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Crypto-anarchism is a philosophy that expounds the use of strong public key cryptography to enforce privacy and therefore 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 totally 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 you say and know who you are. 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 defence against this, instead of political action. Crypto-anarchists believe that privacy is to reveal one's self selectively and unless one can do that as you wish, there is no privacy. Inside the crypto-societies it is impossible to know the physical identities of whom you are talking to unless the speakers wish to reveal themselves.
Untraceable, privately issued electronic money and anonymous internet banking are being developed for these virtual communities that can be used to trade anonymously. This is easiest to achieve for information services that can be provided over the Internet (such as consulting, programming, etc.) Providing physical products is more difficult as the anonymity is more easily broken when crossing into the physical world. Untraceable money would make 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. Of course, such freedom could be abused by criminals. But crypto-anarchists claim that those people are already communicating pretty much anonymously - the cryptosocieties 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 Internet (or 'cyberspace') can be regarded as an independent territory. 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).
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.
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