Hal Finney on cryptography and government


This week I want to talk about Hal Finney again.

I’ve known for years now that a lot of what we have been told about Bitcoin, its history, and its original vision has been filtered, distorted and revised by different types of people with agendas that may or may not be good.

But sometimes I still find something that genuinely surprises me.

Last week I shared how Hal Finney had argued ‘way back in the 90s', as a certain Australian might say, that traceability in digital cash might be a good thing.

This surprised a lot of you as it did me because, from everything the common narrative would tell us about Hal, he should have been dogmatically against it.

This week I have something even more surprising, from Hal himself again, written on the Cypherpunk Mailing List in 1994. Keep in mind that Hal was arguably the first person other than Satoshi (or the Satoshi team) to run the Bitcoin software.

Hal was responding to the following statement by a ‘Mike Ingle:’

Technological gains are permanent. The political approach is only useful as a tactical weapon, to hold them off until technological solutions are in place. If you want to change the world, don't protest. Write code!

Mike’s comment is almost a perfect representation of the standard one pushed by many in crypto today, especially those from Core: use code to subvert the government.

It’s an idea I’m sympathetic to as someone who thinks government force has been a great evil in this world and that the ‘rule of law’ and constitutionalism have been an insufficient check on that force, but it is one I also recognize could be flawed, strategically inept, and utopian.

From everything they’ve said about Hal, you’d think he would have agreed with Mike.

But here is what Hal wrote about cryptography, code, law and government in his reply:

This position seems to be fast becoming cypherpunks dogma, but I don't agree. The notion that we can just fade into cypherspace and ignore the unpleasant political realities is unrealistic, in my view…Have people forgotten the PGP export investigation? Phil Zimmermann hasn't. He and others may be facing the prospect of ten years in prison if they were found guilty of illegal export. If anyone has any suggestions for how to escape from jail into cyberspace I'd like to hear about them.

Hal elaborated:

Fundamentally, I believe we will have the kind of society that most people want. If we want freedom and privacy, we must persuade others that these are worth having. There are no shortcuts. Withdrawing into technology is like pulling the blankets over your head. It feels good for a while, until reality catches up. The next Clipper or Digital Telephony proposal will provide a rude awakening.

In another post from the same year, Hal writes:

I can agree that cryptography will make some kinds of illegal private transactions easier. What I doubt is that this will happen at a large enough scale to seriously threaten the ability of governments to fund themselves…if the government goes down the tubes it won't be because of the advent of strong cryptography.

Here’s one last one, from the same year:

My primary motivation is of course simply to test what I see as a discrepency between the world I live and work in and that proposed in the crypto-anarchy model. I also want to question speculations that I see playing into the hands of law enforcement interests by making cryptography look more threatening than it is.

Another reason is to discourage complacency that cryptography will solve our political problems by automatically ushering in a libertarian/anarchist utopia.

This is all fascinating to me because Hal is someone who is often held up as the 'ideal’ crypto-anarchist AND he is one of the first people to work on Bitcoin, yet he quite frankly doesn’t sound anything like them here.

He’s obviously someone who cared deeply for human liberty and who understood the potential monetary and social value Bitcoin could have, but, at least in these posts, he argues against the standard narrative about cryptography and government, and thus, about Bitcoin and government.

Maybe he’s right and there is a better way to create a society free from force and fraud than withdrawing to TOR, black markets, and basement coding.

We’ve had 10 years of Bitcoin as subversive anarchist money and I think many of us are a bit exhausted of that all. It doesn’t seem to have worked as well as many thought.

Maybe it’s time Bitcoin is positioned as capitalist, free-market money—money that is appealing to everyone and not just a fringe group of agoraphobic anarchists who think everyone is out to get them.

As always, I don’t really have a definite view on these things right now, and I’m excited I have two options to choose from in BCH and BSV right now, but I find Hal’s argument worth paying attention to.

That’s all for this week! If you like this email and want to shoot me a tip, my Handcash handle is: $makgill.

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Deryk Makgill

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