Crypto-anarchism or crypto-anarchy, as described by Vernor Vinge, is a cyber-spatial realization of anarcho-capitalism, employing cryptography to enable individuals to make consensual economic arrangements and to transcend national boundaries.[1] Crypto-anarchists employ cryptographic software to evade prosecution and harassment while sending and receiving information over computer networks, thereby protecting privacy and political freedom.

Using such software, the association between the identity of a certain user or organization and the pseudonym they use is difficult to find, unless the user reveals the association. It is difficult to say which country's laws will be ignored, as even the location of a certain participant is unknown. In a sense, the encrypted anonymous networks (the "cipherspace") can be regarded as an independent lawless territory or as an autonomous zone. However, participants may in theory voluntarily create new laws using smart contracts or, if the user is pseudonymous, depend on online reputation.


The "crypto" in crypto-anarchism should not be confused with the use of the prefix "crypto-" to indicate an ideology or system with an intentionally concealed or obfuscated "true nature". For example, some would use the term "crypto-fascist" to describe an individual or organization that holds fascist views and subscribes to fascist doctrine but conceals their agenda so long as these doctrines remain socially unacceptable. However, Timothy C. May's "Cyphernomicon"[2] indicates that the term "crypto-anarchist" was partially intended as a pun on this usage, even though he did not intend to conceal his beliefs or agenda.


One motive of crypto-anarchists is to defend against surveillance of computer networks communication. Crypto-anarchists try to protect against things like telecommunications data retention, the NSA warrantless surveillance controversy, Room 641A and FRA among other things. Crypto-anarchists consider the development and use of cryptography to be the main defense against such problems, as opposed to political action.

A second concern is evasion of censorship, particularly Internet censorship, on the grounds of freedom of expression. The programs used by crypto-anarchists often make it possible to both publish and read information off the internet or other computer networks anonymously. Tor, I2P, Freenet and many similar networks allow for anonymous "hidden" webpages only accessible by users of these programs. This helps whistleblowers and political opposition in oppressive nations to spread their information.

A third reason is to build and participate in counter economics. Crypto-currencies such as Bitcoin and services like Silk Road make it possible to trade goods and services with little interference of law.

Also, the technical challenge in developing these cryptographic systems is tremendous, which interests some programmers into joining the projects.

The lawEdit

Crypto-anarchists argue that without the ability to encrypt, messages, personal information and private life would be seriously damaged. A ban on cryptography is equal to the eradication of secrecy of correspondence. They argue that only a draconian police-state would criminalize cryptography. In spite of this, it is already illegal to use it in some countries, and export laws are restrictive in others. Citizens in the United Kingdom must, upon request, give passwords for decryption of personal systems to authorities. Failing to do this can result in imprisonment for up to two years, without evidence of other criminal activity.[3]

This legislative key-surrender tactic can be circumvented using automatic rekeying of secure channels through rapid generation of new, unrelated public and private keys at short intervals. Following rekeying, the old keys can be deleted, rendering previously used keys inaccessible to the end-user, and thus removing the user's ability to disclose the old key, even if they are willing to do so. Technologies enabling this sort of rapidly rekeyed encryption include public-key cryptography, hardware PRNGs, perfect forward secrecy, and opportunistic encryption. The only way to stop this sort of cryptography is to ban it completely — and any such ban would be unenforceable for any government that is not totalitarian, as it would result in massive invasions of privacy, such as blanket permission for physical searches of all computers at random intervals.

To truly enforce a ban on the use of cryptography is probably impossible,Template:Citation needed as cryptography itself can be used to hide even the existence of encrypted messages (see steganography). It is also possible to encapsulate messages encrypted with illegal strong cryptography inside messages encrypted with legal weak cryptography, thus making it difficult and uneconomical for outsiders to notice the use of illegal encryption.[4]

The usage of strong cryptography and anonymizing computer networksTemplate:Clarify makes it difficult to detect any trespassing of the laws.

Plausible deniabilityEdit

Crypto-anarchism relies heavily on plausible deniability to avoid censorship. Crypto-anarchists create this deniability by sending encrypted messages to interlinked proxies in computer networks. With the message a payload of routing information is bundled. The message is encrypted with each one of the proxies and the receiver public keys. Each node can only decrypt its own part of the message, and only obtain the information intended for itself. That is, from which node it got the message, and to which node it should deliver the message. With only access to this information, it is thought to be impossible for nodes in the network to know what information they are carrying or who is communicating with who. Peers can protect their identities from each others by using reply onions, digital signatures or similar technologies. Who originally sent the information and who is the intended receiver is considered infeasible to detect, unless the peers themselves wish to reveal this information. See onion routing for more information.

Thus, with multiple layers of encryption, it is effectively impossible to know who is connected to any particular service or pseudonym. Because summary punishment for crimes is mostly illegal, it is impossible to stop any potential criminal activity in the network without enforcing a ban on strong cryptography.

Deniable encryption and anonymizing networks can be used to avoid being detected while sharing illegal or sensitive information, that users are too afraid to share without any protection of their identity. It could be anything from anti-state propaganda, reports of abuse, whistleblowing, reports from political dissidents or anonymous monetary transactions.

Anonymous tradingEdit

Untraceable, privately issued electronic money and anonymous Internet banking exists in these networks. Digital Monetary Trust and Yodelbank were examples of two such anonymous banks that were later put offline by their creators. eCache is a bank currently operating in the Tor network, and Pecunix is an anonymous (submitting personal information when opening an account is optional) gold bank operating on the Internet.

Ukash is an e-money network. Cash in amounts up to £500/€750 can be swapped for a 19-digit Ukash voucher in payment terminals and retail outlets.

Bitcoin is a currency generated by peer-to-peer networked computers that maintain a communal record of all transactions within the system that can be used in a crypt-anarchic context.

Silk Road is an anonymous market operating in the Tor network. Users can buy and sell both physical and virtual objects using the Bitcoin.

Anonymous trading is easier to achieve for information services that can be provided over the Internet. Providing physical products is more difficult as the anonymity is more easily broken when crossing into the physical world: The vendor needs to know where to send the physical goods. Untraceable money makes it possible to ignore some of the laws of the physical world, as the laws cannot be enforced without knowing people's physical identities. For instance, tax on income for online services provided via the crypto-anarchists networks can be avoided if no government knows the identity of the service provider.

In his work, The Cyphernomicon, Timothy C. May suggests that crypto-anarchism qualifies as a form of anarcho-capitalism:
What emerges from this is unclear, but I think it will be a form of anarcho-capitalist market system I call "crypto-anarchy."[5]

See also Edit

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  1. Vernor Vinge, James Frankel. True Names: And the Opening of the Cyberspace Frontier (2001), Tor Books, p.44
  2. Cyphernomicon
  3. Crypto Law Survey
  4. RFC1984
  5. Cyphernomicon, Section 2.3.4.

External links Edit

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