Crypto-​Anarchism

Crypto-​anarchism is a philosophy whose advocates think technology can assist them in creating communities based on consent rather than coercion. Crypto-​anarchists wish to be free from state interference but prefer technical means over political means in pursuing their aims. In this way, crypto-​anarchism is both a way of seeing and a way of being.

The crypto-​anarchist way of seeing is a general skepticism of all claims to political authority. Indeed, anarchists in the liberal tradition are not only skeptical of political authority, but they think any right conception of justice ought to originate in consent. In other words, one should be able to choose one’s governance system. Such a philosophy lies in stark contrast to conceptions that evoke a hypothetical social contract or a General Will. To think like an anarchist, then, is to advocate for consent-​based governance systems and to reject compulsion-​based systems.

Despite widespread sentimental attachments to our countries and their governments, anarchists think states are unjustifiable. All systems of compulsion and subordination are indefensible unless the individual gives prior consent to the system. Yet most anarchists are under no illusions when it comes to making their case to the powerful. Anarchists understand that political authorities are not likely to tolerate any form of peaceful association that challenges their power. And those who benefit from state transfers are not likely to withdraw their support from entities promising those transfers. So, both state proxies and their supplicants have every incentive to fight for incumbency.

Therefore, the anarchist thinks political authority exists, as any other phenomenon of nature exists, like hurricanes or malaria. To acknowledge this reality gives rise to the crypto-​anarchist way of being. That is, those who do not accept political authority nevertheless have to navigate life with it as a social fact. So, to be a crypto-​anarchist is to be comfortable with some degree of civil disobedience—all while creating and participating in parallel, consent-​based systems. Many of those systems will be designed to challenge or route around political authorities.

Crypto-​anarchists call this “underthrow.”

The prefix “crypto” makes the moniker seem somewhat occult. Indeed, there is secrecy in the conception; otherwise, how will the anarchist evade the state’s attention and control? The other connotation of “crypto” is technical. This comes from cryptography, which is a set of tools fashioned by computer scientists and mathematicians. But, of course, these technologies have always been rooted in the human desire for privacy or free association. In this way, innovators in cryptography design systems that let two or more parties engage in unmolested and unmonitored communication, collaboration, or exchange. Enabling, protecting, and encouraging these forms of association is the goal of crypto-​anarchists.

Crypto-​anarchism has a long and storied history. Even the secret societies that formed under tyrants in the days before mass communication were antecedents. For the sake of brevity, though, let’s situate the genesis of modern crypto-​anarchism at the dawn of the information age. In this period, humanity began to envision the breakthrough via a convergence of new tools and rules (technology and institutions).

Timothy C. May set out this vision in his 1988 manifesto:

May anticipated everything from black markets to bitcoin. But it is in the latter that the true potential for crypto-​anarchy began to gestate in the minds of millions and not just a small group of cypherpunks.

In 2009 May’s vision manifested when a person or group pseudonymously named Satoshi Nakamoto published the bitcoin white paper. To crypto-​anarchists, the ramifications of this peer-​to-​peer digital cash system rivaled the printing press in significance. However, the bitcoin network is more than just an electronic cash system. It contains the germs of ideas currently being propagated in a dazzling, evolutionary landscape of tokens, smart contracts, distributed ledgers, and governance systems. Most importantly, bitcoin unleashed the idea that people could peacefully work together to construct new social operating systems. Moreover, unlike nation-​states, people can join or exit those networks at will, provided they honor any agreements they make.

As of this writing, thousands of cryptocurrency tokens represent various nascent systems and their properties. Many of these systems demonstrate the power of disintermediation, or the removal of middlemen. Token ecosystems are a wonderland for the crypto-​anarchist. They represent the potential for people to self-​organize according to different ideas of the good. The “crypto” space represents the promise and possibility of transition into more consent-​based systems of governance, which we call rules without rulers.

All of these technologies threaten to make obsolete powerful corporate and government hierarchies. Indeed, the very structures that stand to be toppled are reacting with predictable hostility.

There is a decidedly libertarian flavor to crypto-​anarchist thinking. But some crypto-​anarchists reject libertarianism, and some libertarians reject crypto-​anarchism.

In drawing a crude map, you might think of libertarianism as a doctrine that includes a certain set of ideas about what kind of state authority is justified. For example, most libertarians accept some variation on the idea that one ought never to initiate harm against another person, which most crypto-​anarchists share. But many libertarians imagine, like Locke or Hobbes, that a certain kind of centralized state power is necessary for the administration of justice—a benevolent monopoly on violence. So, like the American Founders, most libertarians think that the state is justified but that officials should restrict its police powers to protecting the lives and property of a free people.

The problem, of course, is how to oblige the state’s agents to constrain themselves despite powerful incentives to the contrary. Checks and balances are necessary, but crypto-​anarchists share Madison’s skepticism of political angels. As Edmund Burke said,

Crypto-​anarchists think the best check on power is to create more radical systems of permissionless decentralization. These forces allow dissidents to exit a system if it isn’t serving their needs. In this way, crypto-​anarchists are pragmatic. While most see no contradiction in using both political- and non-​political means to check unjustified authority, they prefer non-​political means. Crypto-​anarchists think that widespread civil disobedience is a more effective check.

Crypto-​anarchists also believe that the more people move into consent-​based systems, the more likely it is that they will generate a global market in legal and governance services. The overall effect will be a less violent set of institutions, nation-​states notwithstanding. After all, if one has to force people to obey some set of rules, that’s far more costly and far less valuable than enforcing a body of law that people choose and use themselves. That’s why crypto-​anarchists believe in actual social contracts, not hypothetical ones.

Crypto-​anarchists also take issue with minarchist libertarians to the extent the latter present a rigid checklist for what constitutes a just society. Indeed, most anarchists are more comfortable with the fact of pluralism, which is the idea that, given a chance, people will opt in to a variety of systems that libertarians may find illiberal.

Most voters treat what they learn in fourth-​grade social studies class as gospel, helping to maintain a set of civic mythologies. Thus, crypto-​anarchists understand that it will not be easy to shake the mirage of the benevolent state, flaunt the incentives of state actors, and reject the old, bad habits of politics (even assuming it were possible to create “minimal” states in the first place). Most people pay their taxes. Then they outsource any remaining sense of civic responsibility to “representatives.” That way, they can get on with the more mundane cycles of work, play, and online culture wars.

There are plenty of overlaps between minarchist libertarians and crypto-​anarchists. One might even characterize crypto-​anarchism as a species of libertarianism. But however you draw the map, the territory charted gets strange quickly. Some crypto-​anarchists have an aversion to traditional corporate forms. The more leftish among them resist all systems built on institutions of private property. Indeed, some crypto-​anarchists think that corporations are aided and abetted by states and want to see both types of hierarchies reformed or even abolished. Others don’t go quite so far but are interested in how technological solutions like distributed ledgers can create alternative financial systems, such as time banking, mutual credit, and commoning. Libertarian-​leaning crypto-​anarchists are more interested in those systems that enable free exchange, voluntary association, and mutual aid (not to mention tax- and inflation avoidance). They leave room for both private- and common property to evolve as institutions.

Yet, at the very least, there are opportunities for strategic alliances among the factions, as most share some commitment to human freedom and suspicions about the corporatized state.

State actors are getting wise to systems that threaten their control. Powerful elites are developing an array of regulatory sticks and carrots to keep the herd timid. Regulators can drive many crypto-​anarchist solutions underground, including the most prosocial ones. Fear of state reprisals makes crypto-​anarchism too bitter a pill to swallow for most. After all, crypto-​anarchists operate in either legal gray areas or outright black markets. Waving a black flag is risky even if one is wearing a white hat. And, of course, authorities will paint crypto-​anarchists with the same brush as criminals who deal in actual vice.

“The State will of course try to slow or halt the spread of this technology,” warns Timothy C. May in his original manifesto. State proxies will cite “national security concerns, use of the technology by drug dealers and tax evaders, and fears of societal disintegration.”

Of course, May’s predictions have been eerily accurate with the rise of cryptocurrencies. One wouldn’t want to suggest terrorist groups and drug traffickers don’t use cryptographic tools; rather, one should point out that the most effective propaganda techniques almost always include grains of truth, which authorities exploit to justify crackdowns.

Most critiques of crypto-​anarchism turn on a confusion between law as justice and justice as law. In other words, a lot of critics think that deliberation among elected officials via the legislative process creates justice (law as justice). Whatever comes out of that legitimating process is justice. But crypto-​anarchists think this gets matters precisely backward.

Not only should different rulesets be tried and tested in the friction of human interaction, but something like law should only emerge from human interactions and agreements in which people discover justice (i.e. justice as law). Consent-​based law generates higher-​quality law because finding justice is more of a discovery process than a deliberative one. In this way, the law becomes a happy byproduct of human choices, particularly as people seek to reduce friction with one another. Unfortunately, when legislators hand down statutes and force compliance, the discovery process gets short-​circuited. The only feedback loop is the occasional election, which offers no guarantee of change, much less timely change.

1. Crypto-​anarchist solutions are often illegitimate.

This criticism is question-​begging. As we have discussed, the nature of justice and law is at issue here. Whether an authority is legitimate is not the same as whether it is justifiable, either via philosophical inquiry or a decentralized discovery process. That is why the anarchist’s starting point for justice is consent.

2. Crypto-​anarchist solutions are based on a faulty conception of justice.

This is an unsettled issue. Crypto-​anarchists believe justice is a product of voluntary association. Whether or not they have the imprimatur of political authorities, systems of voluntary association are both justifiable and just so as long as they bring no harm to members of the association. Note that this is not the same as claiming that if an actor within some system brings harm, the system is wrong-​-​a position some critics hold. Otherwise, to persuade a crypto-​anarchist that non-​violent association is unjust is a great challenge. It is difficult to explain how there is injustice in two or more parties reaching agreements or making exchanges that harm no one. It’s even more difficult for anarchists to see how conceptions of justice that depend on coercion are more justified.

3. Crypto-​anarchist systems make it possible for people to deal in vice.

This statement is undoubtedly true, but does it work as a critique? While crypto-​anarchist solutions make it possible for certain people to facilitate wrongdoing, so do competing systems, especially state-​sanctioned ones. This is not intended as a tu quoque argument. It is instead an invitation for critics to apply the same standards to their preferred systems. After all, when considering any system, we always have to ask as compared to what? The what cannot just be some unrealized ideal. Crypto-​anarchist systems are technological tools. Like more familiar tools, cryptography can be used in the service of good or evil. Hammers can be used to build a treehouse or murder one’s spouse, but that latter fact does not make the existence of hammers unjustifiable.

4. Crypto-​anarchist solutions make it possible for people to evade their responsibilities to the “common good.”

While it is also true that state authorities and statutes also make it possible for people to evade certain kinds of responsibilities, let’s focus on the problem of what constitutes the common good. There are two ways to determine whether some “good” is common to members of a group. The first way is simply to claim that something is good and then attempt to justify the means of achieving that good. The second is to offer some purported good and then determine whether and to what extent people adopt it. Crypto-​anarchists believe demonstrated preference is superior to theoretical lip service because people’s actual choices supply proof. For example, solutions such as dominant assurance contracts show how consent-​based provision of public goods can work.

5. Crypto-​anarchist solutions can be untransparent, which makes it more difficult to hold bad actors accountable-​-​especially when they initiate harm.

Here again we have to ask: as compared to what? Then we need to get into specific examples instead of just-​so stories. One of the benefits of distributed ledgers and smart contracts is that they introduce systems that require less trust—whether in third parties or counterparties. For example, blockchains do a good job with escrow arrangements, proof of provenance, as well as providing pseudonymous identity and reputation systems. In this way, if two people are parties to a transaction, neither party needs to reveal their identity. Still, both parties will have strong incentives to have and keep a good reputation, which can be associated with a transacting pseudonym. Such systems can balance privacy concerns against the benefits of cooperation. The ecosystems of cryptographic tech currently arising should never be dismissed due to a failure of imagination. They are growing, adapting, and poised to run rings around legacy systems that require police violence and standing armies to cohere.

Even though most forms of crypto-​anarchism involve an ideological prior, such as consent, crypto-​anarchists tend to be highly pragmatic in the face of overwhelming power.

The core of crypto-​anarchy might be the realization that there is no “One True Way.” But expanding the range of non-​violent human choices isn’t likely to come about via legacy politics. The dynamics of public choice and ideological warfare should disabuse people of any such romantic notions. That is why crypto-​anarchists believe that, in the future, there will be more governance pluralism. In other words, people will be able to experiment with different systems no matter where they live. Despite powerful, entrenched legacy systems, crypto-​anarchists think the rapid evolution of technology, culture, and governance will shape the future.

With greater decentralization, humanity will move into a condition that looks more like a free market in governance services. And that, by the way, is very different from claiming that any given system will be a free market. Why? Decentralization means people will join a system as they might an intentional community or civil association. Systems will compete for members.

Competition among providers of governance services offers three distinct benefits:

• First, it humbly acknowledges there is no one true way. People have different subjective preferences about governance systems.
• Second, it includes the idea that “the consent of the governed” ought actually to mean something.
• Third, it acknowledges that people can join economic niches according to their particular conceptions of the good.

The radical shift will be that governance services -- including economic systems -- are systems best offered by entrepreneurs instead of imposed by authorities.

In this way, you can think of crypto-​anarchy as a meta-​doctrine but not a doctrine per se. Because it is a commitment to experimentation and choice, the only doctrinal aspect is the consent requirement. People will try out different systems. Not all systems will succeed. That’s okay because the threat of member defection means evolutionary forces test each system. The best and most sustainable systems will survive.

Eventually, there may be conflicts among systems, so people will demand adjudication services, which will emerge and co-​evolve with different governance systems. In such a condition, we will have to be far more reflective in determining which features comport with our individual ideas of the good. But that’s a good thing. By lowering the costs of exit, we will join up with the system we prefer—whether communist, capitalist or something altogether different.

The big tradeoff is that we will no longer be able to impose the “One True Way” on everyone else.