What is a cypherpunk, and what does it have to do with crypto?

A cypherpunk is an activist who believes that strong cryptography, the mathematics of secret codes, should be used to protect personal privacy and freedom. The cypherpunk movement took shape in the early 1990s, and many of the ideas behind bitcoin and other cryptocurrencies grew out of it.

Where did the cypherpunks come from?

The group was founded in late 1992 by Eric Hughes, Timothy C. May and John Gilmore, and met monthly in the San Francisco Bay Area. Its mailing list had about 700 subscribers by 1994. The name, a blend of cipher and cyberpunk, was coined as a joke by the writer Jude Milhon at one of the first meetings.

Members argued against government limits on encryption. At the time, the US treated encryption software as a munition for export purposes, and cypherpunks opposed schemes that would let authorities hold copies of encryption keys.

What does the cypherpunk manifesto say?

Eric Hughes published A Cypherpunk's Manifesto on March 9, 1993. Its central claim is that privacy is necessary for an open society in the electronic age. Hughes defined privacy as choosing what to reveal, not hiding everything.

The manifesto argues that people should be able to make transactions that disclose only what is needed, and that privacy will not be granted by governments or corporations. Instead, the people who want privacy have to defend it by building and publishing the software themselves. As the manifesto puts it, "Cypherpunks write code."

What is a crypto anarchist?

A crypto anarchist is someone who expects, and often welcomes, cryptography weakening the power of states over money and information. The term comes from The Crypto Anarchist Manifesto by Timothy C. May, who says he first circulated it in mid-1988 and posted it to the cypherpunks list in November 1992.

May predicted that anonymous, encrypted networks would let people trade without revealing their identities, with reputation replacing credit checks. He argued this would change taxation and regulation, and compared cryptography to the printing press. He also acknowledged that criminals would misuse it.

How are cypherpunks connected to bitcoin?

Bitcoin drew on years of cypherpunk experiments with digital money. The 2008 bitcoin white paper by Satoshi Nakamoto cites b-money, a 1998 proposal by Wei Dai, and bases its proof-of-work system on Hashcash by Adam Back. Both men were on the cypherpunk list, as were Nick Szabo, who designed a precursor called bit gold, and Hal Finney.

Satoshi announced the paper on October 31, 2008, on a separate cryptography mailing list, describing an electronic cash system with no trusted third party. On January 12, 2009, Finney received the first bitcoin transaction, 10 bitcoin sent by Satoshi, according to Guinness World Records.

Bitcoin's design reflects cypherpunk goals: no central issuer, ownership proved by cryptographic keys, and no need to give a name to transact. Its ledger is public, though, and the white paper says privacy depends on keeping addresses unlinked from names. Projects that push further on privacy are covered in what is a privacy coin. For more on the founder, see who created bitcoin.