The socio-political history of DAO: From Cypherpunks to Web3

Original Title: 《A POLITICAL HISTORY OF DAOS》

Original Author: Kelsie Nabben, Dewei@DAOrayaki.org

Compiled by: DAOrayaki Community

The emergence of DAOs as a product of social technology development has always been an interesting and important topic. The DAOrayaki decentralized editorial committee curates "The Origins of DAOs," with previous articles such as 《DAOrayaki ｜The Development History of DAO and Organizational Management》 and 《DAOrayaki ｜The Prehistory of DAO - Cooperatives, Gaming Guilds, and the Upcoming Web》. Thanks to the work of Kelsie Nabben, a researcher at RMIT University Blockchain Innovation Center, this article is published on FWB, and the DAOrayaki community has translated it.

The story of the Cypherpunks mailing list is that of an unassuming email server from the 90s, yet it transformed decentralized technology into a new form of human organization.

The Cypherpunks mailing list was a little-known email server from the 90s, initiated by three Silicon Valley misfits interested in digital privacy. In 1992, Eric Hughes, a mathematician and computer programmer in his twenties, had just returned to the Bay Area after working at a digital cash startup in Europe and was considering applying to graduate school. Timothy C. May, a 34-year-old electrical engineer with strong libertarian leanings, had recently left his senior scientist position at Intel to live off stock options, allowing him to pursue his interests: "anarchism," science fiction writing, and rifles.

Hughes and May met at a gathering hosted by John Gilmore, a 37-year-old computer programmer who later became a privacy activist and founded a digital rights advocacy organization called the Electronic Frontier Foundation. In September 1992, Hughes, May, and Gilmore co-founded the Cypherpunks mailing list, hoping to create a space for privacy "anarchists, utopians, and technologists" to discuss anonymous online networks, politics, and philosophy.

Although it was merely a passion project, peaking at 700 members and about 30 messages a day, this early digital community ultimately had a profound impact on the crypto world as we know it. Numerous academic studies suggest that the Cypherpunks mailing list incubated ideas that eventually led to the creation of Bitcoin, the first fully functional peer-to-peer encrypted currency network. The individual or group known as "Satoshi Nakamoto," who invented Bitcoin, is also believed to be one of the members of this list.

The Cypherpunks were a group of cryptographers, hippies, computer programmers, hackers, activists, and philosophers focused on the profound changes that the invention of cyberspace would bring to the nature of our economic and social systems. They were united by a belief that individuals should be able to engage in private matters without interference from the state and firmly believed that this freedom could be achieved through the use of digital encryption technologies that allowed people to communicate without being monitored. Hughes wrote in the "Cypherpunk Manifesto": "Privacy is necessary for an open society in the electronic age," which is the founding document of the organization.

"Computer technology is about to provide individuals and groups with the ability to communicate and interact in complete anonymity. Two people can exchange information, conduct business, and negotiate electronic contracts without knowing each other's real names or legal identities. Interactions on the network will be untraceable… These developments will completely change the nature of government regulation, the ability to tax and control economic interactions, and the confidentiality of information, even altering the nature of trust and reputation." - Timothy C. May, "The Crypto Anarchist Manifesto," 1988

To protect individual privacy from the threats of state and corporate surveillance, the Cypherpunks pursued the development of decentralized, cryptographically secure digital infrastructure. At personal gatherings in the Bay Area, they used role-playing games to simulate private online networks free from external interference. For example, many conversations on the mailing list involved developing "forwarding mail" experiments, tools that allowed people to send anonymous types of email without anyone being able to identify the sender.

The primary weapon of the Cypherpunks against the threats of corporate and government surveillance was public key cryptography, a form of encryption that uses mathematical algorithms to enable secure communication between parties over insecure channels. The author of this article, as a social scientist and researcher at RMIT University, has been analyzing how the relatively niche Cypherpunk countercultural movement laid the groundwork for self-organization through public blockchain-based infrastructure, with these innovative contexts tracing back to the emergence of distributed computing in the 1960s and breakthroughs in public key cryptography in the 1970s and 80s.

In other words, the author's research explores how the Cypherpunks set the stage for the world of cryptocurrency, Web3, and DAOs as we know it today—not merely because of the technological innovations they sparked. They combined the ideas of distributed computing architecture and public key cryptography with an emphasis on private digital networks—perhaps their greatest contribution to Web3—as a means to advance their self-organizational political goals, demonstrating that cryptography is a sociopolitical phenomenon rather than just a technical domain.

DAOs, after all, are groups of people coming together to form self-governing communities using blockchain technology to make decisions. If you want to know how this distributed form of digital human organization came to be, the history of the Cypherpunks is a great place to start.

The Prehistory of Cypherpunks

To understand the innovations of the Cypherpunks, it is necessary to trace back to the dawn of distributed computing and public key cryptography, tools that the Cypherpunks would combine with their political vision.

In the 1960s, government-funded researchers developed distributed computing, a method of distributing computer hardware across multiple geographic locations. By "decentralizing" physical computing units in this way, Cold War intelligence and national security agencies hoped to create a "survivable" communication network capable of withstanding attacks, allowing government officials to continue communicating even if critical infrastructure was compromised.

The idea of using distributed hardware and networks to create "resilient" communication largely stemmed from engineer Paul Baran, who wrote 13 papers on "distributed communications" while working at the government-funded think tank RAND Corporation in the 1960s. His research included some breakthroughs still relevant to public, decentralized technologies today, including "message blocks" (a component of blockchain technology) and advocating for private digital networks through cryptography. According to journalist Katie Hafner, Baran stated that establishing a more resilient communication infrastructure was "the most important work I could do to improve society."

"Most of the technology needed to provide the required protection already exists in the form of contemporary cryptography and its related disciplines." - Whitfield Diffie, in a message to the Cypherpunks mailing list, 1993

Public key cryptography, or the use of encryption technology to protect information from third-party access, was discovered by researchers at the UK Government Communications Headquarters (GCHQ) in 1973 and independently discovered by cryptographers Whitfield Diffie, Martin Hellman, and Ralph Merkle in 1978. The GCHQ cryptographers created an advanced secret encryption scheme known as "non-secret encryption" and eventually shared it with the US National Security Agency.

As encryption was viewed as a national security tool, research and access to encryption technology were highly restricted. For example, the NSA monitored all patent applications related to cryptography and legally classified cryptographic patents deemed too powerful for public use. In 1975, the US government also introduced the Data Encryption Standard, a national encryption standard for public and commercial use. This was just one of a series of regulations limiting citizens' access to cryptographic knowledge and tools, part of a decades-long data privacy struggle known as the "crypto wars."

However, in 1976, researchers Whitfield Diffie and Martin Hellman published a paper titled "New Directions in Cryptography," introducing the world to public key cryptography (ironically funded by the US National Science Foundation). According to journalist Steven Levy, Diffie was frustrated by the secrecy surrounding a well-developed technology and believed in a "decentralized power perspective," where individuals could use encryption tools to protect their personal data privacy.

Cryptography carries its own infrastructure politics, imagination, and possibilities at the intersection of state and individual. Digital encryption is a fundamental political security technology and a battleground for privacy, freedom, and democracy, which scholar Linda Monsees refers to as "cryptopolitics." In the later stages of his career, Diffie became one of many public key cryptographers who appeared on the Cypherpunks mailing list. As the digital age approached, many of them became deeply involved in efforts to influence and shape public policy debates surrounding personal and commercial security.

By the late 1980s, the groundwork for modern-day cryptocurrency was being laid. One notable figure was Nick Szabo, who is best known as the inventor of the term "smart contract" and the founder of the ecological cash project "Bit Gold." Another was Zooko Wilcox, co-founder of the future privacy cryptocurrency Zcash. Before moving back to the US and co-founding the Cypherpunks mailing list, Eric Hughes even worked briefly as a computer programmer at DigiCash, although he decided he disliked the company's internal politics and overall direction (DigiCash went bankrupt in 1998 due to vision, personality conflicts, and failed business deals).

Chaum's electronic currency was designed with a system involving centralized currency issuance, transaction confirmation, and settlement. In other words, it was not much different from the banking systems of nation-states, with the system itself acting as a trusted intermediary between users. Users' privacy was easily compromised by banking interfaces, and DigiCash lacked censorship resistance. While Chaum valued privacy, he believed the best way for cryptography to gain widespread adoption was to integrate it with existing financial systems. The Cypherpunks—among them a few former DigiCash employees, including Hughes—disagreed.

From Cryptographers to Cypherpunks (1990s-2008)

By 1994, the Cypherpunks mailing list had grown to hundreds of members. Being a Cypherpunk provided a sense of belonging, a consistency of purpose, and a shared identity that only the internet could offer. It was a melting pot of dynamic idea exchange, with many possessing the technical acumen and hacking skills to embody these ideas in real life.

Conversations on the mailing list often returned to the potential of cryptography to fundamentally change society.

Cypherpunks were interested in utilizing encryption tools to establish anonymous communication networks and markets that were free from government censorship or interference. In other words, they viewed these tools as components of infrastructure that could allow people to create alternatives to modern nation-state structures and serve as a means of self-organization.

Cypherpunks hoped these technologies would enable people to inhabit "temporary autonomous zones"—creating temporary spaces in the physical world or cyberspace that evaded the sociopolitical strategies of formal control systems, as defined by anarchist writer and future mailing list member Peter Lamborn Wilson, also known as Hakim Bey. As early as 2020, the American public tasted the sweetness of these ideas by creating anarchist encampments, such as Seattle's "Capitol Hill Autonomous Zone," where activists occupied six city blocks during protests over Black Lives Matter. Today, the blockchain community refers to the digital manifestation of this political theory as "decentralized autonomous organizations" and "network states." It was the Cypherpunks who pointed out the developmental path of these ideas in the context of cyberspace.

Naturally, this political theory of autonomous states generated deep interest in the liberating potential of non-state, non-centralized currencies. Drawing inspiration from the democratic spirit of public key cryptographers and Chaum's work on blind signatures, private digital cash, and electronic remailers, the Cypherpunks documented various attempts to establish electronic token networks on their mailing list. This included "e-gold" in 1996; the anti-spam proof-of-work algorithm Hashcash by Blockstream founder Adam Back in 1997; Wei Dai's anonymous proof-of-stake electronic cash network b-money in 1998; and Nick Szabo's proof-of-work encrypted hash string Bit Gold proposed in 2005, which foreshadowed the architecture of the Bitcoin blockchain.

In 2008, a developer or group of developers using the pseudonym Satoshi Nakamoto published a white paper on the Cryptographers mailing list, a branch of the Cypherpunks mailing list. The white paper proposed the concept of Bitcoin, a "peer-to-peer electronic cash" that represented the first public, permissionless, cryptographically secure peer-to-peer protocol. Based on the ideas incorporated into Bitcoin, scholars and members of the cryptography community sent out a message: the January 2009 headline of The Times read: "Chancellor on brink of second bailout for banks." This political statement about the global financial crisis and the failure of nation-state banks reminded us of Bitcoin's origins. It was not merely a currency; it was a tool in a larger project to create decentralized economic, political, and organizational structures in society.

By the early 21st century, after years of intense exchanges, the Cypherpunks mailing list began to collapse under the pressure of its internal politics. While contributors continued to write articles about privacy and encryption technology, the increasing noise, spam, and infighting affected the atmosphere. Some participants objected to May's political views, as he increasingly expressed violent and racist rhetoric in the name of libertarianism. May eventually left the mailing list, and the original conversations among Cypherpunks nearly disappeared. Although the server still exists today, those interesting individuals with a strong interest in exchanging cryptography-based software and building things have moved on. However, many archives of the mailing list remain available.

Ultimately, the most enduring contribution of the Cypherpunks to the development of public, decentralized blockchain technology is the idea that social infrastructure and political decentralization can be achieved through technology. Social scientist Lana Swartz describes Bitcoin as "a theory of a larger social order" and a challenge to it, a technology that has the potential to reimagine the nature of currency and, in the process, change society and culture.

Not all of the original Cypherpunks agreed with this: for example, Hal Finney, who was also a member of a neighboring mailing list called Extropians, wrote, "We need to win politically, not technically, to protect our privacy." However, it is certain that the conceptual framework established by Bitcoin itself has also evolved over the past 13 years, providing a wealth of information for further research and development in the fields of cryptographic security and decentralized tools and infrastructure. Like Bitcoin itself, these tools are shaped and formed according to the personal, political, and ideological concerns of the people who create and use them.

From Cypherpunks to Web3

The three historical eras I describe in this article—distributed computing, public key cryptography, and the Cypherpunk subculture—show how decentralized technology has evolved from a computing architecture developed by the government into a foundation for a political philosophy advocating the creation of alternatives to existing social and economic infrastructures. Understanding where we come from allows us to grasp the broader social aspirations and capabilities of these tools in the hands of communities using them today. It reminds us that at the core of decentralized technology is a social and political phenomenon.

However, it was the Cypherpunks who proposed a somewhat radical idea: that distributed, encrypted network technologies could be used to facilitate forms of self-organization representing alternatives to nation-state structures. This decentralized sociological theory is grounded in political purposes, where politics is "freedom" (at least in the sense of cyber-libertarianism, which posits that digital media technologies can and should constitute a space for individual freedom), and the means are technology.

The idea of linking decentralized technological principles with a sociological theory of political decentralization continues to inform the public blockchain community today, from projects like 1Hive, which aims to establish its own open-source software free from external interference or coercion, to DoraHacks and Gitcoin DAO, which allocate millions of dollars in crowdfunding to support the development of open-source projects as "public goods" accessible for free. In 2013, before the idea of blockchain-based DAOs emerged, Dan Larimer, co-founder of the Bitshares, Steem, and EOS blockchains, described Bitcoin as a "decentralized autonomous corporation" (DAC), likening currency holders to shareholders of an organization that generates income by providing services in the free market.

Five days later, a young blogger at Bitcoin Magazine, Vitalik Buterin, responded to Larimer's statement, pointing out that a corporation is merely "a collection of people and contracts that interact personally and control property through a legal system, while a decentralized organization involves a group of humans interacting with each other according to protocols specified in code and enforced on the blockchain," Buterin wrote in 2014.

Revisiting our origins invites us to consider what it means to be part of many DAOs today, such as Friends With Benefits. Some DAOs want to operate investment clubs, while others seek to transcend a hyper-financialized world and find other interesting, creative, and social uses for cryptography and cryptocurrency. However, like the mailing list, these new forms of human organization offer us something increasingly difficult to obtain in today's heavily monitored internet.