Skip to main content

Crypto by Steven Levy

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 And it's kind of sad but also hilarious to see Joe Biden show up and fuck things up by putting language (later withdrawn after a firestorm of controversy) into a 1991 Senate bill that devastated privacy rights for American citizens.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

More Posts

Reminiscences of a Stock Operator by Edwin Lefevre [fictionalized bio of Jesse Livermore]

"History repeats itself all the time in Wall Street." A fictionalized biography of Jesse Livermore, one of history's most famous speculators. This is an enriching book, worth reading every decade or so across your investment career. And it's a genuinely fun read, conveying the free-wheeling investment culture of the days before the Securities and Exchange Act. When you're young and beginning to invest, this book thrills you with all the bravado of speculating. When you're older, after you've seen a few things and learned many of the manipulations and other techniques the investment industry uses to extract money from you, the book becomes more of a cautionary tale of things not to do, traps not to step in, things to avoid. This is the third time I've read this book (I'm now in my fourth decade as an investor, so I guess that makes me one reading behind schedule), and what struck me most this time around was Livermore's self-admitted weaknesses:...

The Retirement Myth by Craig S. Karpel

A 1995-era book for Boomers by a pre-Boomer (the author is technically a tail-end Silent, but he writes and thinks like a Boomer) who is dismayed at the Boomers' complete unpreparedness as they Boom their way towards an imaginary retirement in a system the author thinks is about to collapse.  Let's get the bottom line out of the way. This is a bad and boring book with incontinent logic.  Then why read it? You  don't have to, and shouldn't. But I often review bad books as an intellectual exercise: to think about what is wrong with a book, what should and should not have been done in writing it, where the errors (of, say, conception, of structure, of logic, of rhetoric) are, and so on. And with books that make predictions, it's a glorious opportunity to practice epistemic humility to read that book after its predictions should have (but didn't) come true. Finally, you can mine even the worst books for useful insights--or in this case contra-insights, since the in...

Confessions of a Medical Heretic by Robert S. Mendelsohn, MD

"I have written this book precisely to scare and to radicalize people before they are hurt. Let this book be your radicalizing experience." The more I come into contact with modern medicine, the more I've watched my elders' lives intersect with it, the more I've observed the field's neomania and accompanying iatrogenic harms, the more I realize that everyone--everyone!--should read the following four books: H. Gilbert Welch: Less Medicine, More Health Ivan Illich: Medical Nemesis Dr. John Sarno: The Divided Mind Robert S. Mendelsohn: Confessions of a Medical Heretic While reading these works, it will be worth noting your internal reaction to them. Do you agree? Do you strongly reject? Why? And what might this indicate about your attachment to your existing beliefs about medicine? In Confession of a Medical Heretic , author Dr. Robert Mendelsohn frames up modern medicine as a type of religion, complete with priests (read: doctors), sacraments, rituals, and even...