Digital cash without any Central Bank.
There are stories that, in their absoluteness, remain fixed once and for all. And compelling stories, whose end we do not yet know, that are written day by day. As may be, for example, the story of cryptocurrencies. An even more enigmatic story when one considers that of Bitcoin, not only do its future developments remain a mystery, but also its beginning. Who invented it? Who is behind this ingenious and powerful revolution capable of reshaping the world order to which we have been accustomed since currency has existed? Of rethinking our daily routines? Of attributing a new value to the word currency, moving it to another plane? That digital one in which we are more and more immersed every day and which, here in Baasbox, we feed on project after project. Let us then go through this history, setting its milestones.
From cryptography to cryptocurrencies
The term cryptocurrency already carries within it the feature that makes this system unique. A cryptocurrency aimed at freeing itself from the control mechanisms of a centralized institution – such as a bank or a government may be – managed by a network with peer-to-peer technologies, with the aspiration of constituting itself as a new type of currency capable of replacing current ones. An idea that was not born today, but has its roots no less than during World War II, when cryptography represented a real weapon, decisive for the fate of the entire conflict. Reason being, it was the U.S. government that officially declared it as such, putting it on the Munition List, the list of government assets under the control of the Department of Defense. An act that banned it, therefore, from ordinary citizens, making it the sole preserve of the military. A ban that – like all bans – would have done nothing but stimulate, in contrast, a libertarian process that would soon have unimaginable developments.
Watchword: freedom!
From the Second World War, fought over heaven and earth, we would move, in the 1970s, to the first crypto war, waged first by a few isolated researchers, then by the Cypherpunk Movement. A movement, this one, driven by an insatiable desire for individual freedom and voluntarism, a bitter enemy of any form of coercion and institution capable of undermining the autonomy of the individual. All in the name of maximum transparency. Another milestone was the establishment in 1982 of the International Association for Cryptologic Research (IACR), a meeting place for all cryptographic researchers. These were the prophetic words of its founder David Chaum: A small group using and tapping into data collected in everyday consumer transactions could covertly conduct mass surveillance, inferring the lifestyles, activities and associations of individuals. A dystopian vision of the world that to us, on the other hand, today, digital natives, seems normal, accustomed as we are to living immersed in a reality where our data is used by companies to whom we concede a great deal of our individual freedom.
The Cyberpunks Manifesto and the new meaning of privacy.
In the wake of the same idea of freedom that underlies the Libertarian Movement, that of the Cypherpunks was grafted on in the early 1990s: a name resulting from the crasis of cypher, cipher, a method that enables encryption, and cyberpunk, a dystopian literary genre in which individualsempower their bodies through technology. It is its activists who signed, in 1993, the Cypherpunks Manifesto, which thus redraws the boundaries of privacy, giving the word a new meaning: Privacy is not secrecy. A private matter is something you do not want the whole world to know, but a secret matter is something you do not want anyone to know. Privacy is the power to selectively reveal oneself to the world.
A talk, this, that could only lead the way for a new exchange system envisioned by cypherpunks, dedicated to building anonymous systems and defending privacy through cryptography. Until now, cash has been the main anonymous transaction system. An anonymous transaction system is not a secret transaction system. An anonymous system allows individuals to reveal their identity when desired and only when desired; this is the essence of privacy. Electronic money, then, as the foundational system of privacy defense. The time was ripe for the birth in the late 1990s of B-Money by Wei Dai, also a member of the cypherpunks movement. A currency that operated in a decentralized manner and could not be controlled by any entity. This was the dawn of Bitcoin, of which precisely B-Money represents the precursor.
Salvation of the world entrusted to bitcoin.
On October 31, 2008, Satoshi Nakamoto, the mysterious inventor of Bitcoin, introduced himself to the world, ready to make his debut two months later with a mission as ambitious as ever: to replace, as a private currency, the public currencies in use. It was Jan. 3, 2009, when the first blockchain was generated, which, in the wake of the Lehman Brothers bankruptcy a few months earlier, contained within it the phrase – headline in that day’s Times – The Chancellor is about to effect a new bailout for the banks. Nothing would ever be the same again. The mission of the new currency was to be, from the outset, clear to all: to save the world, to refound a new one, with no longer centralized but distributed governance, making its users responsible for themselves. To be, all of us, more aware of our value. As individuals, before even as citizens framed in institutions.
The future of cryptocurrencies: an open scenario.
This is history as we know it to date. But what does the future hold? Will cryptocurrencies be able to transform into digital cash? Or will they become a kind of gold standard for state and private currencies? Or will they instead be considered a kind of digital gold? refuge asset against the devaluation of public currencies? financial asset on par with stocks? Of course, today, we cannot know. And this story is also compelling for that very reason. Because it has yet to be written. Entrusted to the code of developers, governments and ordinary people yet to come.
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