Cypherpunks: The Founders of Cryptocurrency

Ioanis Philippakos, ESADE Business School

The advent of the internet is one of the most significant innovations in modern human history. It granted many possibilities, including interconnectedness, e-commerce, streaming services, financial transactions, digital economies, and dating apps.

In September 1992, a group of notable, free-thinking, and optimistic programmers held a meeting in the San Francisco Bay area to discuss the innovation. They were faithful about the internet and what it could bring to humanity. However, there was a lingering issue that bothered them: privacy. Your transactions expose your behavior – as shown on your credit card statement, for example – allowing credit card companies, retailers, and governments to access your data (thus removing anonymity). The individuals who worked on remedying the issue became known as “Cypherpunks.”

A co-founder of the Cypherpunk movement, Eric Hughes had created a private email list named, unsurprisingly, the “Cypherpunk Mailing List.” Members of the list would communicate via encrypted messages and discuss anything related to cryptography and privacy philosophy. Subsequently, the Cypherpunk Manifesto was born. The main idea of the manifesto’s message is as follows: when I buy something online or make a financial transaction, my identity is revealed, thus removing my right to privacy. We [the cypherpunks] have a mission to create anonymous systems so that you, the average internet user, can surf the internet with complete anonymity.

The dream was simple: build a system in which no entity – governments or banks – can access an individual’s identity through their financial transactions. Many had attempted, all had failed, until one system made its debut in 2009. Bitcoin: the fulfillment of Cypherpunks’ dreams.

Cypherpunk Influence on Bitcoin

Proof-of-work (POW) systems are widespread among cryptocurrencies. It was initially created by Adam black, a British Cypherpunk, to fight against spam email and, accordingly, denial-of-service (DoS) attacks. Consequently, he created Hashcash, a system the majority of spam emails futile. Hal Finney, also a Cypherpunk, improved Back’s POW and named it reusable-proof-of-work (RPOW). The subtle difference was Finney’s idea is that POW could be reusable, so the work that initially went into creating it would not have to be duplicated. In theory, RPOW could have made Hashcash economically valuable, yet Finney and the cypherpunk community never saw its potential – until Bitcoin.

“Announcing the first release of Bitcoin, a new electronic cash system.” A modest yet revolutionary announcement by Bitcoin’s founder – and Cypherpunk – Satoshi Nakamoto.

These cypherpunks, among others, created the backbone of cryptocurrency. Although most are unknown to the everyday person, their brilliance and dedication are precedents for financial revolutions. Today internet privacy has become a prevalent issue. It has been shown with Cambridge Analytica (2016 U.S. Presidential Elections), Facebook’s privacy violations, and the auctioning of social media users’ data to third parties. We must take action against data theft before it becomes a norm. Cypherpunks set the privacy endeavor in motion, and it is our, the peoples’, responsibility to realize it.


Frisby, Dominic. Bitcoin: The Future of Money? Unbound, 2014.

Hughes, Eric. A Cypherpunk’s Manifesto, 1993,

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