I found this book to be a useful predecessor work to the key current books on Bitcoin (Bitcoin Standard, Bitcoin Billionaires, Digital Gold). It is a readable history of the fundamental cryptography principles that Bitcoin was later built on, and there is some brief discussion of David Chaum's Digicash and other examples some of the proto-Bitcoin moneys. Thus it's not a central work for understanding Bitcoin, but it is a central work to understand the friction between governments and the wide dissemination of cryptographic technology.
You'll see striking examples of bravery among academic and scientific institutions that fought against control and censorship from the NSA as they discovered and explored cryptographic techniques. This strikes the reader as a sharp contrast to the rather cowardly and complicit behavior seen today among academic and scientific institutions in the face of government control and censorship.
It's also striking to the reader to see the absolute incompetence at the NSA failing to see implications of Moore's law in breaking codes, failing to understand consumer-targeted software products like spreadsheets that would require cryptography in order to be useful, and failing to foresee the results of their own self-conflicting directives and a lack of a unified policy on cryptography. It is a classic example of a powerful, monolithic organization riddled with arrogance, obliviousness and a "not invented here" mentality.
There's an excellent chapter on Phil Zimmerman and his program Pretty Good Privacy, which brought cryptography and privacy to the masses. And it's kind of sad but also hilarious to see Joe Biden show up and fuck things up by putting language (later withdrawn after a firestorm of controversy) into a 1991 Senate bill that devastated privacy rights for American citizens. As Obama famously said "Don't underestimate Joe's ability to fuck things up." This famous bill was what drove Zimmerman to release PGP to the world. For free. And with a famous motto in the program's comments: "When crypto is outlawed, only outlaws will have crypto."
Notes:
* Useful discussion of the cypherpunk movement and its ideological background, of Digicash and of David Chaum's prescient view on future risks to our privacy in an increasingly authoritarian and repressive world.
* The "dining cryptographers" problem is an elegant way to understand the problems behind a secure and private digital money.
* Chaum is an interesting guy: he was motivated by his advisor trying to dissuade him from pursuing his dissertation topic. Ultimately, he dedicated his dissertation to that advisor, thanking him for the motivation.
* Note the arrogance and panic in the NSA at the growth of public/open source cryptography. All "not invented here" and obliviousness: "We're the only cryptographers!" Sadly, Justice and the FBI were even more oblivious to the implications of open source cryptography.
* Disturbing to see the Clinton administration, including Al Gore, manipulated by the FBI and the NSA into approving the use of a secret chip/key escrow system that would have savaged individual privacy rights. Worse, this solution had a glaring flaw that made it easy to subvert, further embarrassing the USA's central government. Big Brother couldn't even correctly write its own snooping program.
* The behavior of the NSA as well as the justice department during the Clinton Gore administration was embarrassing on many levels: strategic, legal, technological. The NSA had no idea that it was subverting the United States on so many levels as it tried to control the spread of cryptography. It was an agency long out of step with the age, a helpless dinosaur with no idea what was going on, still believing it was fighting off an imaginary Communist threat. And the executive branch, caving in to the NSA's demands and requests, didn't come off as any less incompetent.
* The Kafkaesque crypto export laws of the 1990s reminds me of SEC rules on insider trading: kept vague on purpose to give prosecutors the greatest possible latitude for arbitrary enforcement and prosecution. The more unclear the guidelines, the more power the courts have to fuck you and put you in jail.
* The sad story of Finland's Julf Helsingius, who ran Penet, one of the world's more important anonymous remailers, shut down by lawsuits from Scientology and others.
* Interesting ideas on the nature of discovery: Sometimes you can discover things thanks to a unique form of ignorance, which is not knowing that something can't be done. The key breakthrough of public/private key cryptography, for example, had long been thought impossible. The various inventors who made the breakthroughs just didn't know this! Thoughts are things.
* We also see how getting inside the circle of classified information holders makes you blind to reality outside that world. See "the curse of security clearance" per Daniel Ellsberg in the book This Machine Kills Secrets. The people inside the walls of the NSA were oblivious to the realities of modern day communications, modern day internet commerce, all the modern day needs of a modern day economy.
* In this book, we see how the NSA uses the "if you only knew what I know" argument, which is a type of hand waving, because you don't actually have to show your evidence! They frequently would use this argument to justify imposing limits to cryptography.
* The book documents so many earnest debates and discussions about freedom and individual privacy among the various key figures in public cryptography. It's depressing to read knowing that individual privacy was soon to die anyway, totally. One also can't help reading this book and realizing that our First Amendment isn't just dying, it's been stone dead for a generation.
* The book closes with an understated denouement: the fact that a kooky Brit and a couple of young mathematicians inside British intelligence had already discovered open key cryptography, and had predated both the Diffie-Hellman insight and the RSA technique by years. But no one said a word about it, because it was top secret work done under the auspices of British Intelligence. And then the USA went on to found gigantic industries based on these "rediscovered" cryptographic principles, and the UK had nothing whatsoever to show for it. It seems to say something about the value of keeping things secret.
* For further reading:
* Elmore Leonard novels
* Pretty Good Privacy by Simpson Garfinkel