With the recent announcement of the Metaverse and Facebook’s transition to Meta, more people than ever have migrated to virtual environments and competed to participate in their own virtual domain. As virtual reality becomes more common, the convergence of cryptocurrencies such as Bitcoin with cyberspace itself will be as common as a traditional fiat banknote. Bitcoin is the first digital cryptocurrency to be launched. Although many similar technologies based on digital coins and virtual eCash existed before Bitcoin, there were no official digital cryptocurrencies until the launch of Bitcoin in August 2008. It is a digital currency that works similarly to traditional currency without a centralized owner or regulator. Cryptocurrencies are known as decentralized digital currencies, providing more flexibility and opportunities for those who wish to invest in cryptocurrency, even those who are not already wealthy or financially privileged.
The Rise of Cryptocurrency Cyberspace
The rise of cryptocurrency may appear as a new phenomenon to the general public, but it is deeply rooted in numerous libertarian and cypherpunk philosophies that have been discussed for decades, starting all the way back to the early ’90s. Eric Hughes, the author of A Cypherpunk’s Manifesto, originally released his manifesto on the use of cryptography in the future to provide privacy to individuals in 1993. Today, cryptography is a foundational element of Bitcoin and other cryptocurrencies on the market. Using cryptocurrency requires a private and public key pair, providing complete security and total control to the user who is managing his or her own digital cryptocurrency wallet. Using a peer-to-peer network is another important factor involved in cryptocurrency, which was a common discussion had by those who supported the cypherpunk and cryptography movement’s origin in the 1990s. Going back even further than A Cypherpunk’s Manifesto, David Burnham, a New York Times journalist, also penned a book in 1983, The Rise of The Computer State, regarding the rise of unprecedented surveillance and potential privacy issues that were likely to arise in the near future.
Those who subscribed to the original cypherpunk ideology were determined to find methods of implementing cryptography to increase security and privacy for individual freedom and liberty, especially as financial decisions and/or currency itself transitioned into the digital realm.
The Origin of the Word Cypherpunk
While the word cypherpunk did not appear in any traditional or official dictionaries until it was printed in the 2006 edition of the Oxford English Dictionary, it can be traced all the way back to 1992.
The first digital receipt of Eric Hughes using the term cypherpunk can be traced back to an email sent on September 21, 1992, by Eric Hughes. The same year, the official Cypherpunks Mailing List was launched. The list was commonly referred to as simply, The List. Its ideas were eventually used to help in the process of building and launching Bitcoin. In 1992, activist Timothy May, founder of The Crypto Anarchist Manifesto, coined the manifesto itself and introduced it to the public during the September 1992 founding meeting of Cypherpunks. It dates even further back to the middle of 1988 when it was also distributed to underground techno-anarchists during the Hackers Conference as well as the Crypto ’88 conference.
Those who were a part of the original cypherpunk movement understood the implications of an increasingly invasive Big Brother, especially with the advent of computer technologies and online communications.
The Goals of Decentralized Currencies
Traditionally, fiat currency is centralized and controlled by a few bankers, families, and organizations. With the advent of a decentralized currency platform such as cryptocurrency, the options have become virtually endless for anyone who has an interest in investing in cryptocurrency and getting involved with the cryptocurrency community themselves.
Some of the most well-known goals of decentralizing currency include:
- Increased privacy and security: Using private and public keys provides individuals with increased privacy and security when it comes to managing their finances. Additionally, the use of private and public keys makes it increasingly difficult for hackers, scammers, and thieves to gain access to your individual account.
- Increased transparency: The use of blockchain technology is one of the best ways to increase transparency with any currency. Blockchain technologies make it easier than ever to keep track of all financial transactions with an automatically generated receipt and a string of numbers to help track any and all transactions as needed.
- Provide increased stability: This may seem counterintuitive as cryptocurrencies are much different than fiat currencies, but they have the potential to provide increased stability for individuals who may not otherwise have access to a bank or a trustworthy financial institution near them. Those who do not have access to traditional banks and financial institutions can greatly benefit from investing in cryptocurrencies such as Bitcoin and other relatively stable and/or reliable cryptocurrencies on the market.
The Benefits of Transitioning to Cryptocurrency
Transitioning to the use of cryptocurrency is not an easy step to take for those who are resistant or hesitant to the idea of massive change, especially when it comes to their money and finances. Understanding just a few of the benefits that transitioning to cryptocurrency has to offer is essential as more people than ever continue their migration into the digital sphere.
- Increased control over inflation: The use of decentralized currencies helps to mitigate and eliminate the risk of inflation, especially rapid inflation that can quickly decimate a country’s GDP and/or economy.
- Expand into unbanked populations: Using a decentralized cryptocurrency is optimal for those who do not have access to financial institutions or trusted banks in their area(s) or region(s). Expanding a currency’s reach into areas where individuals are still unbanked is a way to also maximize the overall value of the cryptocurrency coin itself.
- Insulation: Decentralized currencies can also help to protect consumers from economic collapse, banking failures, and even from aggressive bank policies that are not consumer-friendly. Additionally, the use of cryptocurrency also eliminates traditional banking fees.
- Avoid tariff issues: Because decentralized cryptocurrencies can be accessed, spent, obtained, and transferred from just about any location where your digital wallet is available and accessible, consumers become immune to tariffs and other standard requirements that may be necessary with a fiat currency.
- Borderless payments: Cryptocurrencies are becoming increasingly attractive to those who conduct business on an international scale, as cryptocurrencies provide the opportunity to make international payments with ease. Because borders are nonexistent when completing a transaction with decentralized currencies such as Bitcoin, those conducting business internationally can do so with an entirely seamless experience.
- Privacy and security: One of the most important aspects of digital cryptocurrencies is the increased security and privacy that has been introduced. With the use of both a private and public key, individuals have more control than ever over their online and digital cryptocurrency wallets. The use of public and private keys in conjunction with blockchain technology helps to significantly increase the overall security and protection an individual has whenever they are purchasing, sending, or selling cryptocurrency using their digital wallet(s).
The Growing Popularity of Cryptocurrencies
Bitcoin was once thought of as a frivolous endeavour, even by those who were once considered the pioneers of tech and the internet frontier. However, today, Bitcoin is estimated to be worth more than $1.03 trillion as of December of 2021.
When Bitcoin first began trading, it was traded at $0.0008 to $0.08 per coin. Bitcoin first became available to the public in July of 2010. Today, just one Bitcoin costs upwards of $49,000 USD. Bitcoin is now among thousands of alternative coins, also commonly referred to as altcoins in the cryptocurrency realm today. With thousands of digital cryptocurrencies available worth trillions of dollars, it is no surprise that cyberspace is becoming prime real estate for investors, both old and new. While Bitcoin itself has only recently become popular and mainstream, the concept of cryptocurrency and decentralized money goes much further back, well beyond the years of social media and the upcoming Metaverse.
As cryptocurrencies become more popular and commonplace, it is likely that more will begin to understand the deeper ideological beliefs behind the original movement towards a decentralized currency. Understanding the origins of cryptocurrency and the reasoning behind the libertarian cypherpunk movement is essential to truly resonate with the original vision of the movement’s founding activists.