This book tells the largely untold story of digital cash and the people who sought to build it—some to bring down states and nations and create a utopia of ciphers, some to be rewarded by the collapse of global order, and some to spur the genesis of a machine by which they could live forever. It explains how cryptocurrencies came to be: the preconditions, the technologies and subcultures, and the ideas, fantasies, fictions, and models of the future behind Bitcoin’s first announcement.
The main argument of this book starts with the fact that it tells the story of digital cash in particular, rather than electronic money more generally. The work of making cash digital means creating an object that is trivial to transact over networked computers and easy to verify—to prove that it is what it appears to be—but impossible to forge or duplicate, and that can carry the information about what it is and what it is worth, without generating any information about how it is used or by whom.
This is a set of seemingly paradoxical and impossible demands: it must be available but scarce, unique and anonymous but identifiable and reliable, and easy to transmit but impossible to copy. It must have all these attributes in the context of technologies that were designed and built to make copies in their very functioning—costlessly, immediately, and perfectly.
The case I make to you is that the story of digital cash is best understood as a problem of knowledge in the larger history of currency itself. How do you know that a given currency token is valuable—that it can pass, that someone else will take it from you, that it can be settled and redeemed? The value of money in general—this intricate cultural microtechnology, this social medium—comes from powerful and often abstract beliefs about the way things are and the way they will be, as the first chapter of this book discusses in detail: the predictions, bets, and hopes that one kind of money will be accepted for payment of taxes, another will not be devalued by the market flooding with some rare metal or material, and that a social network of gifts, obligations, and reciprocities will hold for a third.
Zoom in from that lofty place to practice, to currency, cash, and coin. How do you know the value of this particular token of money? How are you sure of its identity, and how does it authenticate itself to you? We may know this through ductility, thermal conductivity, and sound: biting a coin, seeing how fast ice melts on it, the “ping test” of its chime when struck. We may know it from the smell and weight of a brick of compressed tea, the branding and bands on a cigarette, or through serial numbers, signatures, paper stock and fabric’s “hand,” and the security threads and watermarks on banknotes, letters of credit, or traveler’s checks. We know all these things in the context of training, habit, and prior experience. With this in mind, how would you create a digital currency?
I want to convince you that we should understand digital cash as part of the challenge of making digital data valuable, and that many of the more puzzling aspects of digital cash resolve themselves when they’re understood in terms of authentication, ownership, certainty, and proof for digital objects. The twin projects of digital ownership and digital cash always turn up together as the history told in this book unfolds, from building information marketplaces, to verifying anonymous statements, validating work and time, and battling counterfeiting and copying. In other words, this book is a history of how data was literally and metaphorically monetized.
The secondary argument I make is that the history of digital cash can also show us a particularly vivid example of the use of money and technologies to tell stories about the future. These stories are a way of making assertions, getting buy-in, placing bets, marshaling allies, and taking power in the present. Over the course of this book I describe several utopian and speculative monetary projects, major and minor. Each comes with its model of time, its stories and fantasies of history and the future, and its associated technologies—cryonics, varieties of cryptography, ocean-going cities—on which it draws for prospective value. All also face a translation challenge. They must explain and convince outside the small, homogeneous groups where they were created: those of almost entirely white American men from youth to early middle age, with backgrounds in engineering or software development—most of whom lived on the coast of California, shared political theories and beliefs, and knew one another through mailing lists and events.
All the speculative moneyers and mintmasters of this book work within their own particular historical condition: the Technocrats, diagramming prosperity with mechanical pencils on graph paper; the cypherpunks, undermining an anticipated totalitarian ultrastate; the Extropians, their frozen bodies launched like Pharaonic vessels into eternity, seeking disruptive chaos as fuel for a stellar motor; the libertarians and agorists and anarcho-capitalists and micronationalists and Objectivists and sovereign individuals, eagerly bracing for an oncoming collapse to validate their decisions, beliefs, and investments. Their work was in the prospective tense but required action in the present, from recruiting prototype communities to designing idea coupons to stockpiling weapons in anticipation of ruin—and all entailed either the production or the adoption of speculative currencies and digital cash. They shared this time frame with the seventeenth-century proponents of credit and fixed metallic money, who “aimed to explain and induce, persuade and gain momentum; if they succeeded in convincing an audience that could act, they could capture the future.”1
The project of this book can be summed up in a single phrase. Passing current is a term in the world of currency for money that is generally accepted for exchange, passing from person to person. The idea of the cash in your wallet being “current money,” though, holds true only because it is anticipatory money: the next person offered will take it, and it can ultimately be accepted in taxes or otherwise redeemed. Its present-time “currency,” the fact that it passes, is a product of its futurity. “Passing current” also appears in physics and electrical engineering, including the development of the transistors and computational hardware used in creating digital cash: this book is partially a story about the work of moving electrons down wires. Finally, and metaphorically, the “passing current” evokes the elapsing of present time—the passing of this current moment between the documented and narrated past and the predicted, desired, and feared future. The story of digital cash lies at the intersection of those three passing currents: the social puzzles of money, the technological history of computing, and our sense of our historical and future condition.
This book therefore has two goals. When you finish it, you will have a portrait of the components, concepts, and ideas of digital cash from experiments in the 1980s to the creation of Bitcoin. In this, you will see how data was cashed in, so to speak, and the trade-offs and struggles that process involved (particularly the surveillance of payments and transactions). You will also have a history of several near futures told through experimental money, and the different ways prospective and anticipated events were applied in the present. This goes beyond the history of utopian currencies to the prototypes, images, narratives, functional systems, and speculative designs that worked as techniques of futurity. I hope to enrich what you know about currency (digital and otherwise) and computation, and to show you how powerful fantasies of the future were—and are—told using money, machines, and stories together.
With all that in mind: I hope with this book to give you an experience, a whirlwind tour of many different systems of utopian desire, future fantasy, and experimental life, including brief sketches of many of the personalities and practices involved—some of whom may seem wrongheaded, dangerous, even willfully perverse. The itinerary includes prototype countries and mathematical challenges, a financial system to bring its creator back from the dead, nonconductive liquids, Xanadu hypertext, leaf money, objective values, currency panics, private spaceships, public randomness, American Technocrats in capes, cryptographers in chadors, high-seas autonomous zones, Grace Hopper playing basketball, libertarian silver, geodesic schemes, broken time machines, idea coupons, forged signatures, a wall of lava lamps, and a tank of frozen human heads.