Why the fight for Bitcoin to exist might not be over yet
It took years of struggle to keep encryption free of government control
Art by Crystal Le
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It’s satisfying to think that Bitcoin has won. After all, the sitting US President himself is a big fan.
Regulators are, meanwhile, paying it little mind, at least publicly, while many of Wall Street’s largest operators support bitcoin trading and even offer ETFs directly to their customer base.
The US strategic reserve is the ultimate cherry: Bitcoin — both the asset and the underlying blockchain — are now formally intertwined with the health of federal finances, even if that’s only marginally so compared to gold.
Sounds bullish. But it’s enough to make any card-carrying cypherpunk a little nervous.
There’s a lot of precedent for the government wanting to monitor crypto and personal data.
Thirty years ago, activists were gearing up to rally against a new Senate bill that would’ve made encryption tools, as we know them today, outright illegal.
On June 27, 1995, Senator Chuck Grassley introduced the so-called “Anti-Electronic Racketeering Act.” Grassley was the chairman of the Senate Judiciary Committee subcommittee on administrative oversight at the time.
Today, he’s President Pro Tempore of the Senate, the third in line for succession of the Presidency behind the Vice President and Speaker of the House.
Grassley sought to crystallize an existing drive from the Clinton administration to ensure the government could decrypt any and all encrypted communications, indefinitely, under the guise of protecting society from criminals and other baddies who might want to hide their wrongdoing from authorities.
At the time, the administration was pushing for a government-backed hardware encryption system known as the Clipper Chip, which used a classified encryption algorithm known as Skipjack.
Such an implementation would require two US government agencies to keep copies of all encryption keys related to Skipjack in escrow. This was meant to be a national standard for secure voice and data communications, but the public itself was not to be mandated to use Skipjack.
Grassley’s bill took it one step further by criminalizing the use of computers to facilitate racketeering, particularly through the lens of encryption. The most offensive provision was for a “universal decoding device” for any encryption method that would need to be shared with the Justice Department — meaning the only legal forms of encryption were those that could be easily decrypted by the US government.
The proposed law would’ve also made it a crime to distribute encryption software that didn’t have a backdoor over any network accessible to foreign nationals, which of course, included the internet.
US authorities were mulling whether to prosecute legendary cypherpunk Phil Zimmermann over his creation and dissemination of the source code to Pretty Good Privacy (PGP), one of the first-ever encryption tools available to the public.
PGP’s source code had been uploaded online and printed in book form to sidestep US export restrictions that were central to the Crypto Wars of the ‘90s. After years of probes, no charges were ever brought against Zimmermann.
Grassley’s bill never made it off the ground, thanks in no small part to the barrage of denouncements from tech professionals, scholars and activist groups — including the Electronic Frontier Foundation, Computer Professionals for Responsibility, and the Electronic Privacy Information Center, among others.
Obviously, Bitcoin could never exist if the US government had a secret backdoor to everyone’s private keys. It’s not unimaginable that at some point in the past decade and a half of discourse, officials might have hoped that a backdoor would be possible.
The conversation around encryption has clearly evolved since 1995. The same can be said of Bitcoin over the past five years.
But in a world where Bitcoin is on par with gold or oil for strategic and economic importance to the most powerful governments on the planet, would those governments be inclined to stay hands off?
Perhaps Bitcoin is impervious to that level of influence.
But odds are that it won’t go without saying — as was the case with Grassley’s bill.
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