Original Title: "33-Year Cryptography War - From Biden to Biden"

Original Author: Wang Chao, Co-Founder of Metropolis DAO

Autumn 2024, Washington D.C. The golden maple leaves are gently falling from the White House's sycamore tree, President Biden stands by the Oval Office window, looking at the city he is about to bid farewell to.

Thirty-three years ago, not far away on Capitol Hill, as a senator, he introduced the famous S.266 bill. At that time, he could never have imagined that this seemingly ordinary bill would ignite a "cryptography war" that lasted for over thirty years. Nor could he have imagined that this war would ultimately end in the final moments of his presidency with the victory of the cypherpunks.

This is a story of failure and victory, suppression and resistance, centralization and freedom, an epic that spanned an entire generation. In this war that lasted for over thirty years, a group of geeks with mathematical ideals ultimately altered the course of human civilization.

Part One: The Eve of War

The Ashes of the Cold War

This story starts even earlier.

1975, IBM Research Lab. A group of scientists was developing a revolutionary encryption algorithm, which later became the famous DES (Data Encryption Standard). The computer industry was at a crucial moment: personal computers were about to enter every home, and encryption technology would determine the direction of this revolution.

However, just as this work was about to be completed, the National Security Agency (NSA) suddenly intervened. They, under the guise of national security, demanded the key length be reduced from 128 bits to 56 bits. This seemingly technical change actually reduced the security of the algorithm by trillions.

Under the shadow of the Cold War, no one dared to question this decision. Encryption technology was seen as military equipment and had to be strictly controlled. But as the personal computer revolution advanced, this Cold War mentality began to clash sharply with the demands of the new era.

The War Begins

Spring 1991, an internal NSA report stated: "With the popularization of personal computers and the development of the Internet, the proliferation of encryption technology will pose a significant threat to national security. We must take action on this issue before it spirals out of control."

This report eventually landed on Senator Joe Biden's desk. As a key member of the Judiciary Committee, he decided to take action. He introduced the S.266 bill "Comprehensive Crime Control Act of 1991." Section 1126 of the bill stated: "Electronic communication service providers and device manufacturers are required to ensure that the government can access the plaintext of encrypted communications."

On the surface, this is a bill aimed at combating crime. But in reality, this is the government's first attempt to legislate control over the key to the entire digital world.

Chapter 2: Code Is a Weapon

The Garage Rebellion

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

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

But completing the development was only the first step. The U.S. government classified encryption software as a munition, prohibiting its export. Faced with this obstacle, Zimmermann came up with a brilliant idea: to publish the source code of PGP in book form.

This was the infamous "Zimmermann Publishing" incident. Because under the First Amendment of the U.S. Constitution, publications are protected by free speech. The government could control software, but it couldn't prevent the export of a math book.

Soon, this seemingly esoteric technical book spread globally. Around the world, programmers purchased this book and re-entered the printed code into their computers. PGP, like an unstoppable undercurrent, quietly flowed to every corner of the globe.

The Voice of Academia

Academia also raised objections. In early 1992, as Congress held a series of hearings on encryption technology control, numerous experts from academia came out strongly against establishing backdoor mechanisms. Their core argument was simple: encryption systems are either secure or insecure; there is no middle ground.

In the face of a strong wave of opposition from the tech and academic communities, the S.266 bill ultimately did not pass. This was the first victory for encryption freedom, but the government clearly was not going to give up easily.

Chapter 3: Rise of the Cypherpunks

The Birth of a New Power

1992, Berkeley, California.

At the home of John Gilmore, the fifth employee of Sun Microsystems, a group of privacy and encryption technology enthusiasts began to meet regularly. These gatherings attracted twenty to thirty technical experts from the Bay Area, including Intel scientist Timothy May and cryptographer Eric Hughes. Every month, these individuals would gather in the meeting room at Gilmore's house to discuss cryptography, privacy rights, and citizen freedoms in the digital age.

These gatherings quickly evolved into the birthplace of the cypherpunk movement. Participants realized that the emergence of the S.266 bill foreshadowed a prolonged battle for digital age civil liberties. After several meetings, they decided not to let physical constraints be 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.

The Declaration of the Digital Age

In March 1993, Eric Hughes published "A Cypherpunk's Manifesto." This document, later seen as the declaration of the digital age, begins with:

"Privacy is necessary for an open society in the electronic age. Privacy is not secrecy. A private matter is something one doesn't want the whole world to know but an intimate matter is something one doesn't want the whole world to know. Privacy is the power to selectively reveal oneself to the world."

This passage quickly spread across the early Internet. It accurately expressed a core idea of an emerging community: in the digital age, privacy is not a privilege but a fundamental human right. And the tool to protect this right is encryption technology.

Government's Counterattack

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

This was a carefully crafted trap. The government claimed that this encryption chip would satisfy both privacy protection and law enforcement needs. They even persuaded AT&T to commit to purchasing one million chips.

But this 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 purchase plan.

More importantly, this incident made the public acutely aware for the first time that government-controlled encryption systems are untrustworthy.

Beneath these public battles, deeper currents were flowing. In 1994, Amsterdam. A secret gathering of cypherpunks. They were discussing a more disruptive idea: digital currency.

"The real reason for government control of encryption is to control money," one attendee said. "If we can create an uncontrolled currency, that's the real revolution."

Chapter 4: Evolution of Institutions

The Dilemma of Netscape

1995, Silicon Valley.

A company named Netscape is rewriting history. Founded by 24-year-old Marc Andreessen and seasoned Jim Clark, this company brought the internet to the masses. On August 9, Netscape went public. Opening at $28, it closed at $58.25, instantly valuing the company at over $2.9 billion. This marked the dawn of the internet era.

During this crucial time, the Netscape team developed the SSL encryption protocol. However, due to U.S. government export regulations, they had to release two versions:

· U.S. Version: Utilizing 128-bit strong encryption

· International Version: Limited to 40-bit encryption

This dual standard quickly proved to be disastrous. A French student cracked the 40-bit SSL in just 8 days. This news sent shockwaves through the business world. "This is the result of government control," Netscape engineers angrily stated, "they are not protecting security; they are creating vulnerabilities."

In 2009, Netscape's co-founder Marc Andreessen, along with Ben Horowitz, established the a16z venture capital firm. Subsequently, A16z quickly became one of the most active investment firms in the crypto space. As a corporation, Marc Andreessen had to comply with government demands. However, as an investor, Marc Andreessen continued to support this crypto war.

The Rise of the Open Source Movement

Within the crypto war, there was an unexpected ally: the open-source movement.

In 1991, a Finnish student named Linus Torvalds released the first version of Linux. To bypass U.S. export regulations, he deliberately kept the encryption module outside the kernel. This seemingly compromising decision allowed Linux to freely spread globally.

The open-source movement altered the landscape of the entire tech world. The once idealistic concept of cypherpunk ideals began to bear fruit in reality:

· Code should be free

· Knowledge should be shared

· Decentralization is the future

Microsoft's Bill Gates referred to open source as a "computer virus," but he was wrong; open source became the future.

The Crypto Wars also greatly supported the open-source movement itself. In 1996, in the case of Daniel Bernstein v. the United States government regarding export controls on encryption software, the court ruled for the first time: computer code is a form of expression protected by the First Amendment of the Constitution. This landmark ruling cleared legal obstacles for the open-source movement. Today, open-source software has become the foundation of the Internet.

The End of the First Phase of the War

By 1999, the situation had become irreversible. The Clinton administration finally relaxed decades-long encryption technology export controls. The Economist at the time commented, "This is not just a war about technology but a war about freedom."

The results of the war are changing the world:

· PGP became the standard for email encryption

· SSL/TLS secured all online transactions

· Linux and open-source software transformed the entire tech industry

· Encryption technology became the infrastructure of the digital age

But this was only the beginning. The gaze of the crypto punks has already set on a more ambitious target: the monetary system itself.

Chapter Five: The Currency War

The Pioneer of Digital Currency

In 1990, cryptographer David Chaum founded DigiCash, pioneering the integration of cryptography and electronic payments. DigiCash created a system through "blind signatures" that could both protect privacy and prevent double-spending. Although the company eventually went bankrupt in 1998, its influence was profound.

Over the next decade, a series of groundbreaking ideas emerged:

In 1997, Adam Back created Hashcash. This system, initially designed to combat spam, first operationalized the concept of "proof of work."

In 1998, Wei Dai published the B-money proposal. This was the first fully described distributed digital currency system where participants create money by solving computational puzzles, which is the familiar concept of PoW. Wei Dai's contribution was so significant that years later, Ethereum founder Vitalik Buterin named the smallest unit of Ether "Wei" as a tribute to this pioneer.

Between 1998 and 2005, Nick Szabo introduced the BitGold concept. He not only cleverly combined proof of work with value storage but also proposed the revolutionary concept of "smart contracts."

The Birth of Bitcoin

The work of these pioneers seemed to have touched the edge of a dream, yet always lacked the final piece of the puzzle. How could all participants reach consensus on transactions without a centralized institution? This question had troubled cryptographers for a full 20 years.

On October 31, 2008, a mysterious figure named Satoshi Nakamoto published the Bitcoin whitepaper on a cryptography mailing list. This scheme cleverly integrated multiple existing technologies:

· Adopted a proof-of-work system similar to Hashcash

· Borrowed the decentralized design concept from B-money

· Used Merkle Trees for transaction validation

· Innovatively introduced the blockchain to solve the double-spending problem

This new system solved a problem that all previous digital currency schemes had failed to solve: how to achieve consensus in a fully decentralized environment.

More importantly, the timing of this proposal was very delicate. Just a month earlier, Lehman Brothers had collapsed, triggering a global financial crisis. People began to question the stability of the traditional financial system.

On January 3, 2009, the genesis block of Bitcoin was created. In the block, Satoshi Nakamoto wrote a line: "The Times 03/Jan/2009 Chancellor on brink of second bailout for banks."

This headline from The Times not only marked the time of block creation but also silently accused the traditional financial system.

The recipient of the first Bitcoin transaction was Hal Finney, who had previously interned at DigiCash. When he received 10 bitcoins from Satoshi Nakamoto in January 2009, he simply tweeted, "Running bitcoin."

This ordinary tweet became one of the most famous records in the history of digital currency. From the laboratories of DigiCash, to the cypherpunks' mailing list, and finally to the birth of Bitcoin, a revolution that had been brewing for nearly two decades had finally found its new form.

The First Conflict

In 2011, Bitcoin first caught the attention of Washington.

After WikiLeaks was blocked by credit card companies and banks, they started accepting Bitcoin donations. This allowed the world to see Bitcoin's true power for the first time: it is uncensorable and unstoppable.

Senator Charles Schumer then issued a warning at a press conference, calling Bitcoin a "digital form of money laundering." This was the first public statement by the U.S. government targeting Bitcoin.

The Storm Arrives

In 2013, an unexpected crisis gave Bitcoin new recognition.

The Cyprus banking crisis erupted, with the government forcibly seizing deposits directly from account holders. This exposed the vulnerability of the traditional financial system to the world: your deposits do not truly belong to you.

The price of Bitcoin surpassed $1,000 for the first time. However, it was followed by more severe government crackdowns. That same year, the FBI seized the dark web market "Silk Road" and confiscated 144,000 bitcoins. The government seemed to be proving: Bitcoin is indeed a tool for criminals.

Institutional Backlash

In 2014, cryptocurrency faced its first major crisis. The world's largest Bitcoin exchange, Mt. Gox, suddenly shut down, and 850,000 bitcoins vanished into thin air. This was equivalent to 7% of the total Bitcoin in circulation at the time.

Governments worldwide, citing investor protection, began to strengthen regulations. In 2015, New York State introduced the rigorous BitLicense framework, known as the "crypto industry's crystal ball," forcing many cryptocurrency companies to leave New York.

However, every crisis made this industry stronger. More importantly, these crises proved a key point: even though centralized exchanges may fail, the Bitcoin network itself remains rock solid. This is the value of decentralized design.

Institutional Breakthrough

2017 marked a significant turning point for cryptocurrency. That year, Bitcoin surged from $1,000 to $20,000. But more importantly, there was an institutional breakthrough: the Chicago Mercantile Exchange (CME) and the Chicago Board Options Exchange (CBOE) launched Bitcoin futures contracts.

This signaled Wall Street's formal acceptance of this once underground asset. Regulatory attitudes also began to subtly shift from outright denial to attempts to understand and regulate.

However, the real turning point occurred in 2020. The COVID-19 pandemic broke out, leading countries to embark on an unprecedented monetary expansion. In this context, institutional investors began to reevaluate the value of Bitcoin.

In August, MicroStrategy CEO Michael Saylor announced the conversion of the company's reserve funds to Bitcoin. This decision triggered a chain reaction in the corporate world. By February 2021, Tesla announced the purchase of $1.5 billion worth of Bitcoin, sending shockwaves through the entire financial industry.

Chapter 6: The Final Battle

In 2021, the Biden administration launched a full-scale crackdown on the crypto industry. This time, the government's strike was 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 crypto technology. Now, they are trying to control cryptocurrency through regulation.

But the landscape is different now. Beneath the surface regulatory storm, cryptocurrency has deeply permeated every corner of modern society: over 50 million Americans hold cryptocurrency, mainstream payment companies are integrating crypto payments, Wall Street has established full crypto business lines, and traditional financial institutions are starting to offer crypto services to their clients.

More importantly, a new generation has fully embraced the cypherpunk ethos. For them, decentralization and digital sovereignty are not revolutionary concepts but rather taken-for-granted principles. This shift in mindset is more profound than any technological innovation.

In 2022, the crypto market experienced a severe crisis. The collapse of FTX plunged the entire industry into a cold winter. In 2023, the crypto industry began to recover. Each crisis has made the industry more mature and regulated. Regulatory agencies have also started to subtly shift their stance from mere suppression to seeking a reasonable regulatory framework.

A Turning Point in History

In 2024, an ironic turning point occurred. Trump came out in support of crypto innovation as a key campaign policy, promising to create a more crypto-friendly regulatory environment. His running mate, Senator J.D. Vance of Ohio, was himself a Bitcoin holder and had been at the forefront of crypto innovation for years. They won the presidential election in a landslide.

Thirty-three years ago, when Biden proposed the S.266 bill, he believed he was defending order. But history is always full of irony: it was this very 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 crypto. This turn of events came so naturally: when a revolution finally succeeds, even former adversaries have to acknowledge its value.

But for cypherpunks, gaining government recognition has never been the ultimate goal. As Satoshi Nakamoto once said, Bitcoin is a tool that can give everyone financial sovereignty. The government's attitude is just a milestone on the road, witnessing how crypto tech has moved from an underground movement to mainstream life, and how it has evolved from a technical experiment to a world-changing force.

From the initial resistance of cryptographers and programmers to today's billions of people using cryptocurrency; from geeky experiments in garages to a force that shakes the global financial system; from being seen as a utopian ideal to becoming the foundation of a new world. In this war that has spanned a generation, cypherpunks have been underestimated time and time again. They have been called idealists, extremists, and even criminals. But they simply stubbornly believe: the truth of mathematics will ultimately overcome the power of politics, and the freedom of decentralization will ultimately prevail over the control of centralization.

Now, their dream is becoming a reality. Cryptography is no longer a weapon hidden in the dark but a torch lighting up a new civilization. It is reshaping every aspect of human society: when wallets become passphrases, when contracts are executed by code, when organizations are managed by algorithms, when trust is built on mathematics, the world stands at the threshold of a new civilization.

In the future history books, the year 2024 may be remembered as the triumph of the crypto revolution. But the true victory lies not in the recognition of any government but in the awakening of millions of ordinary people.

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

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