Crypto-anarchism

Crypto-anarchism is a philosophy that expounds the use of strong public-key cryptography to enforce privacy and individual freedom. Crypto-anarchists aim to create virtual communities where everyone is absolutely anonymous or pseudonymous. In such virtual communities the physical identities of the pseudonyms are almost entirely untraceable. Crypto-anarchists believe that inside their communities is the only place where they can be totally free, because in all other communities there will always be someone that will listen to what they say and know who they are. They also believe that privacy is to reveal one's self selectively and unless one can do that as one wishes, there is no privacy. Inside these cryptographic networks it is nearly impossible to know the physical identities of whom one is talking to unless the speakers wish to reveal themselves. Development of methods of surveillance, and in particular the spread of Internet communication opens unprecedented powers of computer surveillance. Crypto-anarchists consider the development and use of cryptography to be the main defense against this, instead of political action. They (and cypherpunks) argue that the laws of mathematics are stronger than the laws of man, and that crypto-anarchism therefore is inevitable: As long as there is a minimum of free speech, it is impossible to stop people from transmitting encrypted messages. In spite of this, it is already illegal to use strong cryptography itself in some countries. To enforce a ban on the use of cryptography, however, is probably impossible, as cryptography itself can be used to hide even the existence of encrypted messages (see steganography). It is also possible to encapsulate messages encrypted with illegal strong cryptography inside messages encrypted with legal weak cryptography, thus making it very difficult and uneconomical for outsiders to notice the use of illegal encryption.

Plausible deniability
Crypto-anarchism relies heavily on plausible deniability to avoid censorship. Crypto-anarchists creates this deniability by sending encrypted messages to interlinked proxies in computer networks. With the message a payload of routing information is bundled. The message is encrypted with each one of the proxies and the receiver public keys. Each node can only decrypt its own part of the message, and only obtain the information intended for itself. That is, which node is the next hop in the chain. Thus, it is impossible for any node in the chain to know anything else but the previous and next node in the chain or what information they are carrying to the receiver as those parts of the information is hidden. The receiver also does not know who the sender is, except perhaps by another destination, digital signature or something similar. Who originally sent the information and who is the intended receiver is nearly impossible to know. See Onion Routing for more information.

Thus, with multiple layers of encryption, it is effectively impossible to know who is connected to any particular service or pseudonym. Because summary punishment for crimes are illegal, it is impossible to stop any potential criminal activity in the network without enforcing a ban on strong cryptography, and this is probably impossible, as seen above. Of course, such freedom could be abused by criminals. Crypto-anarchists claim that those people are already communicating pretty much anonymously - the networks will just bring the benefits such as privacy and freedom of anonymity to the ordinary people. It is even difficult to say which country's laws will be ignored, as even the location (country) of the participants is unknown. In a sense, the encrypted, anonymous networks (the "cipherspace") can be regarded as an independent, lawless territory.

This technique is used to avoid being detected while sharing copyrighted or otherwise illegal information, such as movies, music, computer games and information that the users are too afraid to share on the ordinary internet. It could be anything from anti-state propaganda, reports of abuse, whistleblowing, reports from chinese dissindents and child pornography. The latter is a major problem in Freenet, but in future versions of the software it might be possible to avoid spreading some of that information, as Freenet becomes more of a friend to friend network.

Anonymous trading
Untraceable, privately issued electronic money and anonymous internet banking exist for these virtual communities that can be used to trade anonymously. DMT and Yodelbank were examples of two such anonymous banks. This is easier to achieve for information services that can be provided over the Internet. For example, the developers of I2P receive anonymous/pseudonymous monetary support from the I2P community. Providing physical products is more difficult as the anonymity is more easily broken when crossing into the physical world. Untraceable money makes it possible to ignore some of the laws of the physical world, as the laws cannot be enforced without knowing people's physical identities. For instance, tax on income for online services provided pseudonymously can be avoided if no government knows the identity of the service provider.

Final note
This should not be confused with the use of the prefix "crypto-" to indicate an ideology or system with an intentionally concealed or obfuscated "true nature". For example, some would use the term "crypto-fascist" to describe an individual or organization that holds fascist views and subscribes to fascist doctrine but tries to hide this agenda from those outside of itself. However, Timothy C. May's "Cyphernomicon" indicates that the term "crypto-anarchist" was partially intended as a pun on this usage, even though he did not intend to conceal his beliefs or agenda.