From: tcmay@netcom.com (Timothy C. May)
Date: Wed, 8 Sep 93 19:27:10 PDT
To: cypherpunks@toad.com
Subject: Opportunities in Cyberspace
Message-ID: <9309090219.AA13375@netcom5.netcom.com>
MIME-Version: 1.0
Content-Type: text/plain


Crypto Rebels,

Here's a piece I wrote for another mailing list, the Extropians list,
which about 20 of you are already on (a guess).

I make some points about the importance of strong crypto for the
"colonization of cyberspace."

I start out by commenting on a thread about the Libertarian Party,
which I know many of you have no interest in (not that I have much
interest, either).

Forwarded message:
To: Extropians@extropy.org
From: tcmay@netcom.com (Timothy C. May)
Message-Id: <9309090128.AA05763@netcom5.netcom.com>
Subject: Opportunities in Cyberspace
Date: Wed, 8 Sep 93 18:28:16 PDT


I agree with everything Nick Szabo says here. A few comments:

> These kinds of groups, also ISIL, even LP in its saner moments,
> serve an important role in "spreading the meme" -- giving us
> the political knowledge that the media and high school Civics classes 

I don't discount the value of these groups in spreading the memes,
providing the support for unpopular beliefs ("You mean others think
this way, too?"), and maybe even in providing some alternatives in
local elections.

The focus of the LP on electoral politics these past 20 years, with
little or nothing to show for it, has been misguided, in my opinion.
Especially when alternatives exist.

> they hate the War on Drugs, etc.  Even for the libertarians influential
> writers like Rand, Heinlein, etc. may have played a larger role 
> than activist groups.  Also, implementing crypto-anarchy requires the 
> activists have speific real-world skills (computer programming, 
> mathemetics, legal, banking, etc.), so many libertarians might 
> not be able to contribute without a very large amount of effort.

I hate to say it, but I will anyway! Many libertarians I have met over
the years are ill-suited to making money in conventional jobs. Many
are underemployed, with vague dreams about starting companies or
otherwise making it big. Nothing wrong with high hopes and great
plans, of course. 

As Nick says, there are huge opportunities in cyberspace and crypto
anarchy. I mean these terms in the loose sense that covers networking,
software generation, offshore movements of data and capital, and even
things like games. (Sidenote on games: anybody with a lot of time on
their hands might want to catch the wave that "3DO" will be. If you
don't know what I'm talking about, never mind.)

> Many libertarians have limited resources to devote to the idealistic,
> altruistic efforts of political activism.  These legions should
> note that that crypto-anarchy if successful opens up
> not only political freedoms but also huge business opportunities.
> Governments worldwide confiscate over $3 trillion 
> every year, and most of those property owners would, given sufficient
> marketing, pay a significant fraction of that to avoid said
> confiscation.  This dwarfs the potential markets from, for
> example, ocean colonization by several orders of magnitude. 

And with "persistent institutions" (investment funds/accounts that
can be moved around the world, in pieces that are secure against
seizure, crytographically protected), we may see the development of
private fortunes that are enormous. If a wealthy person believes he
can hide his assets and have them grow even after his death, with some
of the proceeds funding things he now has interest in (and thinks may
help him to be reanimated....nanotech, cryonics, more crypto, etc.),
then some very large fortunes may flow into such channels. 

Such large pools/accounts can take "the long view," funding very
risky, high-payoff projects. Sort of like the "rich old men" so common
in Heinlein's world.

As Nick noted--and as Duncan Frisell and others have noted--the stakes
in avoiding taxes are enormous...trillions of dollars a year.

The colonization of cyberspace--the real next frontier--is well
underway. Within 10 years, graphics computers and Net bandwidths will
be high enough to support a much better illusion of a "real space"
(virtual reality, "True Names"-type spatial methaphors, more abstract
spatial metaphors, etc.). 

And the Nets will be the cutting edge for debate about the nature of
"government"....many of us believe governing such nets by governments
will be impossible. But the groundwork is being laid...and the whole
Libertarian Party debate is increasingly irrelevant.

One real world intrusion could be the outright banning of strong
crypto, with government-approved ciphers mandated. At the Worldcon I
mentioned recently, Whit Diffie, the principal inventor of public key
cryptography, outlined his scenario for a government ban on strong
crypto: the government offers the Clipper/Skipjack key escrow system,
they they argue that criminals and terrorists are using crypto, and
they then make it a crime to use unapproved crypto. The principle
enforcement mechanism is the fear of losing one's home, car, and
business through the civil forfeiture process, as with the drug laws.
Anyone with assets, and any business or corporation, will be scared
shitless to use unapproved crypto, and so alternatives will dry up
(they'll never go away completely, but will be confined to purely
criminal use).

Such a ban will have a chilling, devastating effect on our privacy, on
our ability to set up the cyberspace worlds I have described, and on
computer-mediated markets in general.

Our immediate goal must be to make sure the "genie is out of the
bottle," that enough crypto tools and knowledge are widely
disseminated so that such a government ban is futile. Education and
lobbying, to kill off the Clipper/Skipjack, is also important.

> Yet the startup costs for crypto-anarchy are much smaller, mostly 
> mastering obscure mathematics, programming skills, computer security,
> and legal/business protocols.  What skills can you learn now that
> will look good on your "BlackNet" resume?

Did the BlackNet piece get posted (anonymously, one would hope) to the
Extropians list? It's a good demonstration, I think, of the immanency
of this crypto anarchy world. In a sense, it reveals that fully
anonymous 2-way markets (as in selling Stealth bomber secrets, or
arranging hits, or trading financial data...all kinds of strange
stuff, of varying degrees of respectability) are already a reality.

> I should also take this opportunity to plug the cypherpunks mailing
> list (cypherpunks-request@toad.com) and the cypherpunks meeting
> computing up at Cygnus Support on Saturday, September 11th, 12 noon.
> Crypto-anarchy is an area where libertarian hackers, lawyers, businessmen, 
> etc. can make a vast difference in the future of our political landscape.

Yes, try to make this meeting if you live in the High Beyond (aka Bay
Area). I'll be speaking on this "crypto arms race" that I see coming.
Others will speak on goals, plans, new software, etc.

> prohibitive, and (3) we are a small minority so we almost always lose.  
> Many people can have a vastly larger effect on politics by
> starting businesses (where is a libertarian-freindly news service
> or cable TV channel?), volunteering to help implement crypto-anarchy,
> writing the next _Atlas Shrugged_, operating mailing lists, and
> posting good libertarian essays to the net.  Don't discount the latter --
> talk.politics.misc will likely have over 50,000 readers this
> fall, a larger readership than the number of subscribers to _Liberty_
> and _Reason_ combined.

Well, I'm doing my best on at least a couple of these points. Crypto
anarchy is of course my special interest, and the novel I am still
working on (sigh!) is/was ostensibly a "better 'Atlas Shrugged'", or
so I am hoping (but please don't ask me for progress reports...I get
very grumpy indeed when the first thing people ask is "How's the novel
going?"). And, like most of you, I write essays to various lists and
groups.

One thing I haven't done is to fund a start-up company, or invest in
one, but I am getting the itch to do something along these lines. A
lot of billionaires will come out of the developments of the next
decade or two; in many ways, there are more opportunities with the
globabilization of information flows than there were with personal
computers.

Several Extropians/Cypherpunks I know of have some potentially
exciting business ideas brewing.  

Don't change the channel, you might miss something exciting.


-Tim May


-- 
..........................................................................
Timothy C. May         | Crypto Anarchy: encryption, digital money,  
tcmay@netcom.com       | anonymous networks, digital pseudonyms, zero
408-688-5409           | knowledge, reputations, information markets, 
W.A.S.T.E.: Aptos, CA  | black markets, collapse of governments.
Higher Power: 2^756839 | Public Key: PGP and MailSafe available.
Note: I put time and money into writing this posting. I hope you enjoy it.