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The story of the first war of the crypto world

Years before digital currencies and blockchain technology emerged as they are today, there were groups fighting tooth and nail to advance encryption to preserve privacy and uncensored freedom online. The story of this fight goes back to the time when the Internet had just emerged. A fight that became known as the first crypto war. Of course, this was not the end of the story; Years later we saw another fight, which is called the second crypto war.

In this note, which is a translation of an article written by Ivan Cryptoslav on the Coin Market Cap website publish has done, you are reading the fascinating story of the first crypto battle. We will publish the second part of this article soon.

The beginning of the Internet and the battle over cryptography

In the early days of the Internet, there was a silent battle going on at its foundational layers; A struggle that laid the foundation for today’s digital currency industry. What formed the core of this struggle was cryptography; Something that contradicted the control over the nascent digital space of that time. This conflict started The First Crypto War.

The first crypto war was between groups that had no common history: a group of brilliant mathematicians, committed cypherpunks, and hardened government agents. All of them were competing for the power that would shape the future of the online world.

Now the question is, how did this critical period in digital history begin, and what is the importance of examining it after all this time for today’s digital currency landscape?

To answer this question, we need to examine the dramatic events and key players that played an important role in the beginning of that era and in laying the foundations of today’s digital currency landscape.

The main players in the first crypto war

In the early 1990s, cryptography made significant progress and attracted much attention. Some groups, such as cypherpunks and civil liberties advocates, wanted to use encryption to protect privacy and freedom online.

However, the US government was concerned that this process might allow criminals and terrorists to carry out their criminal activities away from the eyes of the authorities and without fear of being caught. Officials feared that unsupervised use of encryption would make it easier for criminal and terrorist activities.

The main actors and factions in this fight for privacy were:

1. United States government

In those years, Bill Clinton was the president of the United States. The Clinton administration and intelligence agencies such as the National Security Agency (NSA) have made significant efforts to gain more control over encryption technology and surveillance capabilities in order to keep people safe and fight criminal activity.

2. Privacy advocates

Civil liberties organizations, such as the Electronic Frontier Foundation (EFF) and the American Civil Liberties Union (ACLU), have criticized government efforts to restrict encryption as an infringement on individual liberties and privacy. They worked as hard as they could to promote the use of encryption to secure these rights in the digital realm.

3. Researchers and fans of cryptography and cypherpunks

Pioneers like Phil Zimmermann were instrumental in promoting the use of encryption and opposing government restrictions. The cypherpunks were a loose group of cryptographers, technologists, and activists who championed the power of cryptography to protect civil liberties, privacy, and promote free speech.

The emergence of acceptable privacy and the beginning of the struggle of cypherpunks

Phil Zimmerman, creator of the concept of Pretty Good Privacy, says:

Only if privacy is illegal [همان] Lawbreakers will have privacy.

Zimmerman’s point is that, in any case, criminals maintain their privacy. Meanwhile, the government will only violate the privacy of ordinary people.

PGP software design

When the World Wide Web became public in 1991 and became accessible to the general public, it quickly became clear that secure digital communications were essential to protecting people’s privacy.

In response to this growing need, pro-privacy programmer Phil Zimmerman designed PGP in 1991. In fact, what he meant by “pretty good” was that there would certainly not be complete privacy; Therefore, it can be adequately protected.

PGP software was the first universal encryption software designed to secure email communications. The software combines symmetric key cryptography and public key cryptography, allowing users to securely exchange their encrypted messages using a public key and private key pair.

The launch of the cypherpunk movement

The design of this groundbreaking software attracted the attention of idealistic cypherpunks. Founded in 1992, the cypherpunk group quickly became a powerful force in the battle for digital privacy.

The founders of this group, Eric Hughes, Timothy C. May (Timothy C. May) and John Gilmore (John Gilmore). They were inspired by David Chaum’s 1985 paper, Security Without Identification: Transaction Systems to Eliminate Big Brother, which illustrated the potential of using cryptography to protect individual privacy in the digital age.

Cypherpunks pursued their goal through collaboration and innovation. They launched the “Cypherpunks mailing list” in September 1992, which became a hub for exchanging ideas, discussing privacy concerns, and developing new cryptographic tools.

Among the cryptographic advancements that this group made famous was Adam Beck’s Hashcash system. HashCash was a proof-of-work system designed to combat spam emails.

Its mechanism is that before sending a message, it is necessary to do a certain amount of computational work. What does this system remind you of? That’s right, Bitcoin. This concept later contributed significantly to the design of the king of digital currencies, Bitcoin.

The cypherpunks who participated in this project included Hal Finney, Wee Dye, Nick Sabo, Craig Wright, Zooko Wilcox-O’Hearn and Satoshi Nakamoto himself.

Eric Hughes, one of the two founders of the cypherpunk group says:

Privacy means being able to reveal our identity to the world as we choose.

US government countermeasures

The efforts of this group gained more momentum with the presence of influential figures who helped their movement. Julian Assange, who later founded WikiLeaks, joined the community in the mid-1990s.

Later that decade, he helped develop the Rubberhose tool, an encryption tool for protecting sensitive data. Rubber hoses were particularly useful in cases where authorities were forcing individuals to divulge data.

During this period, government agencies raised concerns about further expanding the concept of encryption and making it stronger. In 1993, in response to Zimmerman’s PGP software, the US government filed a case against him and opened a criminal investigation against him.

In that case, the charge of violation of regulatory laws was mentioned. Although the case was eventually dropped in 1996, it marked the beginning of tensions between crypto advocates and the authorities.

Despite opposition from law enforcement and corporations, cypherpunks maintained their commitment to promoting strong and accessible encryption. Their achievements enabled the widespread use of encryption and laid the groundwork for modern privacy protection tools. All of their efforts were made to ensure that digital privacy remains a priority as the Internet continues to expand.

The controversial story of Clipper Chip

When cypherpunks’ encryption tools and PGP privacy software gained traction in the early 1990s, the US government was concerned about the potential implications of the widespread use of cryptography. To solve this problem and counter the digital privacy movement led by cypherpunks and PGP advocates, the government took countermeasures that became controversial.

In 1993, the Clinton administration introduced a chip called the Clipper Chip as a hardware encryption device for telecommunications systems. The chip was ostensibly designed to secure telephone communications, but it required a private key that was in the hands of government agencies, and with the help of which they could decrypt and access any encrypted communications with the chip.

Under this plan, law enforcement and intelligence agencies were allowed to easily obtain and control the keys to decrypt communications.

Public opposition and criticism

Clipper Chip quickly faced widespread public opposition and criticism from privacy advocates, civil liberties organizations, and technologists. Many argued that the chip was dangerous and would allow the government to aggressively monitor people’s communications and violate citizens’ privacy rights.

Concerns about it increased when, in 1994, a researcher named Matt Blaze discovered a vulnerability in the Clipper chip that completely called the system’s security claims into question.

The government tried to convince telecommunications companies, manufacturers and users to use that chip. For example, they launched a program called “Clipper Chip for Business” and tried to encourage manufacturers of devices equipped with Clipper Chip by giving them incentives.

They also tried to attract them by influencing large communication companies to implement this technology. However, these efforts met with strong resistance and were ultimately ignored.

The role of PGP and cypherpunks in the battle against Clipper Chip

The widespread adoption of PGP and the efforts of cypherpunks played an important role in challenging the legitimacy and necessity of clipper chips. By providing a strong and practical encryption solution that was freely available to the public, PGP was introduced as an alternative to the government-controlled Clipper Chip solution.

To raise public awareness and support movements opposing the use of Clipper Chips, cypherpunks and privacy advocates organized protests, online debates, and petitions that objectively demonstrated the potential dangers of the technology.

Prominent tech influencers wrote their opinions and participated in the debates, emphasizing the importance of encryption to protect civil liberties and protect the right to privacy.

The efforts of these activists and the ever-growing public backlash contributed to the failure of the Clipper Chip project. Finally, in 1996, the US government officially withdrew its support for the Clipper Chip, ending one of the most controversial chapters in the history of the first crypto war.

However, the original war remained in force. The battle for privacy and encryption still rages on, shaping the modern landscape of cryptocurrencies and privacy-focused technologies.

The lasting impact of the first crypto war

Here we come to the most important part of this story; What was the effect of this full-scale struggle and what is its importance.

The birth of modern privacy technologies

Over time, the active presence of cypherpunks decreased and there was no longer news of them as in the past. However, their contribution to privacy debates is still felt today.

The principles they believed in were reflected in the privacy protection and digital rights movements. Furthermore, it was their advocacy of decentralization and privacy that served as the foundations for blockchain technology and cryptocurrencies such as Bitcoin, Monero, and ZCash, sparking the first revolution in the digital finance landscape.

Steven Levy, author of Crypto: How Coding Revolutionaries Defeated the Government, rightly says:

Cypherpunks are a fading force, but a legacy of transformative technologies. [اخلال‌گر در سیستم مالی سنتی] And they have left an uncompromising commitment to privacy.

The lasting legacy of the crypto war

The lessons we learn from the Clipper Chip affair and the debate surrounding the balance between protecting personal privacy and national security will help shape the broader public debate about that balance.

For example, the current debates about pervasive encryption and government surveillance are a testament to how lasting the impact of the first crypto war was. Encryption has become an essential aspect of securing digital communications and online transactions today.

The cypherpunk movement inspires activists and people who care about privacy and freedom online. This shows that the fight for these two essential concepts that started with the first crypto war is still important.


In this article, we talked about the first crypto war. We saw that this struggle marked the beginning of a defining period that shaped digital privacy, the role of encryption, and the need to balance individual rights with government surveillance.

Cypherpunks, activists, and technologists played an important role in this struggle, whose lasting impact is still felt today. However, the end of the first crypto war was not the end of the struggle. Years later, the second crypto war emerged. If you liked this article, we invite you to read the second part of this story titled “The Second Crypto War”.

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