From children's secret decoder rings to national security-level ciphers, cryptography — the science and study of secret communication — dates back as far as the ancient Egyptians.
Cryptocurrency, in comparison, is a fairly young (and highly specific) application of cryptography, which refers more generally to the practice of algorithmic encryption.
Information is a valuable commodity. Encrypted information has led to the rise and fall of kingdoms, the end of wars and the creation of new and advanced technologies. If there's one thing we know, it's that knowledge is power.
Just as we in Web3 advocate for data sovereignty, personal privacy and asset ownership, historical figures have always sought to keep certain top-secret information secure. Through their advancements came what we now understand to be the future of the internet, and it's a long and fascinating evolution.
As author Simon Singh writes in The Code Book, the ancient Greek historian Herodotus, dubbed "the father of history," describes one of the earliest accounts of secret writing. Herodotus claimed secret writing helped save Greece from being conquered by the Persian leader Xerxes.
According to the tale, Xerxes had spent five years building an army and planning a secret attack on Athens and Sparta. Realizing what was about to happen, Demaratus, a Greek exile, wrote a letter to warn the Spartans of Xerxes' plan to invade. The message was written on a pair of wooden folding tables and covered with wax. Xerxes lost the element of surprise, and on September 23rd, 480 B.C., when the Persians approached the Bay of Salamis, the Greeks were prepared to fight.
Secret writing has since been used by everyone from the Babylonians, to the Egyptians, to Queen Mary of the Scots. In fact, secret writing was enjoyed by many of our favorite authors and poets, including Edgar Allan Poe, who wrote an essay titled, A Few Words on Secret Writing, in which he takes the reader through several accounts of encrypting a message.
Nowadays, we don't have to go to such great lengths as to cover cryptic messages in wax, but we do have ways of making a message unreadable to anyone except for the intended recipient.
There are two branches of cryptography: transposition, and substitution. With transposition, the letters of a message are simply rearranged to create an anagram, a new word or phrase using the same letters as the original. With substitution, each letter of a plaintext message is substituted for another letter. This allows for a plaintext alphabet and a ciphertext alphabet. The message itself can be decrypted with the use of a keyword or phrase. (Maybe you recall the infamous scene in A Christmas Story in which Ralphie, using his secret decoder ring, solves the cryptic message from Little Orphan Annie once the radio announcer shares the secret key.)
Fast forward to the days of modern technology, and one problem still remained in the world of cryptography: In order to send an encrypted message both the sender and receiver would need to share a key — and the only way to distribute the key securely was by meeting in person.
Singh shares, “During the Second World War the German High Command had to distribute the monthly book of day keys to all Enigma operators, which was an enormous logistical problem.” There was no way to share the Key needed to decipher a message through telephone or telegram without the total message being revealed to eavesdroppers.
But fortunately, something changed: In May of 1975 Martin Hellman, a Stanford computer scientist, and Whitfield Diffie, a pioneering cryptographer known as the first cypherpunk, solved the problem. It was the greatest development in the field of cryptography since monoalphabetic substitution. And it was just in time, too: The U.S. Department of Defense was in the process of developing ARPANet, the precursor to the internet, and the two expected more people would be conducting business online, thereby requiring a secure means of communication.
Hellman and Diffie created what is now known as public-key cryptography, where users don’t have to meet each other to exchange the key. The method relied on a one-way function. Each user would have a public key and a private key. The public key could be sent to anyone, but the private key would be kept strictly confidential. A message could then be encrypted with the public key and deciphered with the private key, creating a way for authentication and private-public communication.
Does this sound familiar? It should remind you of your crypto wallet, which has a public address and a private key.
Some consider the fact that public-key cryptography was created outside of the National Security Agency’s domain to be incredible. For the first time, individuals held the tools of digital encryption — it wasn't just for governments and emperors.
Soon, a community formed around the idea of open cryptography and members began meeting up and hosting events. Eventually, the group would call themselves cypherpunks and adopt a motto of fighting for the individual's right to privacy.
Eric Hughes, a mathematician and programmer, published the Cypherpunk Manifesto in 1993, in which he declared that “Cypherpunks are dedicated to building anonymous systems. We are defending our privacy with cryptography, with anonymous mail forwarding systems, with digital signatures, and with electronic money.”
He went on to say, “Cypherpunks deplore regulations on cryptography, for encryption is fundamentally a private act. The act of encryption, in fact, removes information from the public realm. Even laws against cryptography reach only so far as a nation's border and the arm of its violence. Cryptography will ineluctably spread over the whole globe and with it, the anonymous transactions systems that it makes possible.”
The cypherpunk mission was to spread cryptography around the world, as the last free people would be those who could communicate and conduct business privately. They felt that freedom was predicated on privacy, without privacy there would be no freedom. But they weren't the only ones discussing digital privacy rights: In 1981 David Chaum, a cryptographer and computer scientist from Berkley, had published a paper on Untraceable Electronic Mail, Return Addresses, and Digital Pseudonyms. He, too, felt that private communication was a necessary right. Just as it is illegal to read someone else’s paper mail, he argued email and other forms of communication should be secure also. In a second paper titled, Blind Signatures for Untraceable Payments, he addressed concerns about private payment methods while dealing with the risk of criminal use of payment processes. Ultimately he outlined a new kind of cryptocurrency that would allow for an automated payments system with the following three properties:
1. Inability of third parties to identify payee, time, or amount of payments made by an individual
2. Ability for individuals to provide proof of payment, or to determine the identity of the payee under exceptional circumstances
3. Ability to stop the use of payments media reported stolen
Chaum eventually created Digicash, an electronic payment system that used public-key cryptography, and a digital currency called cyberbucks. The idea gained support from libertarians and pro-privacy individuals in favor of a non-governmental currency, but by 1998 Digicash filed for bankruptcy.
Just ten years later, financial disaster hit as The Great Recession brought a global financial crisis marked by a lingering housing market bubble. It was out of this 2008 chaos that a new digital currency was created, one that echoed Chaum’s creation. Just 46 days after the fall of Lehman Brothers, on October 31st, 2008, the Bitcoin whitepaper would be sent to the Cryptography Mailing List. The first line would read, “Bitcoin: A Peer-to-Peer Electronic Cash System,” allowing for online payments to be sent directly from one party to another without the need for a third party or financial institution.
According to the Blockchain Council, Bitcoin uses public-key cryptography in several areas to ensure the integrity of messages created in the protocol, wallet creation and signing of contracts, and digital signatures which allow every transaction to have a different signature dependent on the private key of the user. Bitcoins encryption algorithm is SHA2, or Secure Hash Algorithm 2, called SHA-256, which was first published by the U.S. intelligence community in 2001.
Most people who have used a crypto wallet today have experienced public-key cryptography. For example, when someone signs up for a Metamask wallet they are given a public wallet address, this is a public key that can be shared with anyone and allows the user to send and receive funds. At the same time, they receive a private key, which is usually a set of words unique to their wallet. The private key is not to be shared with anyone as it will automatically provide access to the wallet and everything in it.
With Bitcoin's rise in popularity followed by other cryptocurrencies, it can be easy to forget about the technology that backs them and the rich history of secret writing that came before the use of digital cryptography. The cypherpunks felt public cryptography was a human right, to be shared and used freely outside of centralized control. Offered here was just a brief introduction to that history — the rest of the story is yours to explore.
Decode this secret message (written in binary code, or the language of computers):
Click here to use a free binary-to-text converter.
Carlee is a content writer and copywriter working in the Web3 space. Connect with her on Instagram @carleegodlouski.
This article and all the information in it does not constitute financial advice. If you don’t want to invest money or time in Web3, you don’t have to. As always: Do your own research.
