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.
|Morse et al||sending messages over wires allowed news to travel fast, including financial trades and commercial information||required network of wires|
|Marconi et al||sending messages over radio waves avoided need for copper infrastructure||expensive, open, and soon controlled|
|Kahn & Cerf||decentralisation of internetworking away from telcos led to innovations including independent email, file transfer||static, centralised allocation of IP# space & name space|
Public Key Cryptography
|Diffie & Hellman||exchange of keys over distance||no persistency, MITM|
(conceived in secret by Ellis)
|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).
|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 🙂|
|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|
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|
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|
|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|
|Nick Szabo||performance of contractual agreements handled by code prepared by the participants without ability to turn the computer off||no implementation|
|Grigg||independent description of asset without registry permission||the underlying was still centralised|
Triple Entry Accounting
|Boyle & Grigg||reliable accounting entries between firms||privacy implied the trusting of private signers|
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|
|Fanning, Fanning, Parker||distribution of music across network of computers||centralised directory still required to search|
|Evil Geniuses for a Better Tomorrow||secure p2p data store with currency to mediate economic incentives||never delivered, arguably “too big” for the times|
|Bram Cohen||p2p file sharing protocol||free riders, attention from copyright owners|
Distributed Hash Table
|distribution of directory||slow, complicated, subject to attacks|
|Skype||chat, phone, video distributed over customers’s computers||corporate control led to change of protocol and breach of security claim|
|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)|
|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.|
Roolo, OpenBazaar, Lighthouse, Auger, …
|many||“decentralise all the things”|
decentralisation of many market services previously thought to be centralised
- 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.