Everyone knows that bitcoin was invented by Satoshi Nakamoto. But we don’t know much else about the history of Nakamoto or bitcoin, beyond the fact that Nakamoto first discussed the idea on a cypherpunk mailing list. For their part, cypherpunks had long wanted anonymous, cryptographically-secure, peer-to-peer digital money, but why?

To answer this question and to tell the rest of the story, New York University historian and media scholar Finn Brunton traveled to prepper and libertarian enclaves, spoke with people who mint their own silver coins, who want to live forever, and strongly endorse bitcoin. Amidst this tangle of alternative lifestyles, Bruton also uncovered bitcoin’s connections to Agorism and Extropianism—ideologies for a market society free from intrusion of the state (Agorism) and a trans-humanist refusal to accept the limitations of human life (Extropianism). Brunton says that, together, these ideologies influenced the development of bitcoin, dark markets, and ironically, the mainstream crypto industry which then stole the show. Brunton describes this history in his new book Digital Cash: The Unknown History of the Anarchists, Utopians, and Technologists Who Created Cryptocurrency (Princeton University Press, 2019).

Brunton has also written several articles on cryptocurrencies and two other books, Spam and Obfuscation with Helen Nissenbaum. Years ago, Brunton shared with me a draft of his new book while I was researching Cryptocurrencies and Blockchains, my own attempt to describe how cryptocurrencies and blockchains are changing society. I spoke with Brunton about how his research on spam led to his research on bitcoin, his favorite cypherpunks, and what he thinks is wrong with bitcoin today. This text has been lightly edited for clarity and brevity.

What’s the historical moment that contributed most to the invention and evolution of bitcoin and later cryptocurrencies?
For cryptocurrencies, this was the 2008 financial crisis. I think we don’t often appreciate how much prehistory there is for bitcoin and how much has happened over the subsequent years. I think we lose sight of the fact that it had a really specific genesis, which was introduced and adopted as the world went through an absolute financial catastrophe. We forget how terrifying it was when it looked like we were on the verge of a planet-wide credit freeze, with all of these organizations in free fall and when the tremendous brittleness of the financial infrastructure was all coming due, one piece after another.

I say all of that because one of the burdens that bitcoin, and blockchain more generally, have is that this is supposed to be a scarce, stable financial instrument. This is supposed to be a hoard-able thing that you can collateralize and then use as the basis for an alternate financial infrastructure. If we look at the commitments bitcoin was making, they don’t make a ton of sense from the perspective of what subsequently happened in the crypto industry. But they make a lot more sense when you understand them as reasonable bets about imminent financial calamity.

There’s a connection between your first book on spam and your later research on cryptocurrencies. In particular, bitcoin was built on Adam Back’s work on Hashcash, which was an anti-spam technique. How did you go from spam to cryptocurrencies
There’s two connections and you’ve already mentioned one of them, which is the early legacy. You have proof-of-work, which is rooted in anti-spam and adjacent problems like dealing with DDoS attacks. That’s where you’re trying to rate-limit people from doing certain kinds of network attacks.

Towards the end of my research, I realized that more and more people in anti-spam were no longer doing anything with spam at all. They were figuring out how to prevent spammers from being able to bank. You can cut off 90 percent of the profitability of spam through banking measures. I started learning about the ways spammers were trying to work around these new law enforcement approaches and were getting into the world of payments and underground mechanisms for cashing out accounts.

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Looking back, what really animated my interest in these projects was not just the technologies, but the fantasies that animated the technologies. What were the social visions—what the historian René Fülöp-Miller calls “the wish dreams”—that will often be the driving elements of technological adoption and social change. The book is about spam. But it’s mostly about all these fantasies and models and plans of new forms of human togetherness that networked computing enable, and then what happens when these models hit the real world. There are two threads: payment platforms for spam accounts and rate limiting anti-spam stuff. Then, not long after the original release of the first bitcoin white paper [in 2008], I realized there’s this whole amazing subculture there and it’s explicitly utopian.

In fact, there’s a whole family of subculture. There isn’t just an interesting story about technological adaptation, or a story about a subcultural reinvention of banking and payments. There is a story about competing wish dreams and visions and utopian fantasies that are all at once colliding into this real world and making a mess in the most unlikely way.

Your new book, Digital Cash, introduces readers to these tribes of people associated with the origins of digital cash, everyone from Extropians to early MIT computer scientists. Can you talk about them?
As I kept working on the book, I came to see these small cliques of people, a lot of whom knew each other. They shared a deep underlying belief of being able to change the world through the mechanism of money. Not philanthropy or budgeting or altering the interest rate or whatever, but developing new technologically-enabled monetary systems that bring about their visions of what they wanted the future to be.

Of all the different groups, the Extropians are the dearest to my heart. The more I researched them, the more there was a weird personal resonance for me because I grew up in the Bay Area. I was born in Sausalito. I grew up in Fairfax and Berkeley and San Francisco in the 1980s and 1990s. The Extropians were such a pure and total expression of the utopian optimism of that specific corner in that specific time. It was remarkable to see how much their vision of the future did not come to pass.

Who are the Extropians and what was their vision for the future?
There’s these two paradoxical threads that came together in the Extropian movement, which were foundational to bitcoin and subsequent cryptocurrency theories and concepts. The Extropians have one foot in the world of a classical libertarian model of money, in which it needs to possess intrinsic value, so you can rely on it to remain stable even as governments go through upheaval. The money itself cannot be devalued. There’s a bunch of libertarian philosophical reasons for that—it’s the legacy of [Austrian economist] Ludwig von Mises. But, the Extropians also had a foot in a very different kind of libertarianism that was interested in the idea of money as a spur for innovation. The premise was that, rather than having some kind of very stable reference point, or an “intrinsic objective value,” money should be chaotic.

The theory behind this ultra free market apparatus was to dramatically increase the pace at which innovation would happen. In the Extropian movement, there’s an idea that investment vehicles and coupons and scrip allow you to do things like bet on future outcomes in a way that would increase the likelihood of their happening and then monetize and build on those events. So, that’s thread number two—the chaotic wild west of money, of stateless money—the innovation thread.

Finn Brunton

The Extropian idea is if we can get that system moving fast enough, if we can get this ultra free market spurring innovation—generating inventiveness and entrepreneurship, crazy new ideas, producing breakthroughs—then it’s going to accelerate our society into a whole new order of being, of singularity. On the other side of this singularity, a lot of our current concerns about scarcity are going to be simply irrelevant.

If you want some form of money which is digital, which is not weighed down by having to be gold, which is not premised on archaic survivalist bullshit about precious metals, it would be able to be transacted over the network and would also be provably and verifiably scarce, which meant that it could be hoarded, which meant that you could bet on its future value, which would help to spur that bet into actually coming true.

So, Extropianism as a philosophical movement was committed to advancing five tenets, which were boundless expansion, dynamic optimism, self-transformation, intelligent technology, and spontaneous order. And with those five doctrines in mind, they then began to build a whole set of life practices and technological projects and start ups and events and publications and conventions. The essence of this idea is that, in the process of fighting entropy, you’re ascending on a path towards transcendence of the human condition, of removing all of the existing limitations that surround life on earth and human intelligence.

How does this connect to bitcoin?
The thread you might not intuit is immortality. One of the ideas with these financial structures and payment systems is for people to carry money as a store of value forward through their death and revivification, into a future society that would be profoundly different, that would be post-national and even post-human.

The money systems would dramatically accelerate the rate of technological transformation, so there would be a singularity and a string of massively incentivized breakthroughs that would allow people to live forever. It’s pretty hard to argue with people who understand themselves as being the last generation of humans who will die and who are trying to apply these ideas to the construction of a cryptocurrency, to digital cash.

You can trace this thread all the way back to people like Phillip Salin who was developing the American Information Exchange, an early pre-internet, online information marketplace. He’s thinking about how to create forms of capital that he can carry on past his own death to essentially fund his return to life when the future that he envisions comes about.

There is a story about competing wish dreams and visions and utopian fantasies that are all at once colliding into this real world.

Then you can follow that forward through to Tim May, who’s a key figure in the cypherpunk world and someone who’s thinking about black information markets and anonymous online cash. He writes in The Crypto Anarchist Manifesto about the kinds of communities that would be interested in adopting what we now call cryptocurrency. And one of the key groups he identifies are immortalists, people who want mechanisms to try experimental research, to fund illegal or unstudied health products and to create long-term dynasties. In other words, financial architectures that can fund themselves and fund their own revival far into the future.

At the root of many radical and powerful technologies there is not only a practical application, but a larger fantasy. That’s often what it takes to drive the lean years of early adoption and development. The fact that the fantasy turned out to be nothing less than living forever is really a remarkable thing to discover.

You mentioned growing up in California, and now you’re in New York. In your research, you’re often traveling to interesting locations. At one point you wrote about going to White Mountains to attend PorcFest in New Hampshire, which is basically the cuddly version of Galt’s Gulch. How does this sense of place inform your research?
I was originally trained as a historian of science. One of the people biggest influences on me is Bruno Latour. He’s widely known within the academic community, but maybe not the BREAKERMAG readership. He’s a philosopher of science who developed Actor Network Theory. One thing I took from him was to not get too abstract in how you identify the causes of events you’re describing. He has this line I like: when people are talking about context—for a discovery or whatever—he says in “context, there is no place to park.” There’s no such thing as context, everywhere is local. It’s just the local embedded within larger dynamics.

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There’s always this danger of drifting away from this situated reality of these events. When you look at the history of digital things, even the language is against us. It’s so easy to drift over into the “virtual” and the “cyber.” There’s this fantasy of nowhereness—when it felt like the Internet was somewhere else instead of being right here.

I try to keep one foot firmly in the reality of the situation. Where are the people? What hardware are they using? How are they getting paid? How are they interacting with each other? I find that you can often give a better description without getting imaginary about it. The challenge is that money is already abstract and digital technology is dangerously abstract.

How do you deal with the mountains of troubling politics associated with bitcoin? Where does politics fit in?
One of the things that I became really fascinated by when working on this book was, as you say, the mountains of troubling politics. But, it’s not false modesty to say that I’m not entirely sure how successful that was. I’m trying to use a small group of people to explain the idea of Austrian economics and how that informs this very heterodox philosophy of money and then how that feeds into a couple of different approaches to build digital cash, all of which ultimately informed the development of bitcoin. The challenge is that in some ways I feel like the book is trying to tell a big story through a series of small spaces.

For example, there’s a very small section towards the end of the book that suddenly turns towards Agorism, which is this super out-there libertarian sub-sub-culture that had a huge influence on the Silk Road and dark markets generally.

Tell me more about how this intersects with Silk Road.
There’s another way to describe these different movements that led to bitcoin, which is that the Extropians had a “fellow traveler” relationship with the cypherpunks. A lot of cypherpunks published on the Extropian list. They knew each other. A number of people could consider themselves to be both Extropians and cypherpunks. They shared a lot of the same ideas but the fundamental difference is that for Extropians, the creation of digital cash enabled gray and black markets as a stepping stone towards the breakthrough conditions they sought.

In his magnificent and crazy description of cypherpunk in The Cyphernomicon, Tim May talks about all the different communities that are going to want to adopt these new tools that cypherpunks are developing, including new marketplaces and online reputation systems. One of the groups he identifies are immortalists—people who are pursuing black market medical interventions, drugs that haven’t passed FDA approval, offshore clinics, and so on. They’re working on all kinds of self-administered experiments might kill them or might help them achieve super humanity, but they need to do it outside of the remit of the welfare state. They’re really interested in having encrypted cash and reputational systems and so on. Whereas if follow the cypherpunk thread in another direction it overlaps with a specific libertarian subset called Agorism. That’s where you see the real point of genesis for things like Silk Road and dark markets. The creator and Silk Road identified as an Agorist. In fact, the Agorist flag is gray and black, which are the colors of their favorite markets.

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The idea of Agorism is that by enabling any kind of off-the-books, untracked, and uninspected market, basically any kind of market transaction that the state has not intervened in, every one of those markets is a blow against the state. Every one of those markets is a small move away from the status quo. Agorists believe that the more people who have stake in grey and black markets, the more people who get used to the idea of engaging in all of these secretive off-the-books transactions, the better. And that’s an approach that really has its roots in cypherpunk and in Tim May.

What’s really striking and in some ways very sad is that what was supposed to be a sub-component of the Extropian master plan for human transcendence—digital cash—ended up becoming the main show. I think that if we want to understand the trajectory that ends up at the Silk Road, we need to follow the philosophical project that was fundamentally committed to the collapse of the state as such and that afterwards we would live in space as godlike intelligences.

I’d like to hear your thoughts on contemporary politics—the attacks and infighting that are crippling cryptocurrencies today. What’s troubling me is that these exceptional events appear to now be the norm.
I think bitcoin in particular ended up in a unique situation because it is a technology that is not necessarily all that relevant to money as such—the blockchain—but nonetheless presented itself as money. Indeed, it became a vehicle for speculative investment and did so at a moment of enormous financial and political upheaval.

The blunt answer is that people made the worst mistake you can make in tech, which is to buy into the alpha rollout. You never buy the alpha project—you wait, you let the bugs get worked out, you let more daring/stupid people kick the tires and have it break down a million times. And then, when it’s rock solid, when real applications have emerged, you start to move in.

One of the biggest problems right now is that bitcoin’s pretty dumb. But that doesn’t mean that the longer-term things it unlocks and leads to are dumb. Quite the contrary.

It just means that right now we’re trying to get the basic demo to work, except that people have already built the demo into infrastructure. They’ve tried to take the thing that’s still doing its version of the Blue Screen of Death every couple of days and they’re saying ‘sure, let’s do interbank settlement on this, let’s put your life savings into this.’ That’s been a catastrophe for a lot of people and a lot of institutions.

But one of the things that has been really exciting to me is that the hot air is finally going out. People are starting to listen to the actual computer scientists who are identifying flaws and errors and now we’re starting to see proposals that have been really thought through.

It’s a privilege to be able to watch that transition happen, to be able to witness the big moves take place for a technology that’s still in the very early days of fantasy and hype. Then, to see it transition into a phase where it can become boring, which is the best possible outcome—a new and boring apparatus that can underwrite useful social transformation.

Main image: Kulturprojekte Berlin GmbH, Transmediale.