Part 1 of 3: What Crypto Governance Actually Is
When I was in university, I wrote a paper for my economics class titled: Anarchy Is the Only Path to Freedom.
The argument was simple:
Every structure of authority—government, corporation, institution—exists to serve itself first.
Power concentrates. Rules shift to benefit those who write them. And over time, the people inside these systems stop serving the mission and start serving their position within the hierarchy.
It doesn't matter how well-intentioned the founders were. It doesn't matter what values they claimed.
The structure itself creates the corruption.
Give someone the authority to make decisions for others, and eventually, they'll make decisions that benefit themselves.
Not because people are inherently bad—but because incentives inside hierarchies reward self-preservation over principle.
So the logic was clear:
If all centralized structures eventually corrupt, the only way to preserve freedom is to eliminate them entirely.
No rulers. No intermediaries. No gatekeepers.
Just individuals, coordinating freely, with no one holding power over anyone else.
I got an A. I thought I'd stumbled onto something profound.
Turns out, I was decades late.
Years before I wrote that paper, a group of cryptographers, programmers, and libertarians had reached the same conclusion.
And they weren't just writing papers.
They were building the tools to make it real.
They called themselves cypherpunks.
And they believed cryptography could do what political theory couldn't: eliminate the need for a trusted authority entirely.
This is the story of what they built—and what happened when their vision met reality.
“A Specter Is Haunting The Modern World”
In 1988, Timothy C. May retired from Intel at 34 to write "The Crypto Anarchist Manifesto."
At Intel, May had been a successful inventor. He'd discovered and solved the "alpha particle problem"—a flaw where cosmic radiation caused random bit flips in memory chips. His work secured Intel's future and made him wealthy enough to walk away young.
But in those years at Intel, he'd also watched something else:
The rise of digital databases tracking citizens.
Financial institutions centralizing control over transactions.
Governments building infrastructure to monitor communication—not through announced crackdowns, but through the quiet expansion of surveillance systems.
Privacy wasn't being stripped away through dramatic takeovers.
It was eroding through structural creep.
And like any good anarchist, May believed:
Every centralized authority—no matter how well-intentioned—eventually becomes a tool of control.
Not necessarily because people in power are corrupt.
Because the structure itself creates the incentives.
Give someone the authority to make decisions for others, and over time, the system will bend toward self-preservation rather than principle.
Having left Intel, May became captivated by cryptography.
He saw in it something political theory had never delivered: a technology that could eliminate the need for a trusted authority.
So he wrote a manifesto forecasting what cryptography would do.
He argued that cryptography—strong, unbreakable cryptography—would fundamentally alter "the nature of government regulation, the ability to tax and control economic interactions, the ability to keep information secret."
It would enable totally anonymous communication, untraceable transactions, markets beyond government reach, and individuals coordinating without institutions.
The vision was clear. Build systems where math enforces the rules, not people. Where code protects privacy, not laws. Where individuals hold power, not hierarchies.
"PRIVACY IS NECESSARY FOR AN OPEN SOCIETY"
Eric Hughes was a mathematician and computer programmer who, with May and John Gilmore, co-founded the Cypherpunk mailing list in 1992.
Where May came from engineering and saw cryptography as a weapon against government control, Hughes approached it differently: mathematics and logic.
He wasn't driven by anger at institutions or predictions of their collapse.
He was driven by a simpler conviction:
In a world moving toward digital communication, privacy wouldn't be granted by governments or corporations.
It would have to be built by individuals, for individuals.
His manifesto, A Cypherpunk's Manifesto, written in March 1993, laid it out clearly:
"Privacy is necessary for an open society in the electronic age. Privacy is not secrecy... Privacy is the power to selectively reveal oneself to the world."
"We cannot expect governments, corporations, or other large, faceless organizations to grant us privacy out of their beneficence... We must defend our own privacy if we expect to have any."
And then the line that defined the movement:
"Cypherpunks write code."
Two Manifestos, One Conviction
May said, "Crypto will destroy governments."
Hughes said, "We need to build privacy tools—because no one else will."
But both believed the same thing:
Centralized governance is incompatible with freedom.
Any structure with decision-making authority becomes a surveillance point, a control point, a corruption point.
The only solution: eliminate the need for centralized structures entirely.
Let cryptography do what politics couldn't.
From Ideology to Architecture
These ideas coalesced into core principles that would define the movement:
If centralized structures inevitably corrupt, then privacy becomes essential—the ability to act without surveillance.
If trusted authorities become points of capture, then systems must be designed to eliminate them entirely.
If power rewrites rules to serve itself, then immutability protects against that manipulation.
Individual sovereignty wasn't aspirational—it was architectural. The code would enforce what politics couldn't.
THE EXPERIMENT BEGINS
October 31, 2008.
A whitepaper appears on a cryptography mailing list.
"Bitcoin: A Peer-to-Peer Electronic Cash System" by Satoshi Nakamoto.
Nine pages of technical design. One sentence on governance:
"Proof-of-work is essentially one-CPU-one-vote."
That was it.
Miners compete to solve puzzles. The longest chain wins. Math decides what's valid.
No process for protocol upgrades. No decision-making authority. No coordination structure.
This wasn't an oversight.
Satoshi had implemented the cypherpunk vision: a system where code enforces rules, not people.
After three years, Satoshi passed the torch.
December 2010: Gavin Andresen becomes lead developer. No formal process. No defined authority. Just an informal handoff.
April 2011: Satoshi's last message:
"I've moved on to other things. It's in good hands with Gavin and everyone."
Then silence.
Satoshi disappeared, leaving no governance blueprint behind. No process for what happens when the community disagrees. No structure for coordination.
Just the code. And the assumption that the network would figure it out.
For seven years, it worked.
The community was small. Developers coordinated through mailing lists and forums. Changes happened through Bitcoin Improvement Proposals (BIPs)—developers would propose upgrades, discuss them publicly, and if a rough consensus emerged, miners would adopt the new software.
Informal. Messy. But functional.
The cypherpunk assumption held: no governance needed.
The network was coordinating. Decisions were happening. The code was running.
Then, in 2015, Bitcoin hit a wall.
The First Crack
The Bitcoin network was designed with a 1-megabyte block size limit. Each block could only hold so many transactions.
When Bitcoin was small, this wasn't a problem.
But as Bitcoin grew popular, blocks filled up.
Transactions backed up. Fees spiked—sometimes $20, $30, $50 just to send Bitcoin. Confirmations slowed to hours.
The network was clogged.
Transactions that used to be confirmed in minutes now took hours—sometimes days. Fees that were once pennies spiked to $20, $30, $50 just to move Bitcoin.
The system couldn't handle the growth.
Two visions emerged for how to fix it.
And no governance structure existed to resolve them.
For seven years, the cypherpunk assumption had held: no governance needed.
Now it was about to be tested.
Next: Part 2—When the Dream Broke: The Bitcoin Block Size War and Ethereum's DAO hack reveal what happens when governance returns
