Cryptohippie Co-Founder Paul Rosenberg: Decentralized Crypto Systems Will Allow Future to Happen


Paul Rosenberg, CEO and co-founder of VPN service called Cryptohippie and author of the Freeman’s Perspective newsletter, is also known as a man who wrote A Lodging of Wayfaring Men, a book instantly called a cryptoanarchist Bible.

A major influencer in the cyber-underground and a lifestyle capitalist with a broad range of interests and experiences under his belt, Paul Rosenberg also predicted a decentralized cryptocurrency and cryptomarkets many years before they actually happened. His current passions include philosophy, theology, history, psychology, and physics.

This diverse interest base is reflected in his extensive repertoire of published titles – aside from A Lodging of Wayfaring Men, those include Breaking Dawn, another must-read for any freedom-minded individual, The New Age of Intelligence, a book he co-authored with Jonathan Logan, and over 50 engineering and construction books.

Prior to this, his highly successful engineering career saw him called as an expert witness in numerous legal cases and recruited as a consultant to a number of high profile organizations, such as NASA and the US military. He developed and taught 19 continuing education courses for Iowa State University’s College of Engineering. He also co-founded the Fiber Optic Association and wrote the first ever standard for the installation of fiber optic cables.

In recent years Paul Rosenberg has repeatedly visited Paralelni Polis, a cryptoanarchist hub in Prague, and on the latest occasion at Hackers Congress 2018 in the beginning of October ForkLog spoke to him, discussing a number of issues ranging from what is wrong with the society today to the ways and tools that can be used to change things.

Photo: Paralelni Polis / Pavel Sinagl

ForkLog: Mr. Rosenberg, this is not the first time you are speaking here in Prague in Paralelni Polis. What ideas do you want to introduce this time?

Paul Rosenberg: This time I’m speaking on a very particular subject. You know, we’ve always been the people who are interested in cryptography and blockchain and all these things. At the beginning we were a very small community, that was growing and growing, and then the question arises: “What happens if things go the way we would like them to?” A system eventually changes, however fast or however slow it happens. And if we get the life that is more the way we want? What would we do about certain problems in the world if things go our way? If we win, what happens to a lot of other people?

We don’t force anyone to do anything our way, but if 50 percent of the population eventually does things the way we like, everyone else will kind of have to come along. So what happens then to the people who are old? To the people who are sick? To the people who are on a pension? What happens to them? If we get our world the way we want it, we really have to think about what happens to these people.

The truth is that it turns out very well for them. But it needs explaining as to why is it going to be okay and what fills the gaps and how do we do this. This is what my presentation is about.

ForkLog: What are the major flaws the society in its current form is experiencing that cryptotechnologies can fix?

Paul Rosenberg: The current world system, and this includes just about every place there is, is built upon a very very old, very archaic, model, a worn-out old model. This is the model where we have one man or a group of people who make the rules on how everyone else will live, who’d punish everyone else who doesn’t do what they say, who take everybody’s money by force, and in many cases it’s half of their money or more, and who sends young people off to fight and die in wars by force.

This model has been going on since the Bronze age. It is hopelessly out of date. Now, we never say it this way, but the basic model of this civilization, the thing that happens every day when we see everything from road signs to policemen to letters from the government is “do what we say, or we will hurt you.” This is really what we live by. And that is a horrible model for human cooperation. It’s the opposite of cooperation. “Do what we say or we’ll hurt you” is not cooperation.

What we need is a way of cooperating, because right now, we grow more than enough food for everybody, we know easily how to build enough houses for everybody, we know how to build cars, roads, and refrigerators, and everything else. It’s not a problem anymore, we know how to have enough stuff for everybody. Yeah, not everybody’s going to get a Ferrari, but everybody can have a reasonable car. All you have to do is cooperate. That’s all we have to do. And this existing system can not handle cooperation on that scale. It’s proven again and again, and it’s very inefficient in that way.

So, what we need to move to is the system that allows free cooperation. And decentralized systems give us a tool to allow us to do that. The reason is the systems we have now are all hierarchical: command and control. It’s all by force. And worse than that is that interactions are all forced interactions, and communication is damaged: “you do this or I’ll hurt you”. If you try to transfer information this way it doesn’t work very well. But if you have a decentralized system, everybody can communicate with everyone in any way they’d like.

This system isn’t perfect, but it makes us able to cooperate efficiently and much better than we are now. This is the kind of system that allows the future to happen. The current system can’t. It can’t and it won’t. Because we don’t need them anymore, really don’t.

The people in this room and the room downstairs [at Paralelni Polis] are morally better than politicians, at least the most part of them. And we’re saying that this better people should not be listened to, should not be given power, should not have the power over their own life, but we should give the power to the people we know are corrupt. That’s what the existing system says and enforces. And what we’re saying is that everybody should have their own responsibility for themselves.

Will things go wrong? Of course, things will go wrong! We’re talking about actual humans here. Some of us do stupid things. All of us do stupid things sometimes. But an individual human making their own decisions can correct their errors. Once an error is written into hierarchy, you can’t change it. But if all of us in this room made a mistake, we won’t do it again next year. But in a hierarchical system it’s written, that’s it, it doesn’t change. It’s a good model for computers, but a bad model for human beings.

ForkLog: Earlier this morning there was a press conference and there was this idea that we are all organized at this level, we are doing things like Paralelni Polis, and we are distancing ourselves from the current political situation. There are authorities, but we are doing our own things. Meanwhile, there is the example of Iceland and the Pirate Party who have similar ideas, but they realize those ideas differently. They got some representation in their political system and they are trying to push their ideas via the existing political system, via the Parliament. Maybe this is one of the ways to change things? Is it a viable alternative to the “disobedience” path many people are talking about?

Paul Rosenberg: I’m not in favor of that. I understand what that people are doing. But they are just making thing “less bad.” I understand the argument behind making it less bad. But I think it doesn’t really help in the end, because even if you take over a system that uses the bad model, that uses force on people, it comes down to “do what we say or we will hurt you” again. Fine. But it’s still the same.

Change actually happens way too slow for most of us to like, but it happens between people over the years, and then finally the old system can’t contain them anymore. That’s what happened with the early Christians and the Roman empire. At first, Rome didn’t know what to do with them, then the authorities started prosecuting them here and there. But all through the 100s, 200s, and 300s, these Christians were talking to their neighbours and friends and their ideas were spreading, and then the other Romans said: “Wait a minute, why do we want to kill this guy? I know him, I buy my milk from him, he’s a nice man. Yes, he has different beliefs, but you shouldn’t kill him.” An the Roman authorities lost the support of their own people. And soon the mighty Roman empire lost to Christianity.

I don’t like that this way changes come slowly, but it’s just the way it is. We need to just keep changing and putting in good ideas. We can’t transit to the Space age with Bronze age rules. We know it’s barbaric, we know the politicians are liars and thieves, everybody knows this. This isn’t a minority opinion anymore. Are these the people that we should have telling us what to do and how to live? They don’t live right and they’re going to tell us how to live? They will force thing upon us? This is not sensible. But right now people are afraid even to think about these things. If you talk about government being Stone age, people going to talk quietly. There is an old Roman saying: “When the man flees, he condemns.” If we lower our voice, we’re condemning.

ForkLog: What is the actual practical solution that can be applied to accelerate the changes today?

Paul Rosenberg: First of all it’s cryptocurrencies. What a nice thing! I mean, it’s got its problems, it needs work, it needs new things, it needs new types of products for people who aren’t tech savvy. But this is a system that’s inherently liberating. When you enter Bitcoin or Zcash or whatever cryptocurrency system you use, you enter it as an equal, there’s nobody holding a sword over you saying “you’ll do what I say or I’ll hurt you.” This is a new world, this is the future. Right here, right now on Earth. It’s not perfect, but that’s why we have all these people here trying to make it better, expand it. In this type of systems there is no boss.

Sometimes humans make stupid things, but if you go outside, you’ll see that almost everybody drives their car well, most people drive well most of the time. Most people behave pretty well most of the time. When I drive to work I pass thousands of people. I may remember one guy driving bad, but 999 go unnoticed. That’s the problem. We should notice the 999 and pay attention to them because they are doing well.

Most people in the world are pretty good. They can have a bad day and have their little problems here and there, but for most of their life they do well. Why don’t we do that as a model, rather than “everybody is a terrorist, everybody is a monster, everybody is a threat, and we have to protect ourselves from everyone, so we should hire a big guy with a big sword to protect us.” It’s a bad model.

Photo: Paralelni Polis / Pavel Sinagl

ForkLog: Tell us about more about your VPN service, Cryptohippie. How is it different from dozens of other such services?

Paul Rosenberg: Our VPN always has two or three hubs bouncing signals from place to place. We use ephemeral keys, so after things are done, it never existed. We have multiple layers of security. We also have different companies. We have one company that owns and runs the network and a different company in a different jurisdiction with non-identical ownership that does all the customer service. This way there is never a single point of failure.

I manage the sales side and I don’t know what goes on in the network. I mean, sometimes they tell me about their plans and sometimes I help do things, but I don’t know anything about the user information on the network side. I know who buys and who sells, if they give me their information. If they buy with BTC I won’t know their name, unless they send me a credit card. We are going to be adding much more payment methods, but right now it’s BTC and credit cards. I know it’s not ideal. But we have all sorts of security measures.

We have an anonymity network. We have servers all over and we cluster traffic at the exit nodes. It’s no good if you have security, but it’s only four people at the exit node. For a big security service it would be easy to find out who you are. But if you have a large number of people all coming and going through that exit, it is much harder. It’s somewhat similar to what mixing services do for the Bitcoin network, but with traffic. It’s really well done. Our network people are superb.

ForkLog: Where did the “hippie” part of the name come from? The sixties are, well, sort of over.

Paul Rosenberg: Not for me (laughs). Actually, the hippie part of this concept is, well, yeah, we make money, and we like free markets, but it’s not just about money. We made a decision before we started, that if we ever get into a situation where we could really raise our prices because we were the only one or something like that, we wouldn’t do it. We want to make a fair price, but we don’t want to just go and get every last penny we can get. And we want to take good care of our customers. After all, we want to run a business we’re proud of. We want money but we don’t want to do this just for money.

When we started Cryptohippie, we all had different careers. We all had other things we were doing. I tell you the story about how it started. I’ve written a book called “A Lodging of Wayfaring Men” and it was anonymous at the time, I didn’t put my name on it first. I met Johnathan, our network guy, in an encrypted chat room, one of the early cypherpunk chat rooms sort of thing. We talked, we got to know each other and became friendly and talked a lot. Then one day he said: “You’re the guy,” and I said “What do you mean?” and he said “You wrote that book,” and I asked what makes him think so and he had a very good analysis and said “My wife said I can trust this guy.” I said “ok, don’t tell anybody, but I wrote it.” And then he told that we need to talk.

We were both living in Northern Europe at the time and we decided to meet in person. We met on a cold morning at the old cathedral and we drove around for five days talking about everything. At the end of the last day he said “meet me at the bar.” He came very serious and he said “freedom has to exist somewhere, and right now the internet is the best thing we have to achieve it.”

There was a lot of problems with the internet and we knew of the NSA already, we didn’t have all the details we have now, but we knew pretty much. He said “people are trying to do that but they aren’t doing it very well,” and I said “yeah, I know.” Back in the day we had anonymous proxies, which were fine in the 1990s, but they’re not OK anymore because surveillance has changed so much. He said he knows how to do it right, and he was very very good at these things, but he also said that he couldn’t do it alone, and offered to do it together. And I said “yes,” and that’s where Cryptohippie began. That was the real motivation behind it: “freedom must exist somewhere.”

ForkLog: Unfortunately, today we can see that young people are too negligent about their privacy, not really caring too much about it. What would be your advice to parents about the best ways to bring these ideas to the next generation?

Paul Rosenberg: I think it’s important for parents, especially when the children are old enough, to be very gentle, not to push or to force them. Teenagers need to develop their own mind and identity, they can’t be a copy of their parents. It is important for parents to be a good example, and wait until their kids say “why are you doing that?” Then parents should explain that it’s because there are people using what you say to manipulate you, and they think they can make a lot of money by taking a snapshot of who you are and selling it to people. How much money does Google make every month? They get the money from the people who want to manipulate us. And they are getting very good at it. They are doing all these things to you under the name of “it’s free,” but it’s not free. They’re taking your life and selling it to other people. You don’t feel pain immediately, but it changes the world you live in.

We have all those security services as well, that are taking everybody’s information and arrest people every now and then for saying something stupid online. In China, if you don’t say the right things about the government, you can’t fly an airplane or get along for a house. This is the kind of model that’s coming and it’s coming quickly. I think this model is bad for humans, and that’s why I do this. And be gently with the kids and let them come in their own way. It’s hard to be a teenager.

Paul Rosenberg was interviewed by Andrew Asmakov

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