The importance of privacy, anonymous transactions, cryptographic protection – all these ideas have subsequently been implemented in one form or another in cryptocurrencies. When and how did Cryptography Originate and Develop? Cryptography as a text protection technique arose.
The importance of privacy, anonymous transactions, cryptographic protection – all these ideas have subsequently been implemented in one form or another in cryptocurrencies.
When and How did Cryptography Originate and Develop?
Cryptography as a text protection technique arose along with writing – secret writing methods were known in the ancient civilizations of India, Mesopotamia, and Egypt.
In the first period of the development of cryptography (approximately from the 3rd millennium BC to the 9th century), monoalphabetic ciphers were mainly used, the key principle of which is the replacement of the alphabet of the source text with another alphabet by replacing letters with other characters or letters. Monoalphabetic ciphers were known in India, Sparta, Ancient Greece, and Rome.
In the second period (from the 9th century in the Middle East and from the 15th century in Europe to the beginning of the 20th century), polyalphabetic ciphers (a set of monoalphabetic ciphers used to encrypt the next plaintext character according to a certain rule) became widespread.
In the third period – from the beginning to the middle of the 20th century – the use of polyalphabetic ciphers continued. At the same time, a new communication technology, radio communication, arose and developed. It accelerated mathematical formalization and grammar of transmitted texts and text redundancy.
The problem of strong encryption became urgent during the First World War and became especially acute during the Second World War, since small-sized transmitters and receivers became widespread, allowing belligerents to easily intercept enemy communications. Radio signals poured actively in localized areas became easy to encrypt, decrypt and compare with each other in the development of hacking methods.
The fourth period – from the middle to the 70s of the XX century – was marked by the transition to mathematical cryptography. By that time, mathematical formalization in mathematics and related sciences had become theoretical and general algebra were finally formed; the foundations of cybernetics and the theory of algorithms were laid.
In August 1975, Whit Diffie and Martin Hellman published the article “New Directions in Cryptography”. It became the first paper to publicly discuss modern cryptographic methods. Soon after, another major advancement came with the development of RSA encryption.
How Did the Cypherpunk Movement Start?
As early as 1982, Chaum introduced the blind digital signature method, a public key encryption model. The development made it possible to create a database of people who could remain anonymous, while guaranteeing the accuracy of the information they reported about themselves. Chaum dreamed of digital voting, the process of which could be verified without revealing the identity of the voter, but privacy of digital cash.
Chaum’s ideas inspired a group of cryptographers, hackers and activists. It was they who became known as cypherpunks – members of the movement advocating computer technology as a means of destroying state power and centralized control systems.
One of the ideologists of the movement was an American cryptographer, former leading researcher at Intel Timothy May. In 1987, May met American economist, entrepreneur, and futurist Philip Salin, who founded the American Information Exchange (AMIX), an online data trading platform.
May, on the other hand, did not like the idea of an online market where people could sell each other bits of information for low prices and across borders. He wanted to create a global system that would let anyone send and receive any kind of information anonymously and look like a corporate information system.
May later turned this idea into the BlackNet system, which needed a digital currency that wasn’t backed by the government and the ability to make payments with it that couldn’t be tracked. In 1988, he read “Security Without Identity: The Transaction System That Will Make Big Brother an Antiquated Idea” by David Chaum. In the article, Chaum talked about a system that uses cryptography to hide who the buyer is. May heard about this idea, and it made him want to learn more about public key cryptographic security.
Soon, he realized that this kind of cryptography and network computing could “destroy the structures of social power.”
May wrote “The Crypto-Anarchist Manifesto” in September 1988. It was based on Karl Marx’s Communist Manifesto. It said, “The ghost of crypto anarchy haunts the modern world.” With the help of cryptography, digital currencies, and other decentralized tools, the manifesto says that people will be able to run their lives without the government.
How did the cypherpunk movement influence the emergence of cryptocurrencies?
David Chaum began digital cash in the 1980s. It was a system for anonymous and private systems, and the cash digital money system was called eCash because users’ wallets kept bank money private and secure.
In 1997, British cryptographer Adam Back created Hashcash, an anti-spam mechanism that required a certain amount of computing power to send emails. This made spamming economically unprofitable.
A year later, computer scientist Wei Dai said that money should use a peer-to-peer system. The person who made the system came up with two ideas. The first was to create a protocol where each participant maintains a copy of the database with information about how much funds the user has. The second idea was based on the first one, but it was changed so that not every member of the network kept a copy of the registry. Instead, new currencies were introduced. Registrars and servers, in this case, only users that are network nodes that copies of the registry. Participants in the network made sure to be honest by putting money into a special account that was used to give rewards if there was evidence of dishonesty.
It was the first concept that was subsequently adopted by the creator of Bitcoin Satoshi Nakamoto, where the second turned out to be the basis for what is known today as Proof-of-Stake.
