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, Technology | Who | What | Flaw |
|---|---|---|---|
| 1844 Telegraph |
Morse et al | sending messages over wires allowed news to travel fast, including financial trades and commercial information | required network of wires |
| 1900 Radio |
Marconi et al | sending messages over radio waves avoided need for copper infrastructure | expensive, open, and soon controlled |
| 1973 IP, UUCP |
Kahn & Cerf | decentralisation of internetworking away from telcos led to innovations including independent email, file transfer | static, centralised allocation of IP# space & name space |
| 1975 Public Key Cryptography |
Diffie & Hellman | exchange of keys over distance | no persistency, MITM (conceived in secret by Ellis) |
| 1978 RSA |
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). |
| 1983 IBM PC |
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 |
| 1990 mobile |
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 |
| 1992 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 |
| 1992 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 |
| 1994 Cyberbux |
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 |
| 1994 Smart Contracts |
Nick Szabo | performance of contractual agreements handled by code prepared by the participants without ability to turn the computer off | no implementation |
| 1996 Ricardian Contracts |
Grigg | independent description of asset without registry permission | the underlying was still centralised |
| 1997 Triple Entry Accounting |
Boyle & Grigg | reliable accounting entries between firms | privacy implied the trusting of private signers |
| 1997 Hashcash, 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 |
| 1999 Napster |
Fanning, Fanning, Parker | distribution of music across network of computers | centralised directory still required to search |
| 2000 MojoNation |
Evil Geniuses for a Better Tomorrow | secure p2p data store with currency to mediate economic incentives | never delivered, arguably “too big” for the times |
| 2001 BitTorrent |
Bram Cohen | p2p file sharing protocol | free riders, attention from copyright owners |
| 2001 Distributed Hash Table |
distribution of directory | slow, complicated, subject to attacks | |
| 200x Skype |
Skype | chat, phone, video distributed over customers’s computers | corporate control led to change of protocol and breach of security claim |
| 2007 smartphone |
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) |
| 2009 Bitcoin |
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. |
| 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.