Original title: “Encryption War 33 Years - Started with Biden, Ended with Biden”

Original author: Wang Chao, co-founder of Metropolis DAO

转载：Lawrence，火星财经

In the late autumn of 2024, Washington, D.C. The golden maple leaves are slowly falling from the sycamore trees of the White House, and President Biden is standing at the window of the Oval Office, looking at the city he is about to bid farewell to.

Thirty-three years ago, on Capitol Hill not far away, he introduced the famous S.266 bill as a senator. At that time, he could never have imagined that this seemingly ordinary bill would become the catalyst for a “encryption war” that lasted for more than 30 years. Nor could he have imagined that this war would ultimately end with the victory of the cypherpunks during his presidency’s final moments.

Part 1: The Eve of the War

The Ashes of the Cold War

This story begins much earlier.

But just as this work was about to be completed, the National Security Agency (NSA) suddenly intervened. They cited national security reasons and requested to reduce the length of the Secret Key from 128 bits to 56 bits. This seemingly technical change actually dropped the security of the Algorithm by trillions of times.

In the shadow of the Cold War, no one dared to question this decision. encryption technology was regarded as military equipment and had to be strictly controlled. But with the advancement of the personal computer revolution, this Cold War mentality began to clash sharply with the needs of the new era.

War begins

In the spring of 1991, an internal NSA report stated, “With the popularization of personal computers and the development of the Internet, the spread of encryption technology will become a major threat to national security. We must take action on this issue before it gets out of control.”

The report ultimately landed on Senator Joe Biden’s desk. As an important member of the Judiciary Committee, he decided to take action. He introduced Senate Bill 266, the Comprehensive Crime Control Act of 1991. Section 1126 of the bill states: “Electronic communication service providers and device manufacturers are obligated to ensure that the government can obtain the plaintext content of encryption communications.”

On the surface, this is a bill aimed at crime. But in reality, this is the government’s first attempt to control the keys to the entire digital world through legislation.

Chapter 2: Code is the Weapon

Rebellion in the garage

While politicians in Washington were discussing this bill, in a garage in Colorado, programmer Phil Zimmermann was quietly leading a revolution. The PGP (Pretty Good Privacy) software he developed enables ordinary people to use military-grade encryption technology.

When Zimmermann heard about the S.266 bill, he realized that he had to complete PGP before the bill passed. This turned into a race against time battle.

But completing the development is just the first step. The US government classifies encryption software as military supplies and prohibits exports. Faced with this obstacle, Zimmermann came up with a brilliant idea: printing the source code of PGP as a book for publication.

This is the famous “Zimmerman Publishing” incident. Because according to the First Amendment of the US Constitution, publications are protected by freedom of speech. The government can regulate software, but cannot prohibit the export of a mathematics book.

Soon, this seemingly obscure technical book spread worldwide. Programmers around the world bought the book and re-entered the printed code into computers. PGP is like an unstoppable undercurrent, quietly flowing to every corner of the world.

Voices in academia

There were also oppositions from the academic community. In early 1992, when Congress held a series of hearings on the regulation of encryption technology, many experts in the academic community came forward to explicitly oppose the establishment of backdoor mechanisms. Their main argument was simple: encryption systems are either secure or insecure, with no middle ground.

Under the strong opposition from the technology and academic communities, the S.266 bill ultimately failed to pass. This is the first victory for encryption freedom, but the government is clearly not going to give up easily.

Chapter 3: The Rise of Cypherpunk

The Birth of Emerging Forces

In 1992, Berkeley, California.

These gatherings quickly evolved into the birthplace of the Cypherpunk movement. Participants realized that the emergence of the S.266 bill heralded a protracted struggle for digital-age civil liberties. After several meetings, they decided not to let physical constraints become a barrier, so they created the Cypherpunk mailing list. The name is a combination of “cypher” and “punk”. Soon, this mailing list attracted hundreds of members, including computer scientists, cryptographers, and libertarians.

Declaration of Independence in the Digital Age

In March 1993, Eric Hughes published the “Cypherpunk Manifesto”. This document, which was later regarded as a declaration of independence for the digital age, began with:

“Privacy is necessary to maintain openness in an open society. Privacy is not secrecy. A privacy matter is something you don’t want the whole world to know, but not something you don’t want anyone to know. Privacy is selectively showing your abilities to the world.”

Government’s counterattack

The rise of Cypherpunk has made the Clinton administration uneasy. In April 1993, the White House launched a new plan: Clipper Chip.

This is a carefully designed trap. The government claims that this encryption chip will simultaneously meet the needs of privacy protection and law enforcement. They even persuaded AT&T to commit to purchasing 1 million chips.

But the plan soon suffered a fatal blow. In June 1994, AT&T researcher Matt Blaze published a paper proving that the security of the Clipper Chip was illusory. This finding embarrassed the government, and AT&T promptly abandoned the procurement plan.

More importantly, this incident has made the public clearly realize for the first time: government-controlled encryption systems are untrustworthy.

“The real reason the government controls encryption is to control money,” said one participant. “If we can create an uncontrolled currency, that would be a real revolution.”

Chapter 4: Evolution of the System

Netscape’s Dilemma

1995, Silicon Valley.

A company called Netscape is rewriting history. This company, founded by 24-year-old Marc Andreessen and experienced Jim Clark, has brought the Internet into the lives of ordinary people. On August 9th, Netscape went public. The Opening Price was $28, and the closing price reached $58.25, with a market capitalization of over $2.9 billion overnight. This is the beginning of the Internet era.

At this critical juncture, the NetScape team developed the SSL encryption protocol. However, due to export controls by the US government, they had to release two versions:

· US version: Use 128-bit strong encryption

· International version: can only use 40-bit encryption

This double standard was quickly proven to be disastrous. A French student cracked 40 bits of SSL in just 8 days. The news shocked the business world. “This is the result of government regulation,” angry Netscape engineers said, “they are not protecting security, but creating vulnerabilities.”

In 2009, Marc Andreessen, co-founder of Netscape, and Ben Horowitz co-founded the a16z venture capital firm, which quickly became one of the most active investment institutions in the encryption field. As an entrepreneur, Marc Andreessen had to yield to government demands. But as an investor, Marc Andreessen continued to support this encryption war.

The Rise of the Open Source Movement

In the encryption war, there is an unexpected ally: the Open Source movement.

In 1991, a Finnish student named Linus Torvalds released the first version of Linux. To avoid US export controls, he deliberately placed the encryption module outside the kernel. This seemingly compromised decision allowed Linux to be freely distributed worldwide.

The Open Source movement has changed the entire landscape of the tech world. The once idealistic Cypherpunk ideas are now bearing fruit in reality:

· The code should be free

· Knowledge should be shared

· Decentralization is the future

Microsoft’s Bill Gates called Open Source “computer virus,” but he was wrong. Open Source has become the future.

The encryption war also greatly supported the Open Source movement itself. In 1996, in the case of Daniel Bernstein v. the US government’s export control of encryption software, the court ruled for the first time that computer code is a form of speech protected by the First Amendment to the Constitution. This landmark ruling cleared the legal obstacles for the Open Source movement. Today, Open Source software has become the foundation of the Internet.

The first stage of the war is over

By 1999, the situation was irreversible. The Clinton administration finally relaxed decades-long encryption technology export controls. The Economist magazine at the time commented, “This is not only a war about technology, but also a war about freedom.”

The fruits of war are changing the world:

· PGP has become the standard for email encryption

· SSL/TLS protects all online transactions.

· Linux and Open Source software have changed the entire technology industry

· Encryption technology has become the infrastructure of the digital age.

But this is just the beginning. The gaze of the cypherpunks has already turned to a more ambitious target: the monetary system itself.

Chapter 5: Currency War

The pioneer of Digital Money

In 1990, cryptographer David Chaum founded DigiCash, which pioneered the combination of cryptography and electronic payments. DigiCash created a system through “blind signature” technology that could protect privacy and prevent Double Spending. Although the company eventually declared bankruptcy in 1998, its influence was far-reaching.

In the next ten years, a series of groundbreaking ideas emerged one after another:

In 1997, Adam Back invented Hashcash. This system, initially used to combat spam, was the first to put the concept of “Proof of Work” into practice.

In 1998, Wei Dai published the B-money proposal. This was the first complete description of a distributed Digital Money system, where participants create currency by solving computational puzzles, which is what we know as PoW. Wei Dai’s contribution was so significant that many years later, Ethereum founder Vitalik Buterin named Ethereum’s smallest currency unit “Wei” as a tribute to this pioneer.

Between 1998 and 2005, Nick Szabo proposed the concept of BitGold. He cleverly combined Proof of Work with value storage and introduced the revolutionary concept of “smart contracts”.

The Birth of Bitcoin

The work of these pioneers seems to have touched the edge of dreams, but always lacks the final piece of the puzzle. How to achieve consensus among all participants in transactions without a centralized institution? This question has plagued cryptographers for a full 20 years.

On October 31, 2008, a mysterious figure named Satoshi Nakamoto published the BTC White Paper on the cryptography mailing list. This scheme cleverly integrates multiple existing technologies:

· Adopted a Proof of Work system similar to Hashcash

· Borrowed the Decentralization design concept from B-money

· Use Merkle trees for transaction verification

· Innovatively proposed the Block chain to solve the Double Spending problem

This new system solves the problem that all previous Digital Money solutions have not been able to solve: how to achieve Consensus in a fully Decentralization situation.

More importantly, the timing of this proposal is very delicate. Just a month ago, Lehman Brothers collapsed, and the global financial crisis broke out. People began to question the stability of the TradFi system.

2009 年 1 月 3 日，比特币的创世区块诞生。中本聪在区块中写下了一句话：“The Times 03/Jan/2009 Chancellor on brink of second bailout for banks”

This headline from The Times is not only a record of Block generation time, but also a silent accusation against the TradFi system.

The recipient of the first BTC transaction was Hal Finney, who had interned at DigiCash. When he received 10 BTC from Satoshi Nakamoto in January 2009, he simply tweeted, “Running BTC.”

This ordinary tweet has become one of the most famous records in the history of Digital Money. From the DigiCash lab to the Cypherpunk mailing list, and then to the birth of BTC, a revolution that has been brewing for nearly two decades has finally found its new form.

The first conflict

In 2011, BTC first caught the attention of Washington.

After being blocked by credit card companies and banks, WikiLeaks began accepting BTC donations. This let the world see the true power of Bitcoin for the first time: it is uncensorable and unstoppable.

Senator Charles Schumer immediately issued a warning at a press conference, stating that BTC is a “digital form of Money Laundering tool”. This is the first public statement by the US government targeting BTC.

The storm is coming

In 2013, an unexpected crisis gave BTC new recognition.

The Cyprus banking crisis erupted, and the government directly levied deposits from the account of depositors. This showed the fragility of the TradFi system to the world: your deposits do not really belong to you.

The price of Bitcoin broke through $1000 for the first time. However, it was followed by stricter government crackdowns. In the same year, the FBI seized the Darknet market ‘Silk Road’ and confiscated 144,000 BTC. The government seems to be proving that Bitcoin is a tool for criminals.

The Counterattack of the System

In 2014, Crypto Assets encountered its first major crisis. The world’s largest BTC exchange, Mt.Gox, suddenly closed, and 850,000 BTC disappeared into thin air. This was equivalent to 7% of the total BTC on the network at the time.

But every crisis makes this industry stronger, and more importantly, these crises prove a key point: even centralized exchange may fail, the BTC network itself remains as solid as a rock. This is the value of Decentralization design.

Institutional breakthrough

2017 marked a significant turning point for Crypto Assets. In that year, Bitcoin surged from $1000 to $20000. But more importantly, there was an institutional breakthrough: the Chicago Mercantile exchange (CME) and the Chicago Options exchange (CBOE) introduced BTC futures contracts.

This marks Wall Street’s official embrace of this once underground asset. Regulatory attitudes are also beginning to subtly shift from outright denial to attempts to understand and regulate.

But the real turning point came in 2020. The outbreak of the new crown epidemic led to an unprecedented expansion of currency in various countries. In this context, institutional investors began to re-evaluate the value of BTC.

In August, MicroStrategy CEO Michael Saylor announced that the company’s reserve funds would be converted to BTC. This decision has triggered a chain reaction in the corporate world. By February 2021, TSL announced the purchase of $1.5 billion in BTC, shaking the entire financial world with this news.

Chapter Six: The Final Battle

In 2021, the Biden administration launched a comprehensive crackdown on the encryption industry. This time, the government’s crackdown is more organized and comprehensive than ever before. Thirty-three years ago, after the failure of the S.266 bill, the government could no longer stop the development of encryption technology. Now, they are trying to control cryptocurrency through regulation.

But the situation is different. Under the surface of regulatory storm, Crypto Assets has deeply penetrated every corner of modern society: more than 50 million Americans hold Crypto Assets, mainstream payment companies are integrating encryption payments, Wall Street has established a complete Crypto Assets business line, and traditional Financial Institution are starting to provide Crypto Assets services to clients.

In 2022, the crypto market experienced a severe crisis. The collapse of FTX plunged the entire industry into a cold winter. In 2023, the encryption industry began to recover. Every crisis makes the industry more mature and standardized. The attitude of regulatory agencies also began to subtly change, shifting from simple suppression to seeking a reasonable regulatory framework.

Turning Point in History

In 2024, an ironic turn of events occurred. Trump will support encryption innovation as an important campaign policy, promising to create a more friendly regulatory environment for the encryption industry. His running mate, Ohio Senator J.D. Vance, is a holder of Bitcoin and has been at the forefront of encryption innovation for many years. They won this presidential election in a sweeping manner.

Thirty-three years ago, when Biden proposed S.266, he believed he was defending order. But history is always full of irony: it was this bill that became the catalyst for a revolution that changed human civilization. Now, he is about to hand over the presidency to a successor who supports encryption. This turn of events is so natural: when a revolution finally prevails, even former opponents have to admit its value.

From the initial resistance of cryptographers and programmers to the use of Crypto Assets by billions of people today; from geeky experiments in the garage to the power shaking the global financial system; from being seen as a utopian ideal to becoming the foundation of a new world. In this war that has lasted for a generation, the cypherpunks have been underestimated time and time again. They have been called idealists, extremists, and even criminals. But they just stubbornly believe that the truth of mathematics will eventually overcome the power of politics, and the freedom of Decentralization will eventually overcome the control of centralization.

Now, their dreams are becoming a reality. encryption technology is no longer a weapon hidden in the dark, but a torch illuminating the new civilization. It is reshaping every aspect of human society: when Wallet becomes a code, when contracts are executed by programs, when organizations are managed by code, when trust is built on mathematics, the world stands at the threshold of a new civilization.

In the future history books, 2024 may be recorded as the year of victory for the encryption revolution. But the real victory lies not in the recognition of any government, but in the awakening of millions of ordinary people.

This is a gift for cypherpunks, a new world built by code and protected by mathematics. In this world, freedom, privacy, and trust are no longer slogans, but are embedded in every line of code, every block, and every peer-to-peer connection.