ZoneBitcoin EditorialI had read a few years ago an interview with Timothy C May that was published on the CoinDesk newspaper. Timothy May is THE person behind the famous " Crypto-Anarchist Manifestos ». The manifesto was the ideological reference of the cypherpunk. However, due to the similarity of thought, it is admitted that Satoshi Nakamoto, the inventor of Bitcoin, is related (at least in ideas) to the cypherpunk group.
So, I said to myself – with all the events that have happened in this apocalyptic year of 2022 (Fall of Terra, Implosion of Celsius, Collapse of FTX, etc.), that this interview took on a new meaning.
Here is the translation of the original interview published on October 19, 2018 on Coindesk. The aim was to question Timothy May on the evolution of Bitcoin after 10 years of existence. It's true that the interview is long, but believe me, you will know more about the original philosophy of Bitcoin.
Note: The ZoneBitcoin editorial team does not necessarily agree with all of Timothy May's comments. We simply think that due to his position in the Cypherpunk environment, his analyzes may be interesting to consider and debate.
CoinDesk: Now that bitcoin has entered the history books, how do you think the white paper fits into the pantheon of financial crypto advancements?
Tim: First of all, I will say that I have followed, with some interest, some amusement and a lot of frustration over the last 10 years, the public situation with bitcoin and everything that has happened .
In the pantheon, it deserves a place of choice, perhaps the most important development since the invention of double-entry accounting.
I can’t speak for Satoshi, but I don’t think he wanted bitcoin exchanges that have draconian KYC, AML, passporting, account freezes, and laws about reporting “suspicious activity” to the local secret police. There’s a real possibility that all the noise about “governance,” “regulation,” and “blockchain” is effectively creating a surveillance state.
I think today Satoshi would vomit seeing all this. Or at least he would be working on a replacement for bitcoin as he first described it in 2008-2009. I cannot give real approval to where we are today or even be relieved about the great things already accomplished.
Of course, bitcoin and its variants – a few forks and many altcoin variants – work more or less as originally intended. Bitcoin can be bought or mined, can be sent in a variety of fast ways, a small fee is paid and recipients receive bitcoin and it can be sent in tens of minutes, sometimes even faster.
No authorization is needed for this, no centralized agents, not even trust between the parties. And bitcoin can be acquired and then held for many years.
But this tsunami that swept through the financial world also left a lot of confusion and carnage behind it. Debris from the earthquake of knowledge, failed experiments, Schumpeter’s “creative destructionism.” It’s not exactly the ultimate success story. Would anyone expect their mother to “download the latest software from Github, stake on a platform, use a Terminal to reset settings?”
Timothy May
What I see is losses of hundreds of millions in some programming errors, theft, fraud, initial coin offerings (ICOs) based on bogus ideas, poor programming and too little talented people to carry out ambitious projects.
Sorry if I'm being bitter, but I think the story is screwed. Satoshi has invented a brilliant thing, but the story is far from over. She even acknowledged that the bitcoin release in 2008 was not a final answer received from the gods.
CoinDesk: Do you think others in the cypherpunk community share your views? What do you think is driving interest in the industry or what is killing it?
Tim: Frankly, the novelty of Satoshi's white paper (and then the first uses like with Silk Road) is what attracted a lot of people to the world of bitcoin.
If the project had been about something "regulatory compliant," "bank-friendly," then interest would have been low. (In fact, some electronic transfer projects go back a long way. "SET," for Secure Electronic Transfer, was one such boring project.)
It had no interesting innovations and it was 99% legal. The Cypherpunks ignored him.
It is true that some of us were around when things in the field of "financial cryptography" really started to move. With the exception of some work by David Chaum, Stu Haber, Scott Stornetta, and a few others, most academic cryptographers have focused primarily on the mathematics of cryptology: their gaze has not turned much to the "financial" aspects.
This has of course changed over the last decade. Tens of thousands of people, at least, have flocked to bitcoin, the blockchain, with big conferences almost every week. Most people are probably interested in the “Bitcoin era,” starting around 2008-2010, but with a significant history leading up to it.
History is a natural way for people to understand things…it tells a story, a linear narrative.
About the future, I will not speculate much. I have spoken of some "obvious" consequences from 1988 to 1998, starting with " The Crypto Anarchist Manifesto » in 1988 and the Cypherpunks list from 1992.
CoinDesk: It sounds like you don't think bitcoin lives up to its philosophy, or that the community around it hasn't really respected its cypherpunk roots.
Tim: Yeah, I think greed, media, and “To the Moon!” and “HODL” talk is the biggest FOMO I’ve ever seen.
Not so much in the "Tulipmania" sense with huge price increases, but in the sense of hundreds of companies, thousands of attendees being pumped up to the max. And the hero worship… It's much more publicized than what we saw in the early days of the internet. I think there's way too much publicity given to conference talks, white papers, and press releases. There's a lot of "selling."
People and businesses are trying to find a place for themselves. Some even file dozens or hundreds of patents in fairly obvious variations of the basic ideas, even for topics that were discussed at length in the 1990s. Hopefully the patent system will reject some of them (but probably only the big companies will come out on top in the legal fight that will follow).
The tension between privacy (or anonymity) and “know your customer (KYC)” approaches is an important one. It’s “decentralized, anarchic, and peer-to-peer” versus “centralized, permissioned, and controlled.”
Understand that the vision of many in the privacy community—the cypherpunks, Satoshi, and other pioneers—was explicitly for a permissionless, peer-to-peer system for money transfers. Some had visions of a replacement for “fiat” currency.
Timothy C. May
David Chaum, one of the leading pioneers, was very forward-thinking on the issue of “buyer anonymity.” Where, for example, a department store could receive payments for merchandise without knowing the identity of a buyer. (Which is certainly not the case today, where stores like Walmart and Costco have compiled detailed records of what customers buy. And where police investigators can buy the records or access them for subpoenas. And it’s even worse in some countries.)
Remember, there are many reasons why a buyer might not want to disclose their purchasing preferences. But buyers and sellers both need protections against tracking: a seller of birth control information is probably even more at risk than a mere buyer of such information (in many countries). Then there is blasphemy, sacrilege and political activism.
Approaches like DigiCash who focused on anonymity Buyer (as with shoppers in a store or drivers on a toll road), but were missing a key ingredient: that most people are hounded for their speech or politics about the *salesman*.
Fortunately, buyers and sellers are essentially isomorphic, with just a few changes in a few arrow directions ("first-class objects").
What Satoshi essentially did was solve the "buyer"/"seller" tracking capability tension by making both the buyer AND the seller untraceable. Not perfectly, it seems. Which is why so much activity continues.
CoinDesk: So you're saying that bitcoin and crypto innovators need to fight the powers that be, essentially and not align with them to achieve real innovation?
Tim: Yes, there's not much point for many of us if cryptocurrencies become just another PayPal, just another bank transfer system. What's exciting is the bypassing of the authorities, the exorbitant fee collectors, the middlemen who decide whether Wikileaks – to choose a convenient example – can get the donations through. And to allow people to send money abroad.
Attempts to be “regulatory compliant” will likely kill the primary uses of cryptocurrencies, which are NOT just “another form of PayPal or Visa.”
The broader uses of blockchain technology are a different kettle of fish. Many uses may be compliance-friendly. Of course, many of the proposed uses—such as putting supply chain records on various public or private blockchains—aren’t very exciting. Many point out that these “distributed ledgers” aren’t even new inventions, just variations on databases with backups. Plus, the idea that companies want public visibility into contracts, material purchases, shipping dates, and so on is naive.
Remember, much of the excitement about bitcoin was about circumventing controls, to enable exotic new uses like Silk Road. It was cool and new stuff, not just another PayPal.
CoinDesk: So you're saying we should think outside the box, try to think of ways to apply technology in innovative ways, and not just redo what we know?
Tim: People should do what interests them. That's how most of the innovative stuff like BitTorrent, mix-nets, bitcoin, etc. was invented. So I'm not sure "trying to think of ways" is the best way to put it. My hunch is that people who are motivated by ideology will do what's interesting. Business people probably won't do well at "thinking of ways".
Checks, IOUs, delivery contracts, etc., are all used as currency. Nick Szabo pointed out that bitcoin and some other cryptocurrencies have most if not all of the characteristics of gold, except that bitcoin also has more features: It is transferable anywhere, it is difficult to steal or seize, and it can be sent easily.
The thing is sacred for bank notes, coins or even official-looking checks. These are “centralized” systems that depend on “trusted third parties” such as banks or nation-states to provide a legal or royal guarantee.
CoinDesk: Isn't that a good example of what you want, probably, from censorship (the ability to enforce laws), if we're going to rebuild the entire economy, or even partial economies , on top of that?
Tim: There will inevitably be contact with the legal systems of the United States or the rest of the world. Slogans like "Code is law" are mostly aspirational, not really true.
Bitcoin, as bitcoin, is mostly independent of law. Payments are, by the nature of bitcoin, independent of chargebacks. For example, saying “I want to reverse this transaction” can lead to other legal issues. That may change. But in the current scheme, it is generally unclear who the parties are, what jurisdictions the parties live in, even what laws apply.
That said, I think almost all new technologies have had uses that some people wouldn't like. Gutenberg's printing press was certainly not appreciated by the Catholic Church. There is no shortage of examples. But does this mean that printing presses need to be licensed or regulated?
There have generally been unsavory or worse uses of new technologies (what is unsavory for, say, the USSR may not be unsavory for the Americans). Birth control information has been banned in Ireland, Saudi Arabia, etc. Examples abound: weapons, fire, printing presses, telephones, photocopiers, computers, tape recorders, etc.
CoinDesk: Is there a blockchain or cryptocurrency that works well? In your opinion, does bitcoin have its own vision?
Tim: As I said, bitcoin essentially does what it was intended to do. Money can be transferred, saved (in the form of bitcoin), or even used as a speculative vehicle. The same cannot be said for the dozens of major variants and hundreds of minor ones where a clear and understandable “use case” is hard to find.
Talk of “reputation tokens,” “attention tokens,” “charitable donation tokens,” all of this seems premature to me. And none of it has taken off like bitcoin has. Even Ethereum has a very different approach and has yet to see any interesting uses (at least what I've seen, and I admit I don't have the time or desire to spend hours every day following the comments on Reddit and Twitter.)
Blockchain now has its own rapidly developing industry and is taking several paths: private blockchains, bank-controlled blockchains, public blockchains, even using the bitcoin blockchain itself.
Some uses may prove useful, but some seem to be speculative...It's superficial. Really, are we talking about marriage proposals on the blockchain?
The large number of small companies, large consortia, alternative cryptocurrencies, initial coin offerings (ICOs), conferences, exhibitions, forks, new protocols, are causing a large confusion and yet new conferences take place almost every week.
People travel from Tokyo to kyiv to Cancun for the latest hot conference which lasts 3-5 days. The smaller ones only attract hundreds of fanboys, the larger ones have apparently drawn crowds of 8 people. You can compare this with the simple rollout of credit cards, or even the relatively clean rollout of bitcoin. People cannot spend their mental energy reading technical articles, following weekly announcements, controversial debates. The mental transaction costs are far too great.
The people I hear about transferring "interesting" amounts of money are using basic forms of bitcoin or bitcoin cash, not exotic new things like lightning, Avalanche or the 30 to 100 other ways that exist.
CoinDesk: It sounds like you are optimistic about the value transfer use case for cryptocurrencies.
Tim: Well, it would be a tragic mistake if the race to develop (and profit from) what are confusingly called “cryptocurrencies” ends up developing surveillance dossiers or companies the likes of which the world has never seen. I’m just saying there is a danger.
With the “know your customer” regulation, crypto currency transfers will no longer be like what we currently have with regular cash transactions, or even with wire transfers, checks, etc. Things will be worse than what we have now if a system of "is a person" accreditation and "know your customer" governance is ever put in place. Some countries already want this to happen….
The “license to control the Internet” is something we must fight against.
CoinDesk: It's possible, but you could make a similar claim about the Internet today, it's not exactly the same as the original idea, but it's still useful for driving human progress.
Tim: I'm just saying that we could end up with a regulation of money and transfers that would be pretty much the same as the repression of free speech. Is that progress? If Alice can be prohibited from saying "I'll gladly pay you a dollar next week for a cheeseburger today," isn't that a restriction of speech? "Know your customer" could just as easily be applied to books and publishing: "Know your reader." Gaaack!
I say there are two paths: freedom vs. authorized and centralized systems.
This question was the subject of much discussion already 25 years ago. The government and law enforcement types didn't even really disagree: they saw the approach to this issue.
In an age when a person's smartphone or computer can contain gigabytes of photos, correspondence, business information – far more than an entire house swept away when the Bill of Rights was drafted – the casual interception of telephones and computers is worrying. Many countries are even worse than the United States. New tools to secure data are needed and lawyers need to be trained.
Companies are showing signs of corporatizing blockchain: there are several large consortiums, even signs that want “regulatory compliance.”
It's tempting for some to think that legal protections and judicial oversight will stop the excesses...at least in the United States and some other countries. Yet we know that even the United States engaged in draconian behavior (purges of Mormons, murders and death marches for Native Americans, lynchings, illegal imprisonment of people suspected of Japanese ancestry).
What will China andIran of the powerful “know your writers” (to inevitably extend “know your customer”)?
CoinDesk: Are we still talking about technology? Isn't it just power and the balance of power. Aren't there good things coming from the internet even though it has become more centralized?
Tim: Sure, there have been a lot of good things coming out of the Internet tsunami.
But China already uses massive databases – with the help of search engine companies – to compile “citizen trustworthiness” ratings that can be used to deny access to banks, hotels and travel.
Social media giants are rushing to help build the machinery of the “Dossier Society” (they claim otherwise, but their actions speak for themselves).
I don't want to go on a left-wing rant about Big Brother, but any civil libertarian or real libertarian has reason to be afraid. In fact, many authors predicted this "dossier society" decades ago, and the tools have come leaps and bounds since then.
In thermodynamics, and in mechanical systems, with moving parts, there are "degrees of freedom." A piston can move up or down, a rotor can turn, etc. I believe that social systems and economies can be characterized in a similar way. Some things increase the degrees of freedom, others "lock it in."
CoinDesk: Have you thought about writing something definitive about the current era of crypto, a sort of new version of your old works?
Tim: No, not really. I spent a lot of time in the period 1992-95 writing several hours a day. I don't have the strength to do this again. That a real book didn't come out of it is slightly unfortunate, but I'm stoic about it.
CoinDesk: Let's take a step back and look at your history. Knowing what you know about the early days of cypherpunk, do you see any analogies to what's happening in crypto right now?
Tim: About 30 years ago, I got interested in the implications of strong cryptography. Not so much the "sending secret messages" part, but the financial implications, the bypassing of borders, letting people transact without government control, the voluntary associations.
I came to call it "crypto anarchy" and in 1988 I wrote "The Crypto Anarchist Manifesto", loosely based on another famous manifesto. It was based on " anarcho-capitalism", a well-known variant of anarchism. (It has nothing to do with Russian anarchists or syndicalists, just free trade and voluntary transactions.)
At the time, there was one main conference – Crypto – and two less popular conferences – EuroCrypt and AsiaCrypt. The academic conferences had little to no papers on the links to economics and institutions (politics, if you will). Some papers related to game theory were very important, such as the mind-blowing work “ Zero Knowledge Interactive Proof Systems » by Micali, Goldwasser and Rackoff.
-–>You can read the document here.
I explored these ideas for several years. When I retired from Intel in 1986 (thanks, the stock price went up 100x!), I spent many hours a day reading articles about cryptography, thinking about new structures that were about to become possible.
Things like cyberspace data havens, new financial institutions, time-release cryptography, digital drops through steganography, and of course, digital money.
Around this time I met Eric Hughes and he came to my house near Santa Cruz. We hatched a plan to bring together some of the brightest people we knew to talk about this stuff. We met at his newly rented house in the Oakland hills in the late summer of 1992.
CoinDesk: You mentioned the implications for money… Were there any inclinations then that something like bitcoin or cryptocurrency would come along?
Timothy May: Ironically, at that first meeting, I handed out money from Monopoly games that I had purchased at a toy store. (I say ironically because years later, when bitcoin was first traded around 2009-2011, it seemed like play money to most people – remember the history of Team Building !)
I broke it down and we used it to simulate what a world of strong crypto might look like, with data havens and black markets and remailers (Chaum's "mixes"). Systems like what later became "Silk Road" were incredible. (More than one journalist has asked me why I didn't widely disseminate my "BlackNet" proof of concept. My answer is usually "Because I didn't want to get arrested and imprisoned." Coming up with ideas like that is risky, at least in the United States these days.)
We began meeting monthly, or more frequently, and a mailing list (Editor's note: "newsletter") was soon established. John Gilmore and Hugh Daniel hosted the mailing list. There was no moderation, no filtering, no "censorship" (in the broad sense, not to mention government censorship, which of course there was none.) The "no moderation" policy went hand in hand with "no leaders."
While a handful of about 20 people wrote 80% of the essays and posts, there was no real structure. (We also thought it would provide better protection against government lawsuits).
And of course, this corresponds to a polycentric, distributed, permissionless, peer-to-peer structure. A form of anarchy, in the true "archie" or "no-top" sense of the word anarchy. This had already been explored by David Friedman, in his influential book from the mid-70s, " The Machinery of Freedom". And by Bruce Benson, in "The Enterprise of Law."
I studied the role of legal systems in the absence of a supreme ruling authority. And of course, anarchy is most people's default and preferred mode – choosing what they eat, who they associate with, what they read and watch.
And whenever a government or tyrant tries to restrict their choices, they often find a way around the restrictions: birth control, underground literature, illegal radio reception, copied cassette tapes, USB drives….
This probably influenced the form that bitcoin took with Satoshi Nakamoto's vision.
CoinDesk: What was your first reaction to Satoshi's messages, do you remember how you felt about the ideas?
Timothy May: Actually, I was doing other things and I wasn't following the debates. My friend Nick Szabo mentioned some of the topics that were mentioned around 2006-2008. And like a lot of people, I think my reaction to hearing about Satoshi's white paper and the first "gimmick" transactions was only mild interest. It just didn't seem likely that it would become as big as it is today.
He/she/they debated about how a digital currency would work, what it needed to make it interesting. Then, in 2008, Satoshi Nakamoto published “their” white paper. Much debate followed, but also much skepticism.
In early 2009, an alpha version of "bitcoin" appeared. Hal Finney received the first bitcoin transaction with Satoshi. A few others, Satoshi himself (themselves?) even said that bitcoin would probably either reach zero value or have a "big" value. I think many didn't follow it or expected it to go to zero, just as another failed attempt on the information superhighway.
The infamous buying pizza shows that most considered it fake money.
CoinDesk: Do you still think it’s “gimmick” money? Or has the slowly increasing value sort of ended that argument, in your mind?
Timothy May: No, it's not just gimmick money anymore….It hasn't been for several years. But it is also not yet a substitute for money. For bank transfers, for Hawalah banks, Of course. It works as a money transfer system, and for black markets and others.]
I've never seen such hype, such mania. Not even during the dot.com bubble, the era of Pets.com and people talking about the money they were making buying shares of " JDS Uniphase"
I still think cryptocurrency is too complicated… tokens, forks, sharding, off-chain networks, DAG, proof of work vs. proof of stake, the average person can't plausibly follow all of this.
What use cases, really? We are talking about the possible replacement of the banking system, or credit cards, PayPal, etc.
That's good, but what does it do NOW?
The most compelling cases I hear about are where someone transfers money to a party that has been blocked by PayPal, Visa (etc.), or banks and wire transfers. The rest is media chatter, evangelism, HODL, lies and Lamborghinis to get rich…
CoinDesk: So you think it went wrong. You do not accept the argument that this is how things are built, over time, even if there is sometimes negligence...
Timothy May: Sometimes things are sloppily constructed. Plans fail, dams fail, engineers learn by laughing. But there are many glaring flaws in all this. Programming errors, conceptual errors, poor security methods…
Hundreds of millions of dollars have been lost, stolen, locked in vault errors. If the banks were to lose this kind of my money in these kinds of situations, there would be bloody cries.
When safes were broken into, manufacturers studied the flaws – what we now call the “attack surface” – and modifications were made. It wasn’t just that customers – the banks – were encouraged to upgrade, it was that their insurance rates were lower with the new safes. We desperately need something like this with cryptocurrencies and exchange platforms.
Universities can't even train basic "crypto engineers" fast enough, let alone researchers. Cryptocurrency requires many unusual fields: game theory, probability theory, finance, programming.
When I got my first credit card, I didn’t spend much time reading manuals, much less downloading wallets, cold storage tools, or keeping up with protocols. “It worked, and the money just didn’t disappear.”
CoinDesk: It sounds like you don't like the way innovation and speculation has entered the industry...
Tim: Innovation is great. I’ve seen a lot of it in the chip industry. But we didn’t have conferences EVERY WEEK! And we didn’t announce new products that were just snippets of ideas. And we didn’t start new companies with such sloppiness. And we didn’t fund by “launching an ICO” and raising $100 million from naive speculators hoping to invest in the next bitcoin.
Among my friends, some of whom work at cryptocurrency companies and exchanges, the main interest seems to be speculation. This is why they often keep their cryptocurrency on exchanges: for quick trades, short sales, hedging, but NOT for buying things or transferring assets outside of normal channels.
CoinDesk: Still, you seem pretty well-informed overall on the subject… It seems like you might have a good idea of how the ecosystem “should” be.
Timothy May: I probably spend way too much time following Reddit and Twitter threads (I don't have a Twitter account to speak of).
How should it “be”? As the saying goes, the street will find its own uses for technology.
For a while, Silk Road and its variations were widely used. Recently, it has been HODLing, that is to say speculation. I hear that the bet online is one of the main uses of Ethereum… Let the fools waste their money.
Is the hype worth it? Will cryptocurrency change the world? Probably. The future is undoubtedly online, electronic, paperless.
But at the end of the day, there's way too much hype, way too much publicity, and not a lot of people who understand the ideas.
It's almost like people are realizing there's a whole new world out there and thousands are starting to build boats in their backyards.
Some will succeed, but most will stop building their boats or sink at sea.
We used to be very attached to manifestos. These were not ways to enforce conformity, but to suggest ways to proceed. It's a bit like advising a cat... you don't order a cat, you just suggest ideas and sometimes it works.
Final thoughts:
Don't use something just because it looks cool... only use it if you actually solve a problem (to date, cryptocurrency solves few people's problems, at least in industrialized countries ).
Most of the things we consider problems cannot be solved with cryptography or any other such technology (bullshit like "better donation systems" is not something most people are interested in).
If anyone is involved in dangerous transactions – drugs, birth control information – practice intensive “operational security”… watch how Ross Ulbricht got caught by the law.
Mathematics does not make the law. Crypto remains very far from being usable by ordinary people (even technicians)
Be interested in freedom and the freedom to compromise and speak your way back to the original motivations. Don't waste time trying to find government-friendly financial alternatives.
End of the interview.
Link to the original interview in English: https://www.coindesk.com/markets/2018/10/19/enough-with-the-ico-me-so-horny-get-rich-quick-lambo-crypto /
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