When I first got into the Toronto crypto meetup scene back in 2016, I vividly remember my first encounter with a new species of human. Watching them from afar, they looked like the kinds of people I might expect to see riding the subway at 3am in the morning.
But as they spoke they offered a clarity of perspective that was deceivingly attractive – these people had clearly spent a lot of time diagnosing the problems that I could sense myself but never properly identify. Instead of talking about why individual leaders sucked, they targeted the very power structures themselves – understanding the incentives and feedback loops that led to these structures (and how we might escape them). They talked about money in a way that was both clarifying and terrifying. Whereas I used to think a majority of political decisions were made based on cultural values, morals, and faith, it turned out that almost all of them were the downstream effects of economic structures that had been implemented decades prior.
It felt like I was peeking inside the computer at some mess of wires I was never supposed to see.
One could argue that in the years since then, cryptoanarchy went mainstream. Even before COVID, criticism of large institutions (ie FAANG) was already entering the collective consciousness. Google had long scrubbed their “don’t be evil” moniker, and the world was realizing that Mark Zuckerberg had built the most successful psyop engine of all time. He held vast amounts of unilateral power that could influence our most important elections, and this centralization of power was seen as increasingly problematic for the democratically elected free world. Here on the national stage, the entire American public was learning first hand why, as an organizing principle, this kind of centralization was incongruent with the kinds of freedoms that are inherent to the American identity.
Cryptoanarchy had also gone mainstream with regards to how people thought about money. Born out of 1980s hacker culture and rejuvenated by the Occupy Wall St movement, researchers like David Graeber encouraged us to see money and finance as downstream of social obligations and networks – not the other way around. This David vs Goliath mindset around financial institutions had permeated into the collective consciousness, and by 2020, droves of Redditors were coordinating their attacks on Wall St directly – by squeezing institutional capital that was shorting Gamestop, through the collective buy orders of many small retail traders. And, much to everyone’s surprise… it actually worked! Graeber sadly passed away 5 months before the GME short squeeze, but I’m quite sure he was up there cheering on Roaring Kitty from the rafters.
Simultaneously, at the heart of the crypto scene, cryptoanarchy was floundering. Gone was the era when the most attractive investments were futuristic hyperprotocols that could coordinate global n-sided markets through efficient trust mechanisms. By 2021 the most successful crypto companies were the ones who had most thoughtfully eschewed crypto-native values to meet customers where they were. Retail audiences didn’t care about sovereignty and custody, they wanted speed and ease of use. Investors didn’t care about protocols that would disrupt institutions, they wanted a quick 10x they could full-port. In this era, any crypto protocols which hadn’t raised large warchests were forced to either spin down or pivot – away from traditional “cryptoanarchy” that leaned heavily on unshakable values, in favor of meeting users where they are today.
Several years later, it feels like much of this cryptoanarchist current has gone cold. Almost all of the old cryptoanarchists I know have either left the space entirely, or have reframed their approach to align with the current needs of institutions.
But how tragic would it be, how ironic, that cryptoanarchy would die just as society came to need it most?
Take for example one of the most important cryptoanarchist values – that data privacy is a human right. For years this was thrown under the bus – “see, look at how many people are willing to transact pseudonymously on public ledgers? Nobody cares!” And yet, following the advent of large models that vacuum every bit of data available to them, public belief in privacy as a human right has never been stronger. Not only are users suddenly hiding their camera rolls from Instagram, they’re now spending their free time tracking (and sometimes defacing) Flock cameras. How unusual!
Or for example take the idea of permissionless technology. For years we were told that “retail audiences don’t care about self-custody or personal sovereignty”. That is, until businesses all started investing in on-prem models they could host and own, and individuals started stockpiling Mac Mini’s to host their own open-source models, so that Anthropic can’t tell them what they’re allowed to query. Suddenly everyone is a freedom maximalist! Compute is a human right! Code is free speech! Who knew.
Finally, take the simple question of trust vs verification. For years crypto builders prioritized architectures that could be audited from scratch, introduced minimal trust assumptions, and avoided any centralized points of failure where a small number of actors could disrupt the system. Then in the wake of “the market maturing”, we started to lean more and more on a small number of enshrined actors delivering “performant services”. We ignored the simple truth that cryptography primarily gifts us with efficient verification in order to help us coordinate without trust. This is useful not when the sun is shining and the hay is gold, but like a toilet plunger, for those rotten moments when unexpected outcomes arise: users get ADL’d, loans get improperly liquidated, markets get mis-resolved. In a world where every single digital system is now an attack surface for misaligned agents, the downside case we’re protecting against no longer feels like some long tailed event. Even if you trust your counterparty, do you really trust their opsec? You really shouldn’t.
Going back to our original question, it’s hard to see the death of the cryptoanarchist as anything but a premature suicide. Like Romeo ending his life thinking his love with Juliet was fated to end, one might never know what would have happened if the cryptoanarchists had stuck to their values and held the line. All this time they could have been investing their energy into bringing freedom-oriented values into every surface that users touch, vs building isolated islands of freedom that increasingly resembled the fintech incumbents they initially set out to replace.
Nonetheless, I still have hope that the cryptoanarchy of yore will return in full force under new banners, rejuvenated by a fresh set of fears – this time driven by AI rather than the global financial crisis. The qualities that made crypto enormously profitable 10 years ago will only become more true in the next decade: the opportunity to disintermediate massive incumbents who leverage their accumulated trust to extract rents and control markets.
At this point it seems unlikely the individuals championing these values will have read any of Graeber’s work, or that they’ll even be native to the crypto industry itself. Cryptoanarchists will be defined by their ability to predict the toilet bowl overflowing before they’ve even heard the first flush. Once you understand how the plumbing actually works, spending the extra cash on a plunger is a no-brainer.
