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, TechnologyWhoWhatFlaw
1844
Telegraph
Morse et alsending messages over wires allowed news to travel fast, including financial trades and commercial informationrequired network of wires
1900
Radio
Marconi et alsending messages over radio waves avoided need for copper infrastructureexpensive, open, and soon controlled
1973
IP, UUCP
Kahn & Cerfdecentralisation of internetworking away from telcos led to innovations including independent email, file transferstatic, centralised allocation of IP# space & name space
1975
Public Key Cryptography
Diffie & Hellmanexchange of keys over distanceno persistency, MITM
(conceived in secret by Ellis)
1978
RSA
Rivest, Shamir, Adelmanpersistent psuedonymous identity capable of controllingthe identity of user was unknown, MITMs led to CAs as CVP.
Patented (expired early 2000s).
1983
IBM PC
IBMdecentralized power of computing away from IT, with Unix and the minicomputer dealt the 1-2 death blow to IBM’s quasi monopolyMS-DOS 🙂 i86 🙂
1990
mobile
GSMreplaced copper to solve last mile problemmassive 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-Leeinter-firm distribution of informationshortage of IP#s, difficulty of coding “websites”, complexity of servers led to commercialisation then centralisation
1992
Web of Trust
Zimmermansigned statements of acceptance over a key could be relied upon by a community formed of those with PGP keysno definition of “acceptance,” “responsibility,” “recourse” etc meant no meaning, no value
1994
Cyberbux
DigiCashissuance of a “monetary” unit outside a government over the InternetLimited to a centralised server and was quickly contained in a regulatory sense to banks
1994
Smart Contracts
Nick Szaboperformance of contractual agreements handled by code prepared by the participants without ability to turn the computer offno implementation
1996
Ricardian Contracts
Griggindependent description of asset without registry permissionthe underlying was still centralised
1997
Triple Entry Accounting
Boyle & Griggreliable accounting entries between firmsprivacy implied the trusting of private signers
1997
Hashcash,

Proof of Work
Back & othersProof of non-sock puppet, distributed costs on othersProof of wealth – no cap – those with more money (energy) could price out the market
1999
Napster
Fanning, Fanning, Parkerdistribution of music across network of computerscentralised directory still required to search
2000
MojoNation
Evil Geniuses for a Better Tomorrowsecure p2p data store with currency to mediate economic incentivesnever delivered, arguably “too big” for the times
2001
BitTorrent
Bram Cohenp2p file sharing protocolfree riders, attention from copyright owners
2001
Distributed Hash Table
distribution of directoryslow, complicated, subject to attacks
200x
Skype
Skypechat, phone, video distributed over customers’s computerscorporate control led to change of protocol and breach of security claim
2007
smartphone
Apple + Androiddecentralised 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 NakamotoNakamoto 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.
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