By Adam Bhala Lough
Adam Bhala Lough is the award winning American director and screenwriter of the soon to be released documentary on cryptocurrencies and crypto- anarchists, “The New Radical” (watch excerpt). He writes* here on Bitcoin and the three-way struggle for its soul.
There is a war being waged for the soul of Bitcoin. On the one hand you have those who want to stay true to the roots of Bitcoin. The original programmers who were inspired by the Open Source movement and the Cypherpunk movement. They created Bitcoin with these tenets in mind: privacy, security, independence, self-reliance, and most importantly, freedom.
The other side of the battle can be defined in one word: legitimacy. You have those looking to give Bitcoin institutional legitimacy. Their aim is to regulate it. Their motivations are very different, however. There are those who see Bitcoin and see dollar signs. Let’s call them the bankers. They want to dress it up in a suit and tie. But to have it appeal to the angel investors of the world it must be safe, clean, free from any association with drugs, guns and dark markets.
And that leads us to our third group – let’s call them the Feds. These are the law enforcement and government regulators of the world who see Bitcoin as a threat. A way to launder money. A way to make purchases without any trace back to your name or identity. So in late 2013 when Bitcoin jumped to $1,000 per coin, from $13 a coin just the year before, battle lines became drawn.
That’s where I entered the fray with my camera in tow. On October 19th of 2013 I flew to Austin, Texas to meet with Cody Wilson the inventor of the 3D printed gun, The Liberator. I had no idea this meeting with the “21st Century Gun-Runner of the Internet” would lead me deep into the middle of a life or death conflict over the soul of Bitcoin and the group of young men on the front lines of that conflict. I first heard of Cody Wilson in June of 2013. I was driving through Beverly Hills on the way to another boring, dead-end Hollywood studio meeting when I heard a young man speaking on the radio. I was equally disturbed and intrigued by what Cody was saying. I am not a gun guy, I do not own a gun nor did I grow up in a house with guns. But a trait of my personality and a common theme between my films is my attraction to people on the extremes. People pushing against the system. Where others are repelled, I find these characters to be fascinating and my curiosity led me to Cody Wilson’s front door step.
When I arrived in Austin on a rainy October morning in 2013, we began shooting within an hour of dropping my luggage at the La Quinta Inn. Day 1 was chock full of great content – We went to a gun range, Red’s, where Cody was spotted by one of the employees who geeked out like a celebrity had walked in and just wanted to shake his hand and thank him for his service. We went to a local BBQ joint. Then that night we drove to the outskirts of town to visit the tiny closet where he created The Liberator, the world’s first workable 3D printed gun. It was all great stuff but all of it I had expected.
Day 2 everything changed. The next morning Cody notified me he had a Skype call with some anarchist hackers living in a squat outside Barcelona. Together, he and these hackers were planning a new project. And they were about to launch this project on Indiegogo the same way he initially launched the Liberator before being kicked off the crowdfunding platform for violating their legal policy by attempting to crowdfund the manufacture of a gun. On the Skype call were a few young hackers, all with foreign accents from various nations. One, Vitalik Buterin, would go on years later to receive acclaim and huge amounts of money for launching a new cryptocurrency called Ethereum. These hackers were dry, emotionless and frankly boring, except for one. Amir Taaki immediately jumped out at me. His childlike enthusiasm was contagious. He was full of life in a way very few people are. After the Skype call ended I immediately started to ask Cody questions about Amir. Cody gave me the lowdown while flipping through Google and showing me various articles and photos of Amir.
Apparently Amir was famous in the Bitcoin scene already. He had been around since the very beginning of Bitcoin and there were even rumors he was the infamous Satoshi Nakamoto – the name used by the unknown person or persons who designed Bitcoin and created its original reference implementation. Whether Amir was Satoshi or not, I still do not know but what I do know is Amir was integral to the creation of Bitcoin, a fascinating character living in a squat somewhere in Spain and I had to have him in part of my film, so that is what I did. Through Cody’s trust and vouching for me I was able to create a strong filmmaker/subject relationship with Amir and start filming with him after a few months of courtship. So I had my two main characters now, an unlikely duo. Cody Wilson, a white, Texan law school drop-out and 2nd amendment freedom fighter and Amir Taaki, a British Iranian hacker and squatter. They made a strange pair together. You wouldn’t expect them to have anything in common. Yet what they did share in common was the desire to upend governmental and financial structures and bring power to the masses through the use of technology. The stage was set.
There were Crypto Anarchists on one side. The Bankers and the Feds on the other. And at stake was the future of Bitcoin. The battle for the soul of Bitcoin can be traced back to the Crypto Anarchist Manifesto written by legendary Cypherpunk Timothy C. May in 1992 and posted to the Cypherpunk mailing list. This online list was a very active forum with technical discussions ranging over mathematics, cryptography, computer science, politics, philosophy, and personal arguments. An early member of this list was a 23 year old Australian hacker named Julian Assange. The Crypto Anarchist Manifesto was a call to arms that predicted the online drug marketplace Silk Road a full 21 years before Ross Ulbricht programmed it. To put it into perspective the year Tim May wrote this manifesto McDonald’s opened it first restaurant in China. Hurricane Andrew hit Florida. Bill Clinton became president and AT & T released its first video telephone for $1,499. I’d like to read you a portion of The Crypto Anarchist Manifesto because I believe its words will prove as uncannily prescient to you as they did to me.
A specter is haunting the modern world, the specter of crypto anarchy. Computer technology is on the verge of providing the ability for individuals and groups to communicate and interact with each other in a totally anonymous manner. Two persons may exchange messages, conduct business, and negotiate electronic contracts without ever knowing the True Name, or legal identity, of the other. Interactions over networks will be untraceable… The State will of course try to slow or halt the spread of this technology, citing national security concerns, use of the technology by drug dealers and tax evaders, and fears of societal disintegration. Many of these concerns will be valid; crypto anarchy will allow national secrets to be traded freely and will allow illicit and stolen materials to be traded. An anonymous computerized market will even make possible abhorrent markets for assassinations and extortion. Various criminal and foreign elements will be active users of CryptoNet. But this will not halt the spread of crypto anarchy. Just as the technology of printing altered and reduced the power of medieval guilds and the social power structure, so too will cryptologic methods fundamentally alter the nature of corporations and of government interference in economic transactions… And just as a seemingly minor invention like barbed wire made possible the fencing-off of vast ranches and farms, thus altering forever the concepts of land and property rights in the frontier West, so too will the seemingly minor discovery out of an arcane branch of mathematics come to be the wire clippers which dismantle the barbed wire around intellectual property. Arise, you have nothing to lose but your barbed wire fences!
Fast forward 25 years later. Cody and Amir along with a group of hackers known as UNSYSTEM put the finishing touches on the beta version of the Dark Wallet, an encrypted wallet that masks transactions making the buyer and seller anonymous. They release a YouTube video as part of a launch of their crowdfunder. The video instantly goes viral among the Bitcoin community. Suddenly the pendulum has swung from the Bankers and the Feds toward the Crypto Anarchists as they make a bold play to take back the soul of Bitcoin and bring it to its roots. The Dark Wallet crowdfunding video and the $50,000 dollars the Indiegogo page quickly raises garners the attention of the Feds. Specifically FinCen, – the Financial Crimes Enforcement Network, one of the US Treasury Department’s leading agencies in the fight against money laundering. As well, the Dark Wallet falls under investigation by both the IRS and DOJ’s cybercrime divisions.
I would journey to San Francisco where I would interview the IRS agent Tigran Gambarayan, a young Russian immigrant in charge of investigating Dark Wallet. He carried a gun on his hip and told me in detail about his recent investigation and arrest of a law enforcement agent on the Silk Road case who extorted millions of dollar worth of Bitcoin from Ross Ulbricht, the same guy he was supposed to be building a case against, and then tried to launder the money using his Secret Service badge to force a bitcoin exchange in Luxembourg to give him cash. It was the first major Bitcoin heist in history. Tigran also admitted on camera he was watching Amir Taaki. I drove across town to interview Katy Hahn, head of the cybercrime unit at the Department of Justice. She also admitted she was investigating Cody and Amir after hearing them brag on the radio about Dark Wallet being a money laundering tool. And she told me how ISIS had just put a memo out about the Dark Wallet and its usefulness as a tool to send Bitcoin to the mujahideen across the Middle East without being tracked by authorities.
Then, that year the Bitcoin community witnessed its first major arrest Post-Silk Road, when 23 year old entrepreneur and founder of BitInstant, Charlie Shrem was busted for money laundering. Shrem was a young, successful and idealistic Brooklyn based Bitcoin millionaire. In 2013 Cody Wilson and I visited him while he was under house arrest at his parent’s place. Cameras were rolling. Shrem was the first of a number of Bitcoin entrepreneurs to be arrested and convicted in the aftermath of the Silk Road. The Feds and the Bankers were sending a clear signal to the community – disobedience will not be tolerated. The irony that Shrem did 2 years for laundering the equivalent of $1 million of Bitcoin while only one banker was sent to prison in the wake of the 2008 Financial Crisis was not lost on the Crypto community. Many argue that the financial crisis was what lead to the creation of Bitcoin and the need create a safe and secure decentralized crypto currency not controlled by a central bank, or any one person or group for that matter.
A few months after Shrem went to prison Amir Taaki disappeared. He stopped answering my phone calls, my emails and my text messages. Cody had no idea where he was either. I assumed he was on the lam running from a financial crime warrant. There were rumors Interpol was looking to bust him for the Dark Wallet specifically (even though the app wasn’t even officially launched). Weeks of silence turned into months, which turned into a year and finally about a year after my last communication with him I got a pgp encrypted email. It read, “Hi, I’m in Syria. The Dark Wallet is dead. What I am doing now is far more important.” It turns out Amir was fighting ISIS on the front lines in Rojava. He was embedded with the Kurds, with a Kalashnikov and a uniform, helping to liberate the Anarchist society that had formed there in Rojava out of the ashes of a once great nation destroyed by Western meddling and warmongering. Dark Wallet development had ceased. A true final version of the wallet was never finished. Today it does seem the bankers have won the battle for Bitcoin’s soul. Bitcoin’s total market cap is nearing 100 Billion dollars, bigger than Goldman Sachs. As of today one Bitcoin is worth $6421. When I began shooting this film it was around 400.
But there is hope for the Crypto Anarchists. Recently Amir left the Middle East for Barcelona where he is now active in the squats forming a Hacklab – a live/work commune space where Crypto products can be made and developed safely. I texted him yesterday via the encrypted Signal app and asked him if there were any other notable developments in the hacker space. He pointed me to a group called Paralelni Polis and their Institute of Crypto-anarchy in Prague. The members of this group boast on their website of hacking into a live broadcast of Czech Television and a “virtual interaction with politician’s mobile phones.” The aim of the Institute of Cryptoanarchy is to encourage a parallel decentralized economy, crypto-currencies, and other conditions for the development of a free society in the 21st century. As their website statement page reads, “New technology brings the possibility of choice – we are in a time that is defined by The Crypto Anarchist Manifesto. With a fast internet connection, reliable anonymity and decentralized currency, you preserve freedom which we have been losing as a society.”
© Adam Bhala Lough 2017 All Rights Reserved
* This article is a transcript of a speech delivered at Indie Memphis on November 2, 2017.