A Guide to Crypto-Anarchy: the booming ode to anti-banking
One of the most prolific features of cryptocurrencies and the budding blockchain-powered “decentralized economy” is that is providing individuals with more privacy and digital anonymity than ever before.
The world’s first digital currency bitcoin is enabling anyone in the world with an Internet connection to make digital payments without the need for an intermediary, while anonymous cryptocurrencies such as Monero, Zcash, and PIVX are providing digital currency users with the option to conduct fully anonymous financial transactions.
Cryptocurrencies are breathing new life into the crypto-anarchist movement, which has witnessed substantial growth since the advent of bitcoin almost ten years ago.
What is Crypto-Anarchism?
Unlike what the name may suggest, crypto-anarchism (or crypto-anarchy) is not a political theory that suggests replacing the state with cryptographic technology. Instead, crypto-anarchy can be defined as a cyberspatial realization and manifestation of anarchism, according to University of New South Wales researcher Usman Chohan.
Crypto-anarchists are individuals who utilize cryptographic software and privacy-enhancing technologies to evade persecution while propagating their political freedom, financial sovereignty, and perpetuating their privacy.
The concept of crypto-anarchism was born out of the Cypherpunk movement, which started in the late 1980s.
The Cypherpunk movement included prominent figures such as Wikileaks’ Julian Assange, Blockstream’s Adam Back, bitcoin developer Hal Finney, Zcash founder Zooko Wilcox-O’Hearn, BitTorrent creator Bram Cohen, and Timothy C. May, who published the seminal work on Crypto-Narchaism, the Crypto-Anarchist Manifesto, in 1992, in which he stated:
“Computer technology is on the verge of providing the ability for individuals and groups to communicate and interact with each other in a totally anonymous manner. Two persons may exchange messages, conduct business, and negotiate electronic contracts without ever knowing the True Name, or legal identity, of the other. Interactions over networks will be untraceable, via extensive re-routing of encrypted packets and tamper-proof boxes which implement cryptographic protocols with nearly perfect assurance against any tampering. Reputations will be of central importance, far more important in dealings than even the credit ratings of today. These developments will alter completely the nature of government regulation, the ability to tax and control economic interactions, the ability to keep information secret, and will even alter the nature of trust and reputation.” — Timothy C. May
As it turns out 26 years later, May was correct.
Cryptocurrencies and Crypto-Anarchy
While the crypto-anarchists of the early cypherpunk movement were already able to communicate through encrypted channels to keep their data and information private, what was missing was anonymous digital cash that could be used to conduct financial transactions.
In 2008, when the Bitcoin whitepaper was published, many crypto-anarchists believed that what they have been waiting for has arrived. Bitcoin provides users with the ability to store their wealth and make financial transactions without the need of a traditional financial intermediary such as a bank or payment provider. This allowed crypto-anarchists (and anyone else in the world) to finally send and receive funds outside of the established financial system.
However, over the years it became apparent that Bitcoin’s public blockchain is an inherent flaw in Bitcoin’s construction for those who want to use the digital currency to protect their personal financial sovereignty. Wallet address clustering, linking IP address to bitcoin wallets and blockchain analysis have enabled authorities to link bitcoin wallets to their real-world owners.
To solve this problem, anonymous cryptocurrencies were born.
Anonymous cryptocurrencies provide users with full personal financial sovereignty. That means, as an individual who can decide what you will do with your money without a bank or a government being able to tell you what you can and can’t do with your funds for the simple reason that they are not able to determine how much money you hold and what you are spending it for.
The two market-leading anonymous cryptocurrencies are Zcash (ZEC) and Monero (XMR). However, the strong demand for truly anonymous financial transactions has spurred substantial growth in this cryptocurrency market segment, which has led to the creation of a range privacy-centric altcoins such as PIVX (PIVX), Verge (XVG), Bitcoin Private (BTCP), and many more.
Why Crypto-Anarchism Matters Today More Than Ever
In today’s day and age, every single Internet user is being spied on and their data is being collected. If intelligence agencies such as the NSA are not harvesting your data, it is being collated by technology giants such as Facebook and Google. This fact has become increasingly clearer since Edward Snowden’s whistleblowing in 2013 and the recent Congressional hearing of Facebook CEO Mark Zuckerberg.
However, it is even clearer that the government will not help to protect citizens from these widespread systematic invasions of privacy. This is where crypto-anarchy comes into play.
While opponents of encryption, privacy-enhancing technologies, and anonymous cryptocurrencies primarily cite their potential use by criminals, money launderers, and terrorists as the reason why there should be limited or even banned, the reality is that there has never been a time when privacy-enhancing solutions were more critical than ever.
As our lives continue to move further online, and our homes become infiltrated by Internet-of-Things (IoT) devices that can listen in on our conversations and send data about us to its providers (and third parties who pay for it), people need to be made aware of the fact that there are products and services that are being developed and promoted by the crypto-anarchist movement, which enable us to preserve our privacy and individual liberty.
While crypto-anarchism may sound like a frightening term to some, the reality is that the rise of crypto-anarchism has the potential to play a significant role in protecting the privacy and liberties of today’s citizens.