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It is time to revisit Neal Stephenson’s 1999 novel Cryptonomicon with respect to the modern rise of the blockchain and cryptocurrency. The influence of this book cannot be overstated within certain circles. Peter Thiel even went on the record as stating that Cryptonomicon was “required reading” during the early days of PayPal, which is rather remarkable. Aside from Thiel’s obvious enthusiasm, Cryptonomicon was nominated for a Hugo, nominated for the Arthur C. Clarke Award, and it won the Locus Award for Best Science Fiction Novel in 2000. I love the book for a great many reasons, and I am certainly not an outlier.
I decided to write this article to be as spoiler-free as possible, so I will not be discussing the plot of the book aside from a few vague references to what the protagonists hope to achieve.
As far as the novel, the narrative primarily jumps between a plot circa the late 90s and events occurring before and during World War II. The modern-day protagonists hope to establish an underground data haven in a secure location where it can exist with minimal interference from big government entities interested in snooping around a person’s personal and financial data. To this end, they select the fictional island nation of Kinakuta for various political and geographic reasons that the novel enumerates in detail.
Cryptonomicon, published in 1999 remember, discusses anonymous financial transactions, electronic currency, and of course cryptography. Oh, by the caduceus of Mercury, does it discuss cryptography and its history. This not only plays a role in the plot, but a great deal of the modern history of cryptography is the plot!
Now having said that, as a note to any potential future readers, do not hesitate on that count. Cryptonomicon is definitely not a dry historical retelling. There enough violence, mystery, sex, conspiracy, and death to entertain anyone who is interested enough to read this article to begin with, and it is all topped off with Neal Stephenson’s infamous techno-geek humor and all sorts of brilliant situational humor involving historical characters. As you might guess I recommend this novel immensely, but you will —intentionally or not— learn a lot of real world science and history as you work your way through the story. But I digress—
Now astute readers will have already assembled the pieces as to how this all relates to blockchain technology such as Bitcoin. Anonymous financial transactions, electronic currency, and crypto? Yes, Neal Stephenson was riding the crest of the cypherpunk revolution with this novel. He managed to hit the nail on the head in describing the "what" if not the specific "how" for the blockchain revolution that has now driven Bitcoin prices to record levels and will certainly continue to develop into a multi-billion dollar industry as the technology matures, even disregarding the current bubble.
But there is one more thing worth mentioning, Stephenson even got the "what" of the last piece of the puzzle right, (again just not the "how"). Remember the data haven I mentioned at the beginning of this article, located on the fictional island, Kinakuta? In a decentralized, peer-to-peer blockchain, we are ALL the nation of Kinakuta. Or, if we are being technical, by analogy everyone who chooses to participate by running a node in this peer-to-peer network effectively has a full copy of the "Kinakuta" data haven!
One part of the genius of Satoshi Nakamoto, the still anonymous person (or persons) responsible for Bitcoin, was in realizing that the most resilient possible network is the omnipresent one. There is no head to lop off, no realistic way to root out thousands of nodes. Unlike the fictional Kinakuta, you cannot threaten a distributed blockchain network with invasion or nuclear strikes. You cannot wheedle or cajole any head-of-state or CEO to capitulate to the demands of another country or hostile authority, because (ideally) a well-designed blockchain has no central authority that can be co-opted. You cannot sabotage or shut the power off to any centralized data haven because the peer-to-peer network for the blockchain is being simultaneously run on tens-of-thousands of computers scattered across the globe.
Cryptonomicon was not just influential but prescient in anticipating the blockchain. And within it, we find a rallying cry for cypherpunks and cryptocurrency and blockchain advocates everywhere—
WE ARE KINAKUTA
WE ARE THE BLOCKCHAIN