Timothy May is a cryptographer and cypherpunk who recently agreed to comment on the Bitcoin white paper at the request of Coindesk. His reflections resulted in a 30-page document on the history of cryptocurrency, the role of the state, and the ideals of cryptography. What is known about Timothy May and what role does he play in the development of the cypherpunks movement?

The 90s. Men in Masks. Wired

In 1993, three masked men were posted on the cover of the January edition of Wired. They were Eric Hughes, a mathematician at the University of California, Berkeley, and the author of A Cypherpunk's Manifesto, John Gilmore, a computer science specialist and one of the founders of the Electronic Frontier Foundation, and Timothy May, a technical and political writer who had previously worked as an electronic engineer at Intel, a founding member of the cypherpunk mailing list and the author of the Crypto-Anarchist Manifesto. The article in Wired was dubbed “Crypto-Rebels.”

In September 1992, Hughes, Gilmore, and May invited 20 close friends to the first meeting of the “physical cypherpunks” in Silicon Valley. Subsequently, the meetings became monthly. Participants met at Gilmore’s company Cygnus Solutions and discussed programming and cryptography. The group received its name from one of its members, the hacker Jude Milhon: she combined the words “cipher” and “cyberpunk” (a science fiction genre).

"A Specter Is Haunting the Modern World, the Specter of Crypto Anarchy . . . "

This is how the Crypto Anarchist Manifesto begins. May wrote it in 1988 and distributed among "techno anarchists" during the Crypto'88 conference and Hackers Conference. Later, May read this manifesto at the September 1992 founding meeting.

“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, via extensive re-routing of encrypted packets and tamper-proof boxes which implement cryptographic protocols with nearly perfect assurance against any tampering. Reputations will be of central importance, far more important in dealings than even the credit ratings of today,” May writes.

Everything that is now obvious in the crypto world, such as the position of regulators, privacy, accusations of using cryptocurrencies for illegal purchases and tax evasion, were far from obvious in 1988, 20 years before Bitcoin was created. And yet, even then, May pretty precisely described the crypto reality in its current form. “These developments will alter completely the nature of government regulation, the ability to tax and control economic interactions, the ability to keep information secret, and will even alter the nature of trust and reputation,” May said.

Indeed, regulators actively took up cryptocurrencies, and the desire to control the new industry arose simultaneously with the beginning of the “crypto fever,” as Bitcoin flowed from the hands of cypherpunks, developers and geeks into the hands of ordinary users. John Holmquist, the founder of Bitcoin Black Friday, called July 25, 2017, a "solemn day" when the U.S. Securities and Exchange Commission (SEC) "stepped into the Crypto realm." Then, the SEC published a report after investigating The DAO hack and recognized the DAO tokens as securities. “The Report confirms that issuers of distributed ledger or blockchain technology-based securities must register offers and sales of such securities unless a valid exemption applies . . . Whether a particular investment transaction involves the offer or sale of a security . . . will depend on the facts and circumstances, including the economic realities of the transaction,” says the official SEC website.

Since then, the U.S. Senate have held several hearings on cryptocurrencies, SEC Chairman Jay Clayton spoke to Princeton students on the nature of tokens, the SEC equated most ICO tokens to securities, demanding that the organizers comply with the law on traditional securities, and sent dozens of requests for information to crypto companies. And it goes this way not only in the United States. Regulators all over the world are tirelessly warning crypto investors about the risks and introducing new rules and prohibitions.

Regarding taxation, the U.S. Internal Revenue Service (IRS) began to regulate cryptocurrencies in March 2014 and it treats them as property, therefore taxing the purchase, sale, trading, and mining of cryptocurrencies. The struggle between taxpayers and the IRS continues, and the number of reporting crypto users is still small. The IRS, however, already won its first big case, as it obliged Coinbase to partially reveal user data after a multi-month trial.

Cryptocurrency also helps in keeping information secret, as May predicted. Although Bitcoin has obviously lost this race, some private altcoins justify the trust of their holders. For example, Monero passed a stress test last year, proving its privacy. Then, the law enforcement agencies proved unable to figure out how many Monero coins the owner of the Darknet site AlphaBay had.

“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 trade 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,” May writes. Drug trafficking, the sponsorship of the ISIL (banned in Russia), extortion. Bitcoin really opened the way to many illegal activities, and the DarkNet platform "Silk Road" became the loudest precedent. As May predicted, however, this does not stop the crypto machine.

May also grasped one of the main characteristics of future cryptocurrencies, namely, they will interfere with banks, because they will be faster, cheaper, and more reliable since there will be no third party. “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. Combined with emerging information markets, crypto anarchy will create a liquid market for any and all material which can be put into words and pictures. 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!” This is how the May's manifesto ends.

1988−2018: May about Cryptocurrencies 30 Years Later

May wrote a lot about cryptography, privacy, and “crypto anarchy” from the late 80s till 2003. In October 2018 Coindesk asked May to write his thoughts on the Bitcoin white paper, that is celebrating its 10th anniversary. Subscribers of the Metzdowd cryptography mailing list received a message from Satoshi on October 31, 2008, and that very message contained a link to the description of Bitcoin.

May said that he had been following the situation with Bitcoin and other cryptocurrencies for the past 10 years “with some interest, some amusement and a lot of frustration.”

May assigns Bitcoin one of the leading positions in a series of financial achievements, referring to it as "perhaps the most important development since the invention of double-entry book-keeping." He notes that in some aspects, Bitcoin fits its original description. It can be bought or mined, or quickly sent with a small fee, it is permissionless, it does not require centralized intermediaries, and the parties making transaction do not even need to trust each other. And despite all this, May calls cryptocurrencies “a tsunami that swept the financial world [and] also left a lot of confusion and carnage behind.” “What I see is losses of hundred of millions in some programming screw-ups, thefts, frauds, initial coin offerings (ICOs) based on flaky ideas, flaky programming and too few talented people to pull off ambitious plans . . . Satoshi did a brilliant thing, but the story is far from over. She/he/it even acknowledged this, that the bitcoin version in 2008 was not some final answer received from the gods.”

At the same time, May noted the tragic differences between the current system and the original idea of ​​Bitcoin: “I can't speak for what Satoshi intended, but I sure don't think it involved bitcoin exchanges that have draconian rules about KYC, AML, passports, freezes on accounts and laws about reporting "suspicious activity" to the local secret police. There's a real possibility that all the noise about “governance,” “regulation” and “blockchain” will effectively create a surveillance state, a dossier society. I think Satoshi would barf. . . we could end up with a regulation of money and transfers that is much the same as regulating speech. Is this a reach? If Alice can be forbidden from saying ‘I will gladly pay you a dollar next week for a cheeseburger today,’ is this not a speech restriction? ‘Know your customer’ could just as easily be applied to books and publishing: ‘Know your reader,’” This is how May see the path of regulatory transparency and compliance, on which many crypto space participants have embarked.

May also refers to a broader historical context, trying to analyze the national characteristics of countries and what forms it can take in a new crypto era: “It is tempting for some to think that legal protections and judicial supervision will stop excesses… at least in the US and some other countries. Yet, we know that even the US has engaged in draconian behavior (purges of Mormons, killings and death marches for Native Americans, lynchings, illegal imprisonment of those of suspected Japanese ancestry). What will China and Iran do with the powerful ‘know your writers’ (to extend ‘know your customer’ in the inevitable way)?”

Why Bitcoin?

May believes that the main characteristic that attracted the initial audience to Bitcoin was that it wasn't controlled by state. “If the project had been about a "regulatory-compliant," "banking-friendly" thing, then interest would've been small,” writes May, citing as an example the Secure Electronic Transfer project (SET), which was unnoticed and “mind-numbingly-boring.” It, too, was about electronic transfers, but at the same time it was “99 percent legalese.” Bitcoin was able to attract cypherpunks and, of course, a criminal audience, which, regardless of the high ideals of Ross Ulbricht, swarmed on his “Silk Road.”


“There will inevitably be some contact with the legal systems of the U.S., or the rest of the world. Slogans like "the code is the law" are mainly aspirational, not actually true. Bitcoin, qua bitcoin, is mostly independent of law. Payments are, by the nature of bitcoin, independent of charge-backs, "I want to cancel that transaction," and other legal issues. This may change. But in the current scheme, it's generally not know who the parties are, which jurisdictions the parties live in, even which laws apply. This said, I think nearly all new technologies have had uses some would not like. Gutenberg's printing press was certainly not liked by the Catholic Church. Examples abound. But does this mean printing presses should be licensed or regulated?” as May writes.

Two Roads

Today, a number of consortia formed by banks and large financial institutions are working on permissioned private corporate blockchains. May does not acknowledge this form of blockchain's existence, considering the general accessibility (‘permissionlessness’) to be one of the basic characteristics of decentralized systems. “The tension between privacy (or anonymity) and "know your customer" approaches is a core issue. It's "decentralized, anarchic and peer-to-peer" versus "centralized, permissioned and back door... This fork in the road in the road was widely discussed some 25 years ago. Government and law enforcement types didn't even really disagree: they saw the fork approaching.”

Bitcoin Is Not Another PayPal

May notes that for a long time the emphasis has been put on technology, resulting in too little attention paid to the “ideological positioning” of cryptocurrencies, their place in the financial system: “Most academic cryptographers were mainly focused on the mathematics of cryptology: their gaze had not turned much toward the "financial" aspects. . . there is not much of interest to many of us if cryptocurrencies just become Yet Another PayPal, just another bank transfer system. What's exciting is the bypassing of gatekeepers, of exorbitant fee collectors, of middlemen who decide whether Wikileaks — to pick a timely example — can have donations reach it. Attempts to be "regulatory-friendly" will likely kill the main uses for cryptocurrencies, which are NOT just "another form of PayPal or Visa." Remember, the excitement about bitcoin was mostly about bypassing controls, to enable exotic new uses like Silk Road. It was some cool and edgy stuff, not just another PayPal.”


Despite the fact that Bitcoin, in May’s opinion, did not become a precise, pure embodiment of Satoshi’s ideas, “bitcoin is basically doing what it was planned to do. Money can be transferred, saved (as bitcoin), even used as a speculative vehicle.” The situation is worse with “dozens of major variants and hundreds of minor variants where a clear-cut, understandable "use case" is difficult to find”: “Talk of "reputation tokens," "attention tokens," "charitable giving tokens," these all seem way premature to me. And none have taken off the way bitcoin did.”

According to May, an excessive amount of marketing around alternative cryptocurrencies won't accelerate their adoption: he believes that people do not have the resources to perceive this amount of information: “I think the greed and hype and nattering about "to the Moon!" and "HODL" is the biggest hype wagon I've ever seen... This is much more hype than we saw during the dot-com era. I think far too much publicity is being given to talks at conferences, white papers and press releases. A whole lot of "selling" is going on... The sheer number of small companies, large consortiums, alternative cryptocurrencies, initial coin offerings (ICOs), conferences, expos, forks, new protocols, is causing great confusion and yet there are new conferences nearly every week,” writes May, opposing this process of advertising and imposing to the emergence of credit cards and Bitcoin itself, which quite simply entered life without needing a large scale PR campaign. People cannot spend mental energy on reading technical documents that appear after weekly announcements and contentious debates. The costs of “mental transaction” are “too high, for too little.”

Final Thoughts

 “Don't use something just because it sounds cool…only use it if actually solves some problem (To date, cryptocurrency solves problems for few people, at least in the First World).”

 “Most things we think of as problems are not solvable with crypto or any other such technology (crap like "better donation systems" are not something most people are interested in).”

 “If one is involved in dangerous transactions – drugs, birth control information – practice intensive "operational security"….look at how Ross Ulbricht was caught.”

 “Mathematics is not the law.”

 “Crypto remains very far from being usable by average people (even technical people).”

 “Be interested in liberty and the freedom to transact and speak to get back to the original motivations. Don't spend time trying to make government-friendly financial alternatives.”

 “Remember, there are a lot tyrants out the.”