever before

Uber for "everything"

• Existence of universal sharing application allowing anyone to offer any services or products to anyone in a trusted way, without 3rd party
• Described as "Gamma system" by Paul Rosenberg
• Fully decentralized application allowing anyone to offer anything to anyone using anonymous cryptocurrencies, reputation systems, escrow services, based on DAO is technically feasible
• We don't need the governments (especially for making trusted voluntary business) anymore

• The future is a decentralized peer-to-peer society

• The government will start to have really difficult times

Rise of DAOs...

• The states will lose their business license monopoly - people start to prefer a decentralized DAOs instead of the traditional government-licensed companies (see Aragon DAO)
• The governments will radically change the taxation model - no tax for virtual/Internet services, high taxation for real-world properties and real-world businesses, some countries will switch to head-tax
• Massive people immigration to seasteading islands / free ancap-based countries
• Many Tor/OpenBazaar nodes will be placed in the air (anonymous still-flying drones) or in still developing countries with old-school legislation

Fundamental events in our future

• For the governments, it will be impossible to shut down decentralized cryptomarkets
• New kind of financial freedom thanks to truly anonymous crypto projects
• Decentralized Anonymous insurance against the government
• Anonymous prediction markets that make corruption perfect
• Crypto-markets (and DAOs with the anti-government insurance) become much more competitive compared to the government's regulated e-shops even for the non-illegal products and services thanks to this insurance

Build parallel structures

• Look for & cooperate with the similar minded people with the same values and goals
  • the life is too short to interact with the random people :-)
• Read Timothy C May Cyphernomicon
• Read Smuggler's The Second Realm: Book on Strategy
• Join Parallel Polis

Prepare for the worst

• The authoritative government will survive in the following 20 years and will be even more authoritative
• The people using crypto technologies and crypto markets (trying to avoid the state rules) will be criminalized
  • there will be many exemplary lawsuits against many innocent people (Ross Ulbricht, ..)
• Despite the precedents like Ross Ulbricht's case,
  politicians cannot win their fight; they HAVE TO ADAPT to the crypto-anarchy / free-market rules
  • but this may be very painful - a lot of innocent people will be sacrificed during this battle.

Be strong, protect yourself

• Be aware of massive asymmetry between the government and individual
• It is hard to protect your privacy in the real world (physical security is the weakest point of most digital privacy people!)
• Most government attacks against crypto anarchy will use social engineering, few of them using 0-day exploits, the least will be against crypto
• They can always destroy you / compromise you if they want and have a budget
• Avoid the system, be agorist
• Do not be personal, do not create enemies

Be a part of Parallel Polis!

And enjoy your new life!

(hopefully striving for freedom)