A short history of decentralisation in financial cryptography

Financial cryptography is what we sometimes call the space between finance and cryptography, which is a pretty big spectrum. But fun and exciting nonetheless! There is a lot of prior work, extending back to the 1980s, and a lot of different threads.

Following is a list of events that led up to current times, focussing on one particular narrow thread – decentralisation in financial cryptography.

Year, Technology Who What Flaw
1844
Telegraph
Morse et al sending messages over wires allowed news to travel fast, including financial trades and commercial information required network of wires
1900
Radio
Marconi et al sending messages over radio waves avoided need for copper infrastructure expensive, open, and soon controlled
1973
IP, UUCP
Kahn & Cerf decentralisation of internetworking away from telcos led to innovations including independent email, file transfer static, centralised allocation of IP# space & name space
1975
Public Key Cryptography
Diffie & Hellman exchange of keys over distance no persistency, MITM
(conceived in secret by Ellis)
1978
RSA
Rivest, Shamir, Adelman persistent psuedonymous identity capable of controlling the identity of user was unknown, MITMs led to CAs as CVP.
Patented (expired early 2000s).
1983
IBM PC
IBM decentralized power of computing away from IT, with Unix and the minicomputer dealt the 1-2 death blow to IBM’s quasi monopoly MS-DOS 🙂 i86 🙂
1990
mobile
GSM replaced copper to solve last mile problem massive expensive wireless network led to standards to frequency controls to centralised telcos to SIMs to control vector to modern surveillance society
1992
world wide web
Tim Berners-Lee inter-firm distribution of information shortage of IP#s, difficulty of coding “websites”, complexity of servers led to commercialisation then centralisation
1992
Web of Trust
Zimmerman signed statements of acceptance over a key could be relied upon by a community formed of those with PGP keys no definition of “acceptance,” “responsibility,” “recourse” etc meant no meaning, no value
1994
Cyberbux
DigiCash issuance of a “monetary” unit outside a government over the Internet Limited to a centralised server and was quickly contained in a regulatory sense to banks
1994
Smart Contracts
Nick Szabo performance of contractual agreements handled by code prepared by the participants without ability to turn the computer off no implementation
1996
Ricardian Contracts
Grigg independent description of asset without registry permission the underlying was still centralised
1997
Triple Entry Accounting
Boyle & Grigg reliable accounting entries between firms privacy implied the trusting of private signers
1997
Hashcash,

Proof of Work
Back & others Proof of non-sock puppet, distributed costs on others Proof of wealth – no cap – those with more money (energy) could price out the market
1999
Napster
Fanning, Fanning, Parker distribution of music across network of computers centralised directory still required to search
2000
MojoNation
Evil Geniuses for a Better Tomorrow secure p2p data store with currency to mediate economic incentives never delivered, arguably “too big” for the times
2001
BitTorrent
Bram Cohen p2p file sharing protocol free riders, attention from copyright owners
2001
Distributed Hash Table
distribution of directory slow, complicated, subject to attacks
200x
Skype
Skype chat, phone, video distributed over customers’s computers corporate control led to change of protocol and breach of security claim
2007
smartphone
Apple + Android decentralised the CPU from desktop/laptop to *all* the people including developing world, split net between ISP & telco (wireless network still massive and expensive)
2009
Bitcoin
Satoshi Nakamoto Nakamoto Signature – PoW consensus from Byzantine herd (DMMS) Nash eq. meant only one issue. Did not solve the developer problem, inability to evolve.  Speed of light /v/ shared ledger.
2013
Roolo, OpenBazaar, Lighthouse, Auger, …
many “decentralise all the things”

decentralisation of many market services previously thought to be centralised

assumes blockchain?

 

Notes:

  • This is by no means a complete list.
  • I might update it as better information comes to light.
  • Only things that speak to decentralisation are presented.  Things like the famous Chaumian blinded signature did not really do that, they spoke to privacy instead.