’97 | Anybody interested in some hash(cash)?

By Till Antonio Mahler

Photo by Clem Onojeghuo

Hello there courageous wanderer and welcome to blockwhat?. You have covered quite some way so far. Even though the peak of Mount Blockchain is still looming in the distance, don’t worry, we will get there, step by step.

In today’s story you’ll get to meet Adam Back (a prolific cryptographer and international arms dealer), one of the few people who actually had direct contact with Satoshi Nakamoto (the legendary creator of Bitcoin). We will take a look at the ingenious solution he proposed to combat a great annoyance (that we all know too good, unfortunately) and also talk about a famous, now defunct, mailing list. Let’s get started, I promise you this will be exciting!

This article is part four of our journey. If you’re new here and want to understand what’s going on, just click here.

If you’re curious to explore more blockchain aspects, including the technology behind it, fascinating use cases and great resources to learn more about this mind boggling new paradigm, click right here.

Welcome to the 90s.

Contrary to pundits like Robert Metcalfe who in 1995 predicted that

“[…] the Internet will soon go spectacularly supernova and in 1996 catastrophically collapse.”

we are seeing a growing popularity of the global cyberspace and an increasing adoption of personal computers, that fortunately don’t live up to the predictions of Popular Mechanics in 1949:

“Computers in the future may weigh no more than 1.5 tons.”

Our story today plays out in the midst of the exploding popularity of the internet. Instead of going supernova, it did the opposite! Wee started to see the first killer app that lead to a growing and fast increasing adoption of computers and the internet in the form of an electronic messaging service, also known as e-mail.

Let’s do a brief excursion into the history behind email. It all started when a guy named Ray Tomlinson developed an electronic networked messaging service for ARPANET in 1971 , the Pentagon’s computer network.

As the networks within the organization became more and more complex, a problem quickly arose. How could one clearly indicate where a message was supposed to go to?

Tomlinson came up with this little symbol “@” — most likely the contribution that will endure as his longest lasting one to the internet. Over the course of the 1980s, email hosting services slowly picked up pace and for many people it was the first practical application in the internet!

Ever since then, we have seen an explosive growth of emails, evolving from 55 million users in 1997 to over 3.8 billion expected email users before the start of 2019.

Along with the growing popularity of email and its countless advantages and positive sides, there was something really really annoying waiting in the pipeline.

Spam.

The concept of spam is nothing new to the mediums of communication, long before desperate Nigerian princes and frantic Hong Kong bankers proposed attractive financial arrangements or virtual pharmacies wanted to sell you Viagra, this concept of tricking people into buying something pointless was existent.

All the way back in the middle of the 19th century telegraph lines were used to send dubious offers to wealthy Americans!

The story behind the name for this annoying phenomena is super interesting — it is no coincidence that this great internet annoyance shares the same name as this “delicious” food product that was invented in 1937.

Source

Back then, a lot of people were hesitant to eat canned meat that didn’t need refrigeration (understandably!). Spam eventually had its big breakthrough in the second world war, when the US Army used it to nourish their troops all around the world. To keep the sales up after the end of the war, they hired singers to promote the product and had even their own radio show!

The instance that eventually linked the name of this product with the annoying connotation is has today was this famous sketch by Monty Python:

In late 1994 two immigration lawyers inundated Usenet, an early news aggregator site in the internet, with advertisements for their services and later published a book about it. In it, they described how to effectively spam the internet and earn money with it — Pandora’s box was opened.

Spam quickly filled the digital highways. Still nowadays, 45% of all emails (14.5 billion emails) are spam!

So much for the history of email and spam. You’ll soon see, why we started our journey today with an excursion into these lands of annoyance.

Now let’s get to the meet the character who is the focus of today’s story — Adam Back.

Source

Back is a well-known British cryptographer and computer scientist who had a fascination for the intersection of both these subjects from an early career on. It was only a natural fit that in the beginning he would work for Nokia, exploring the potential for using electronic cash on cell phones. This wasn’t what he got famous for though.

Neither was him being an international arms dealer (sort of). Turns out, that in the 90s, the United States Government wasn’t too keen to have cryptographic tools leave the country (or be seen by foreign nationals in general) and to find widespread usage (always this urge for privacy, ugh..). Under the Arms Control Export Act, sandwiched neatly in between particle beam weapons and laser targeting systems, was cryptographic software.

Adam Back, in a rebellious move, started to produce and sell t-shirts, that had the PGP (Pretty Good Privacy) encryption protocol printed all over them.

This whole episode takes place within a context known as Crypto Wars, which is a highly interesting story on its own!

But let’s get back to Adam Back and the focus of this story.

Technically speaking, while is ingenious idea was related to money, this wasn’t the ulterior motive behind it. Adam Back wanted to free us from the incredibly annoying and useless flood of spams that knocks on our doors, day in and day out.

In 1997 he proposed a potential solution to effectively combat spam to the Cypherpunk mailing list — an idea he called Hashcash.

Hashcash builds on the idea that some sort of cost should be introduced to use unmetered services online, such as emails. A core part at the essence of his solution is based on public key ecryption (remember DigiCash?)

The way Hashcash works is as follows:

Imagine you want to send your friend Bob an email. After you’re done writing about the awesome marching band camp you had last weekend, you click on send.

Before this email leaves your computer and rides the digital highways all the way to its final destination, Bob’s computer, something is happening under the hood of your computer.

In order to send your email, your computer needs to solve a mathematical problem, which is based on hashing. What’s that sorcery you might find yourself asking?

Well, we’ll explore in-depth how exactly hashing works and how it is applied in blockchain technology in a future article, for now this basic explanation shall suffice.

A hashing algorithm takes an input (this can be literally anything), runs it through some magic mathematical processes and then creates a unique output. In the case of Hashcash, it takes the resulting number (which is a hexadecimal number)and converts it again to a “regular” number. Just for fun, let’s go through this process and create a hash of the sentence “Most of the time travellers worry about their luggage.”

SHA-256 hash: 55D0EFF51767341750B8FAB75244CB884310452916D17EA877B43AE16F468B6B

Now we convert this number to a regular number (without all those letters):

38815752444080001506796615622473361021972495275593571116449038316656126233451

What’s super important and special about these hashing algorithms is, that the tiniest change in the input completely alters the output! For example, if we repeat the same process explained above and add a comma to the sentence “Most of the time, travellers worry about their luggage.”, we get something completely different.

SHA-256 hash:

5D19B0D0BC503AAABC02D41F2678DFF069F169FA432E0FC29117B067562A993C

After conversion to a “normal” number:

42110486429720890832477449913210526866979833963311173423128674162412345792828

As you can easily see, it is almost impossible to calculate the hash from the second sentence by looking at the first hash. The only way to correctly get the corresponding hash, is by hashing the two sentences individually. These type of mathematical problems are really easy to compute into one direction, but not into the other. And they’re super easy to verify.

Adam Back used this property for Hashcash, by creating the following problem that needs to be solved before your email can be send: he takes the metadata (where it’s going to, from whom it is coming) of the recipient’s email and adds a random number to it. All this data is now hashed, which results in a certain number.

Now things get tough for your computer. If you translate the “normal” hash from above into binary, it becomes a number consisting out of 0s and 1s. Now the goal for your computer is to find a hash that has a certain amount of 0s in the beginning of it.

Since it is impossible to calculate the right hash without knowing the added random number, your computer needs to guess which number it could’ve been. This is known as a brute-force approach.

Your computer will need a couple of seconds to guess all kind of hashes until it finds the right one — now nothing stands it the way of your email anymore! Once it arrives at Bob’s doorstep, Bob can easily verify the answer given by you.

If you simply send one or a few emails, this process is almost unnoticeable to you. But if you’re a malicious spammer, who want to send millions upon millions of spam emails, suddenly the time and the processing power it takes, is immense. And all this computing power needs electricity. Electricity that you’ll need to pay for. Voila.

This process is known today as Proof-of-Work. We will go in-depth into this fundamental building block of the first blockchain in another article.

Hashcash was actually implemented by a couple of companies, the biggest ones being Microsoft (at one point) and Mozilla Thunderbird. Yet, it failed to catch on in a sustainable fashion.

On a little side note, I think it is important to highlight that Hashcash wasn’t the first idea on this issue to be postulated. In 1992, Dr. Cynthia Dwork and Dr. Moni Naor published their research on how to combat junk-mail. Their proposed system used a different mathematical approach though. Adam Back’s idea was the one being used by Satoshi Nakatomo.

We’re almost at the end of this story, but there is one last thing that I’d love to tell you about. A little, now defunct, mailing list that played an essential role in facilitating the exchange and discussion of ideas.

It was known as Cypherpunk.

First started by three friends in 1992, it quickly evolved into one of the most important places in the nascent internet to discuss topics surrounding privacy and freedom.

“Privacy is necessary for an open society in the electronic age. Privacy is not secrecy. A private matter is something one doesn’t want the whole world to know, but a secret matter is something one doesn’t want anybody to know. Privacy is the power to selectively reveal oneself to the world.” — Cypherpunk Manifesto, 1993

Many of the people around who our journey revolves formed part of this mailing list, broadcasted their ideas to it for the first time and connected with each other. Notable members were David Chaum (check him and the birth of digital cash out here), Adam Back, Wei Dai, Hal Finney and eventually Satoshi Nakamoto!

I hope that you thoroughly enjoyed the read today and walk away with a more nuanced understanding of the history predating the advent of blockchain. Please let me know if you have any questions, want some clarifications or have some feedback for me!

All the best

Till

PS: if you’re looking for helpful and great resources to learn more about blockchain’s paradigm shifting technological potential, check out these awesome resources.