Free True Names and the Opening of the Cyberspace Frontier by Vernor Vinge Page B

successful in stamping out strong cryptography use. This lesser role for the formal legal system is especially likely as the Net becomes increasingly global, with even more tools for anonymous or pseudonymous interaction. Tools to make digital signatures and digital time-stamping more common will help to build what Nick Szabo calls “smart contracts.” Escrow services—even anonymous or pseudonymous ones—will make it possible to have “completion bonds” for cyberspace activities.
    Individuals interacting in cyberspace will generally have to be more competent about arranging their fiduciary and contractual relationships, and less reliant on having government offices and agents bail them out of foolish actions. Caveat emptor. Of course, they are always free to contract to have a “nanny” screen their interactions and tell them what to do. They could even call this their “government.” They just can’t force others to obey their nanny.
    Crypto Anarchy
    â€œThe Net is an anarchy.” This truism is the core of crypto anarchy. No central control, no ruler, no leader (except by example, reputation), no “laws.” No single nation controls the Net, no administrative body sets policy. The Ayatollah in Iran is as powerless to stop a newsgroup—alt.wanted.moslem.women or alt.wanted.moslem.gay come to mind—he doesn’t like as the President of France is as powerless to stop, say, abuse of the French in soc.culture.french. Likewise, the CIA can’t stop newsgroups, or sites, or Web pages, that give away their secrets. At least not in terms of the Net itself. What non-Net steps might be taken is left as an exercise for the paranoid and the cautious.
    This essential anarchy is much more common than many think. Anarchy—the absence of a ruler telling one what to do—is common in many walks of life: choice of books to read, movies to see, friends to socialize with, etc. Anarchy does not mean complete freedom—one can, after all, only read the books that someone has written and had published—but it does mean freedom from external coercion. And anarchy does not mean an absence of local hierarchies, or an absence of rules. Groups outside the direct control of local governmental authorities may still have leaders, rulers, club presidents, or elected bodies. Many will not, though.
    Anarchy as a concept, though, has been tainted by other associations. The anarchy here is not the anarchy of popular conception—lawlessness, disorder, chaos. Nor is it the bomb-throwing anarchy of the nineteenth-century “black” anarchists, usually associated with Russia and labor movements. Nor is it the black flag anarcho-syndicalism of leftist writers such as Proudhon and Goldstein. Rather, the anarchy being spoken of here is the anarchy of “absence of government” (literally, “an arch,” without a chief or head). It’s the same anarchy of “anarcho-capitalism,” the libertarian free market ideology that promotes voluntary, uncoerced economic transactions. “Crypto anarchy” is a pun on crypto, meaning “hidden,” on the use of “crypto” in combination with political views (as in Gore Vidal’s famous charge to William F. Buckley: “You crypto fascist!”), and of course because the technology of crypto makes this form of anarchy possible. The first presentation of this was in my 1988 “Crypto Anarchist Manifesto,” whimsically patterned after another famous manifesto.
    Politically, virtual communities outside the scope of local governmental control may present problems of law enforcement and tax collection. Avoidance of coerced transactions can mean avoidance of taxes, of laws that dictate to whom one can sell and to whom one can’t, and so forth. It is likely that many will be unhappy that some are using cryptography to avoid laws designed to control behavior.
    National borders are