Here is the link to the interview in German at Die Zeit Online:

http://www.zeit.de/2008/20/II-Gesellschaft_-InterviewHastings?page=1

And here is a an English translation:

PRIVATE WAS YESTERDAY

DIE ZEIT, 08.05.2008 No. 20

Photo (c): Sarah Shatz, Die Zeit, Delta E

The American computer security expert Sean Hastings lives in the USA and advises organizations and companies. His recent book is titled “God Wants You Dead”

Sean Hastings advises you to keep only really important secrets

DIE ZEIT: Rather radical – your data security idea from the year 2000: To set up your computers on an air defense station off the English coast, where no government had access…

Sean Hastings: It was about the right to disseminate what you want on the Internet, unmolested by governments. There may still be a market for that.

Zeit: Today there seems to be a different pressing data protection problem – governments and enterprises spy more than ever on the net.

Hastings: Yes, mostly secretly and electronically, by using viruses, Trojan horses, with hacker methods. For these issues it does not help to to set up your computer at a far place.

Zeit: How does one protect oneself against the Schnuefflern?

Hastings: There have been many companies, which made highly effective systems for anonymous surfing and communicating available on the Internet. But rarely have they found enough customers to make this very profitable. These things will be successful in the long term only free of charge, built into all browsers and E-Mail programs. Like so many today use built in cryptography for things such as home banking.

Zeit: Because people are unwilling to pay for privacy?

Hastings: There is still another better reason. What drives the cost of using encrypted e-mail and similar matters higher, is that they can draw attention. If you use an encryption program for your e-mail use, people can immediately see that a message has been encrypted. So whoever is interested in people who have something to hide, can systematically search for such e-mails.

Zeit: There must be a way to solve that problem.

Hastings: This requires still more effort. There is a technology called Steganography, with which secret messages are hidden in apparently everyday files, such as in photos and videos. Of these millions are dispatched per hour around the world. This is not noticeable to anybody.

Zeit: Do you have recommendations for such programs?

PART 2

Hastings: there are many of them on the internet that are even free of charge. My recommendation is to use only those that make their code publicly available on the Internet. Then a whole world of experts can try to break the coding methods. This increases your chance of security enormously.

Zeit: What would you recommend to people, who really want to keep their secrets to themselves?

Hastings: First of all steganography. Second, great care to make sure that no traces of unencrypted messages can be found on their computer. At a minimum they should encrypt everything on their hard drives. Even safer, however, is a computer that has no hard drive, but boots each time from a DVD-ROM containing their encryption program.

Zeit: The other privacy problem on the internet is that whether you surf or downloading a music file or do anything at all, you are observed at every turn.

Hastings: Use someone else’s Internet connection for that! Then you can’t be blamed.

Zeit: Now seriously.

Hastings: I mean that seriously! Nearly everywhere in the civilized world there are free hotspots for the Internet – unencrypted connections, which some neighbor has left open. Nobody can know that it was you who went online. Although every computer sends a so-called MAC address to the wireless network, so that in principle it can be identified, this can be easily forged: You install a program, and then its effortless.

Zeit: That is not a solution for surfing from home..

Hastings: If you are using a wireless connection at home, then you leave it open, without encryption or entrance barriers! You can always say, “How, did someone hack the computers of the Minister of the Interior from my Internet address? They must have used my wireless network. For weeks I have planned to set up a password, but I just never got around to it…”

Zeit: Many people voluntarily send everything about themselves to sites such as MySpace, on the Internet – including address, consumer habits, private photos…

Hastings: Of course, and the scammers can use this. But I am not sure whether this is all negative. It lets other people know what you want them to know.

PART 3

Zeit: The half naked photos of yourself as a young person partying? The future boss could be the prudish type…

Hastings: (laughs) We should eventually expect everyone to have such pictures of themselves on the Internet. Then nobody can afford more to be so prudish.

Zeit: That cannot be true! One expert for data security and secrecy we interviewed says: Should everything you do be on the Internet?

Hastings: Okay, seriously now: There is no privacy anyway. No one should expect it anymore. Not only you are getting all kinds of other people putting all sorts of information about you on the net. Our whereabouts are constantly monitored. Cameras are getting smaller.

Zeit: If its like that, should one not bother to try to surf and send messages secretly?

Hastings: No, but you should make it clear: It requires special effort to keep a secret, not just in the realm of electronics but also in choosing whom to trust. Otherwise, you must assume that everything is public, whatever you are doing.

Zeit: What sort of secrets do you have that are worth this kind of effort?

Hastings: I have no reason to answer that question.

The interview was conducted by Thomas Fischermann

The American computer security expert Sean Hastings decided in 2000 that America was no t a safe place for his computers. So he took them to Sealand, to an inhospitable former air defense station in the English Channel, which had been occupied into the 1960s by an eccentric Brit and been declared an independent principality. From there Hastings sold server collocation to a geheimniskrämerische clientele, afraid of public access. Today he lives again in the U.S. and advises organizations and companies. His recent book is titled “God Wants You Dead“

BROOKE GLADSTONE: Sean Hastings was the co-founder and CEO of HavenCo. Enron never was a client. The only customers interested in HavenCo were on line gambling brokers. In fact, when someone proposed some actual illegality – streaming Hollywood films – HavenCo crumbled. But Hastings never lost heart.

SEAN HASTINGS: Doing it was an interesting political statement – to say here is the internet, and you’re going to have to stop trying to regulate it, because it’s just not going to work. It’s going to flow across borders freely. We started with an area which had fallen through the cracks and kind of had no law.

BROOKE GLADSTONE: And that would relate to free speech, but it would also relate, at least in terms of HavenCo’s initial idea, to financial invisibility – everything from shielding emails from government scrutiny to money-laundering.

SEAN HASTINGS: Indeed, and the whole cypherpunk ideology that I was a part of at the time was in that direction, that transactions talking about who owed what to whom very much were speech; they were just information flow. It was just data, and any attempt to regulate these things, in the long run, just hurts everybody.

BROOKE GLADSTONE: Do you think there should be any restrictions on web content?

SEAN HASTINGS: No, I, I don’t think there should be any restrictions on speech at all. Speech should be protected, and anybody should be able to say whatever they want, pass any information along that they want.

BROOKE GLADSTONE: One of the rules that HavenCo did subscribe to was no child porn.

SEAN HASTINGS: And that was a concession to the people that had created Sealand. They thought that that was the worst possible thing that could be done; that people might come after us for, and probably so. You look at things that are evil and wrong, and laws have been passed to make content based on that also evil and wrong.

BROOKE GLADSTONE: So perhaps there is a commonly held set of ethics that simply the cyber world subscribes to, and I don’t know whether you do or you don’t.

SEAN HASTINGS: I, I don’t know what those commonly held set of ethics are, but I have no problem with the idea of turning off a channel you don’t want to listen to. I think that’s the main control that should be put on speech. If you don’t want to hear what somebody is saying, you don’t listen.

BROOKE GLADSTONE: We were told that one of the main reasons why HavenCo went under is because a lawyer there was very nervous when the idea came up to stream movies. They were afraid that pressure would come from America on England, who would disrupt HavenCo’s operations. Is copyright a big issue for one of these non-governmental structures that you want to create?

SEAN HASTINGS: One of the things that we were very much hoping to do was have a place that would challenge the whole idea of copyright.

BROOKE GLADSTONE: And you don’t believe in intellectual property rights?

SEAN HASTINGS: I don’t believe in intellectual property rights at all. I really don’t. I believe that the whole concept of property, as it is used to benefit society, is used to allocate scarce goods. Ideas are not scarce goods. In fact, the whole beauty of them is that they’re not – that they transfer from one person to another, and you don’t lose it when you give it to somebody.

BROOKE GLADSTONE: You’ve moved on to something called “seasteading” now. Can you explain what that is?

SEAN HASTINGS: I’ve been working with a few other people, and we have been talking about the possibility of floating structures in international waters and creating communities where basically there are no rules but what the people want for themselves. We’re looking to create a new frontier, basically, where new ways of living and doing things can be tried out, outside the restrictions of current society. We’re actually currently at a time where the frontier has vanished, or maybe the only place left right now is the, the surface of the ocean.

BROOKE GLADSTONE: But you’re not talking about, you know, a floating nudist colony. You’re talking about basically communications networks.

SEAN HASTINGS: I believe that advances on the way we’re living now occur through the creation of new ideas, and new ideas occur because people exchange a lot of information back and forth. The more of that you have, the better it is for society.

BROOKE GLADSTONE: Do you need a non-governmental place, like HavenCo, to accomplish a lot of what you say you want to accomplish?

SEAN HASTINGS: I, I would say it’s not absolutely necessary; that having the right kind of encrypted networks would allow people to exchange information without fear of being eavesdropped on by government or anybody else. However, having someplace where people are publicly saying this is right, and we’re doing it because it’s right, puts a lot of pressure on governments around the world to let their people be a bit freer.

BROOKE GLADSTONE: Sean, thank you very much.

SEAN HASTINGS: Thank you.

BROOKE GLADSTONE: Sean Hastings was the co-founder of HavenCo.

Here is a link to the original version in German:
http://www.zeit.de/2003/50/Cypherpunks

Here is an English Translation by Veronika Leluschko:

The pirates of the 21st century

Fighting against terror, police and secret services are establishing the surveillance state. But a group of computer geniuses is waging data war on authorities. A report from the world of encrypted messages.

By Thomas Fischermann

“The art of power is the art of disappearing.” — Paul Virilio

The computer in the ZEIT office just reported the reception of a town clerk’s e-mail. That man is an important informer for this story. One who has a certain reputation among the cryptographers, the inventor and user of electronic hiding and encrypting techniques. But that town clerk’s e-mail cannot simply be opened by clicking on it. It took a couple of minutes until the computer was accepted in the “Lasseiz Faire City”, an underground network, hiding deep underneath the surface of the internet, only to be entered with the right code words.

On first sight, the Lasseiz Faire City doesn’t look different from many other websites on the internet. One may send e-mails, post messages on a message board and visit chatrooms. But here, different form the usual internet, surfers can be assured of their anonymity. Nobody will intercept their messages. A series of techniques, some 25 years ago only available to secret services, encrypt electronic messages beyond recognition, let them dash around the globe as supposedly meaningless data dust, covering over all traces on their long journey.

The town clerk’s message starts with “aANQR1DBw04D/NSEz31qI+8QEADwytY”, that’s “Cyphertext”. A mathematically encrypted message, only to be read by its receiver. A few mouse clicks, a password, and finally something readable appears on the screen. “Thomas, let me think about those questions. I”l get back to you tomorrow.”

Welcome to the mysterious world of Cypherpunks! It was in May 1992, when Eric Hughes went to see his friend Tim May in Santa Cruz, California – and ended up staying there for three days, chatting away. That time, Hughes was in his late 20s and a gifted mathematician from UC Berkeley; May was 10 years older, a former physicist at the Intel chip company, having “retired” a couple of years ago thanks to a huge shareholder package. It was obvious that the two scientists got along together well: they shared a similar taste for Western gear and cool sunglasses, a fascination for computer techniques and more than a healthy amount of paranoia. Most of all, they shared political convictions.

Both regarded themselves associated with the libertarians, the supporters of an ultraliberal ideology, quite widely spread among the white American middle class. Libertarian Americans are facing the state in a particularly skeptical way, which concerns police as well as tax-collectors. Many of them would like to completely abolish states including their taxes and authorities and leave the power to the free market. That was the vigorous subject the two friends were discussing during their talk marathon that month of May. It wouldn’t be worth mentioning if the duo hadn’t been convinced of holding the key to their political dreams in their own hands.

In fall 1992, May and Hughes created a loose association of like-minded people which lead to one of the most unusual — and most obscure political movements of all times. They called themselves Cypherpunks, based on a science fiction style that had become popular around the end of the 19th century. They were a conglomeration of highly decorated scientists and dreamers, computer geniuses and political activists, lawyers and also criminals. They wanted to be rebels in cyberspace, those guys in sneakers and T-Shirts wanted to change the world, using their laptops as weapons. They would gather for fortuitous “physical meetings”, their Cypherpunk mailinglist would raise to one of the hottest internet debating places with almost 2000 subscribers. They wanted to be the technical elite, creating the infrastructure for a utopian, lawless cyberspace. And today, just 10 years later and after the terror attacks of 9/11, some of them see their hour come: as the last bastion against a society of surveillance.

In the early 90s, the internet economy as we know it today, was still in its infancy. But among the technicians’ avantgarde Hughes and May frequented, visions of a a digital future had already quite progressed: People on the American west coast were already discussing how electronic mail would replace all paper mailings in and between companies, that all money and shares transfers should be moved from classical banking to cyberspace, that products such as music, movies and news should, one day, only be delivered via data processing. More and more parts of our work and spare time would happen in front of a screen.
That time, a hand full of books and essays appeared, like “The sovereign individual”, describing someone who organizes his life and business in cyberspace, allowing no state to govern him. An organization called Laissez Faire City opened a provisional office in Costa Rica, wanting to offer some sort of virtual citizenship. Political terms like cyberanarchy and virtual regions managed to make their way into seminars of political sciences and law schools. Wasn’t it a children’s game to smuggle all those data, messages and products past governmental eavesdroppers and controllers, past all those police, tax-collectors and customs officials? Would such an unregulated, lawless cyberspace be able to force the hated states to their knees?

One might have thought about such ideologies what he wanted. Tim May once openly declared that cryptography would also be advantageous for murderers and terrorists, for racists, kidnappers and hijackers. That would be the inevitable and necessary evil side of the new freedom, he said. ‘Cypherpunks break the laws they don’t like”, the founders autocratically wrote in one of their pamphlets. But, one way or the other, it seemed to be technically feasible to the experts and even unavoidable.

In the 70s and 80s, methods for extreme data encryption had already slipped out of the hands of the secret services. Powerless, military and police could only watch how programmes like Pretty Good Privacy (PGP) were spread all over the world in the 90s, unable to be hacked with acceptable effort and expense – not even with the help of the secret services’ own supercomputers. “Cypherpunks will write programs”, so Eric Hughes’ battle cry which he wrote in a manifesto of the newly founded group. They would establish secret electronic mailboxes, found electronic banks and deal with electronic money, simply create a network of highly encrypted communication. “The change will not arise in a political but in a technical way” co-founder Tim May added.

“Governments in the industrial world, you tired giants made of flesh and steel”. This is how, a couple of years later, John Perry Barlow began his Declaration of Independence in Cyberspace. The rancher, former Grateful Dead songwriter and passionate fighter for civil rights had become an icon of the movement. “Where we gather, you have no sovereignty anymore.”

Lima, May 2003. Caryn Mladen had prepared her trip to Peru perfectly. Her luggage looked quite unusual for a Canadian tourist, though: laptops, adapters, computer software. A list with names of groups of the civil rights movement that have gotten in trouble with police or political opponents. “Peru has a history as a particularly well organized surveillance state”, says the 38-year-old lawyer from Toronto, telling about her 2.5 week long undercover trip. “Although it’s now a democratic country, many old forces are still working. Nobody knows if the old surveillance systems are still in use and who uses them.”

Ms Caryn is a computer expert with extensive knowledge of data protection. She has written books about computers and is the author of a news column. She has hitch-hiked through Africa and traveled Syria during the first Gulf War (“I felt safer there than in New York City”) and studied massage techniques from the Far East.

Recently, she says, “I just needed something new, a new challenge. Then, in December 2001, it just happened.” They were five like-minded people, all of them fascinated by data protection and encryption techniques. Three lawyers, a medical doctor and a computer specialist with contacts to the Cypherpunk scene. They called themselves Privaterra and wanted to do foreign (development-) aid in an unusual way. They would provide civil rights fighters in developing countries with modern instruments of encryption techniques – the weapons of the Crypto movement.

Meanwhile the group has been to several countries in South- and Central America, like-minded people in various African countries. “The needs are often very different,” says the activist, “many groups have such little technical knowledge, they first of all need things like a virus protection program.” Computers, e-mail and the internet have, for a long time, become an indispensable tool for human rights fighters all over the world – an indispensable tool in the search for political prisoners and for coordinating campaigns. The disadvantage is, though, that these organizations’ computers now host the addresses of activists, confidential mail and other body of evidence.

Ms Caryn and her friends have taught dozens of civil rights fighters how to encrypt such data, how to hide them on the hard disk or stock them in a safe place in the far cyberspace – just in case that a computer gets confiscated by the police or disappears in a “burglary”. They taught civil rights fighters how to protect themselves from being attacked by hostile hackers who often also work for secret services. They taught them how to encrypt messages and how to find their way into secret communication networks, cleverly installed underneath the surface of the internet by crypto activists, instead of sending a regular e-mail that can be read by everybody like a postcard.

“Who are the opponents we’re fighting against?” A question Ms Caryn has asked frequently. She didn’t always get an answer. Sometimes it’s governments, sometimes former governments’ loyal members who continue working underground. Privaterra is helped by amnesty international, Human Rights Watch and other human rights movements when choosing their “clients” to make sure that the instruments aren’t handed over to the wrong people.

About ten years after the Cypherpunks’ foundation meeting some of their political dreams have come closer to reality than ever before. Data encryption that no curious state official can hack anymore, in Peru or at the American snooping service NSA? Many such techniques are today available for everybody on the internet. Software forges like Martus Software or Hacktivismo have even written custom-made programs on the internet for political activists and civil rights movements. Nonetheless Caryn and her traveling data rebels had to make a painful recognition: The technology might work, but a much bigger problem is the application. “Those people are no computer experts, and we can’t make them computer experts” says Caryn. “But these groups cannot risk to make mistakes – their communication has to be 100% bugproof.”

“Most of the people we work with have extremely good reasons for privacy” she says. Death threats, unannounced raids in dawn, unexplained burglaries in the organizations’ offices. A Privaterra “client”, “somewhere in Central America”, was later found murdered. Only a couple of weeks ago, the Vietnamese activist Pham Hong Son was sentenced to 13 years in jail for “espionage” because he had exchanged e-mails with international democracy groups. “This is not an amusing adventure, most of all we have to be careful not to harm anybody”, says one of Caryn’s co-workers. A couple of years ago, when China built a wall around the entire Chinese internet and had police control all internet cafés in Peking, a team of Cypherpunks immediately wrote a program to break through the virtual wall. But after a short time of enthusiasm they withdraw it, because the use of the program left suspicious traces on the internet – which represented an even bigger source of trouble.

Las Vegas, August 2003. Once a year the walls of the Alexis Park Congress Center are covered with black cloth. Bouncers guard the doors, the police sends out special forces and allegedly even international secret services reconnoitre the terrain. A motley crowd of hackers invades the Nevada desert: it’s DefCon, the biggest convention for all those who know about penetrating others’ computer systems. Hordes of computer geeks populate the congress halls and the deck chairs around the swimming pool, pale guys in T-Shirts and enormous sandals, trendy hipsters with fantasy haircuts. Many of the guests still have quite pimpled faces. Computer kids.

The speaker entering the stage is in his late 30s. Wearing a suit and T-Shirt and a gray floppy hat he may not quite fit into the surrounding. Also his public is older and more serious looking than the huge amount of computer kids. In the middle row a few FBI agents have mingled with the public, expectantly folding their arms. No surprise considering the title of his speech: Punish the collaborators! is Bill Scannell’s subject. He is a veteran on these meetings: a confessed Cypherpunk, although not very knowledgeable in technology. The power-speaker and chain smoker Scannell has become famous as the mouthpiece of a bunch of cryptography companies – for example The Bunker, the company who bought an entire nuclear blast-proof bunker in the West of England and, since then, extols it as a particularly safe data storage place. Today he is playing his preferred role: the self-declared civil rights fighter and troublemaker. “We must prevent George Bush and John Ashcroft from making the US a society of observation and surveillance’ says Scannell. He quickly talks himself into a fury and receives mixed reactions – defiant applauding, a few outraged listeners are leaving the conference hall. “We must make life hell for those who want to take away the freedom of our constitution from us!”

Maybe it’s due to Bill Scannell’s personal history that he is so concerned about privacy and data protection. Scannell has worked as a spy in East-Berlin, then as a journalist in countries formerly belonging to the Eastern bloc. He claims having experienced “how things are going in totalitarian countries. I was always proud of the freedom an American enjoys in America.”

When, in February, the American airline Delta offered to test an extensive passenger surveillance system of the American government “I blew a fuse”, says Scannell. A few days later he started a protest-website, requesting boycott and attacking personally the Delta chief manager; he toured American talk shows and attended the Delta general meeting. The company ended up withdrawing its original plan. At the moment he is working on a similar website against the flight booking system Galileo. “These things don’t help at all to fight terrorism” Scannell says. “They are an instrument of prosecutors for all kind of goals.”

Scannell claims it a “fundamental right” to travel through the country without being detected. This has become more difficult since the terror attacks, but, when he has enough extra-time for his check-in, he quarrels with the security staff; he gets a kick out of buying a bus- or railway ticket under a false name (“Joe Cypherpunk”). “Recently I was at the airport, talking to my sister on the phone, about politics, and I spoke out clearly some personal points of view” he says. “Then I noticed everybody was staring at me as if I were a terrorist. That moment I realized that, in this country, we are beginning to be afraid to speak out freely what we think.”

The early Cypherpunks considered it a law of nature that the internet era will simply deprive the authorities of power, that, one day, they will just capitulate and be quiet. But two years after 9/11 the “tired giants of flesh and steel” are regaining their strength. Only a few weeks after the terror attacks Bush arranged for new laws. He even established an “Administration for Cyberspace Security”. Rumors could be heard that encryption techniques deriving from hacker and cypherpunk forges had helped bin Laden’s kamikaze pilots plan their attacks, that people like the Cypherpunks were even partially responsible for 9/11.
It is, of course, an old contentious issue in the debate about data protection if encryption techniques are in fact a civil right or only a support for terrorists, rascals and drug dealers, if they are a modern equivalent for a sealed envelope or a “product equivalent to weapons”, as the US government decided at times. Is there a perfect balance between freedom and security? The core around Tim May and Phil Zimmermann, the inventor of the encryption program PGP, stuck to it after 9/11: protection for criminals and terrorists is a necessary price to pay. Nobody could stop the movement anyway. And weren’t there enough legitimate applications for the new technology? Protection for “cypher dissidents” in China or Burma – and even in America, where, for example, some groups are planning to publish the names of “missing people” in Guantánamo Bay, fearing political repercussions, who knows whether they are right or wrong? “If cryptography is prohibited, then only the criminals have cryptography” Phil Zimmermann occasionally declared succinctly.

After 9/11 and the following hunt for more security, such remarks hardly found sympathizers. Many law keepers and security services sensed their chance to create facts. Step by step the rights of police and secret services to tap phone calls are extended, authorities connect their data banks, more and more they are given the right to access data banks of private companies – in America, in Europe and in other parts of the world. “Few people have understood that a surveillance like in Orwell’s Big Brother isn’t reduced to the world of books and movies anymore” says Barry Steinhart, the data protection expert of the civil rights movement Civil Liberties Union.

However, it was not the first shock of 9/11 burying the Cypherpunk founders’ mantra of the “inevitability” of unlimited privacy. It was the technical development itself. The explosive spreading of computer technology and internet in the industrial countries was followed by an explosion of spying programs, an explosion of surveillance cameras in streets and on airports, biometrical recognition techniques and loads more of other technologies. More and higher performing computer systems apparently became the snoopers’ advantage.

Never before companies, national authorities and obstinate internet researchers could find out so much about anyone – thanks to the internet that once should bring unlimited freedom, as Cypherpunks had been dreaming. “You have zero privacy anyway”, Scott McNealy, head of the Californian computer company Sun Microsystems said a couple of years ago. “Deal with it.”

New York City, October 2003. The head waiter lifted his eyebrows for a second as Jo, John and Sean entered his noble seafood restaurant in sneakers and casual outfit. The three people in their mid-thirties and with gawky Westcoast attitude look a bit different from the serious business people who usually have lunch here. But how can the waiter know that he is confronted with three future government leaders?

“Has the dream of an anonymous, stateless Cyberspace burst?” That’s the question Sean asks. Leaning back, he repeats the sentence, then takes a moment of reflection. Sean is clearly the man for the big answers, he’s the leader of the group. A stocky young guy with a fat, round face. “It’s all there, burglar-proof mathematical proceedings, anonymous e-mail-programs, anonymous websurfing, even anonymous exchange platforms. But one of the big problems is: Nobody uses these things! They are only reserved for a small elite.”

When Sean Hastings speaks about a small elite one thing is clear: he himself and his friends count among them. Hastings is a Cypherpunk. None of the sworn founding members, but a gifted young computer programmer with a rebel’s heart, who would just love to scare the hell out of the nation-states. “But, don’t write that I’m a Cypherpunk” he corrects immediately. “I don’t like to be put in a drawer. Just write that I sympathize pretty much with the Cypherpunks’ philosophy.”

Hastings has reached cult status. In the late 90s he found an old book called How to start your own country. A couple of months later he bought a number of computer servers and installed them on a rusty air defense station from WWII, a few miles from the East coast of England (in the middle of the North Sea), opening the “first public data paradise in the world”. Hastings claimed that these computers were not controlled by anybody. In 1967, the retired officer Paddy Roy Bates “conquered” and declared independent the deserted military station. Bates once expelled the Royal Navy with well-aimed shots across the bow. (here is a pun which cannot be translated. T.F. writes “Schüsse vor den Bug”, which literally means “shots against the bow”, but mainly “to severely offend someone”.)

Since then, Bates considers himself “Prince of Sealand” and, for a couple of years, Hastings was his official national entrepreneur. Hastings, his wife Jo and a hand full of seamen hackers squeezed themselves into windowless cabins, and they all were very discreet. The Prince kept his paws off the computers and Hastings told nobody who used his servers to stock data base and websites.

After all, Sealand was supposed to guarantee absolute data inviolability for the first time in history.

“Throughout many discussions we had agreed that an anonymous cyberspace needs a certain amount of physical safety,” says Hastings. It may be more and more difficult to hack encrypted messages, electronic “magic hats” may become more and more efficient. But somewhere in the world, on some computer, all these secret data must be stored and be fed into the internet. Somewhere out there the world’s mystery-mongers are sitting in front of their computers, knowing how to get to see their messages in plain text – discreet and secluded entrepreneurs from Kiev, tax evaders from the USA, secret online gamblers from Brussels, unfaithful guys from Vienna, dealers of illegal nude pictures from Bogotá and drug dealers from Lucerne. And everywhere unpleasant states can cut off lines, confiscate hard disks or sentence their owners to hand out keys. When a couple of years ago, during the Internet security fair RSA, a young blasé programmer was listing all the “ultrasafe” protection programs of his computer, one of the police representatives blew his top: “So what if I kick down your door and hold a gun to your head? Are your data still safe then?”

Even Sealand, says Hastings, couldn’t have made the Cypherpunks’ dreams safe and secure. “It only really works when we have computers all over the world and distribute encrypted data in little bits on all those systems.” That’s why he is already planning a new data paradise: a gigantic floating island in the international waters near Gibraltar. “Maybe we establish a completely new form of life down there” he dreams. He has created a website about “Life on the sea”. Details about the business plans are not yet available, but Hastings says he has already hired engineers and found financing sources. The young nation would also have “arms for self-defense” on board. “Water-to-air-rockets” she will employ, says his wife Jo and laughs. A joke? That’s not really clear.

“By the way, I’m not gonna move there” Jo adds, and Sean nods with a sour grin. Obviously this is not the first time the subject is discussed controversially at the Hastings’. “She’ll probably come to visit, Sean says.” Back in the Sealand cabins, the stateless guys had to shower with caught rain water for months, for security reasons they never could sleep on deck and the steady buzzing of the diesel generators made sleep almost impossible. “After Sealand I’ve got all I ever needed concerning life on weird marine constructions” says Jo.

How about crypto rebels who don’t live on far-away islands or rusty platforms in the ocean? What do they do? Several of his colleagues say that Tim May has withdrawn from public and now lives as a bearded hermit, owning an impressive arsenal of weapons — a statement May neither denies nor confirms. A well-known crypto-pioneer from the American East coast is said to do additional work for the Mafia, providing them with programs for highly encrypted and unforgeable betting systems. The Cypherpunk founding member Jim Bell from Vancouver even became the first official “crypto criminal” in 2001: A judge decided that Bell’s confused essay with the title “Assassination Politics” was tantamount to a call for attacks. Bell had developed an encrypted betting system with digital currency and guaranteed anonymity. Participants could guess the decease of certain tax officers in the Vancouver area; the one who came closest to the actual time of death won the jackpot.

“Many (Cypherpunks) aren’t even connected anymore to the libertarian ideology”, says an insider. “The only thing they have in common seems to be the conviction that data protection is a good thing.” Numerous Cypherpunks don’t even call themselves Cypherpunks anymore, also for the weird self-portrayal of some of the founders. Some of the rebels even seem rather bourgeois today.

There are a couple of companies offering programs and systems for anonymous websurfing and e-mailing, safe from being spied by authorities and employers and protected against the maniac data collecting as it is done by advertising companies. Those systems are developed with the crypto rebels’ technologies and sometimes operated by confessed Cypherpunks. They have names like Zero Knowledge, Hushmail, Anonymizer or ZipLip. A New Yorker company called iPrivacy even wanted to anonymize the trade of goods on the internet; the clients could have done their shopping on the internet without delivering their identity, with iPrivacy organizing the transactions and shipment anonymously. Not even the delivering companies would have known a client’s identity. But meanwhile iPrivacy has gotten bankrupt, many of such companies are having severe economic difficulties, due to the low demand for their supplies.

Due to that situation, a number of activists associated with the Cypherpunks have, during the last years, switched from programming to debating. “Many Cypherpunks have become missionaries, seeing themselves as educators, their task being the enlightenment of the public,” says a founding member.

Meanwhile there is a huge amount of academic projects, such as the OpenNet initiative at Harvard, Cambridge and the University of Toronto: they regularly produce a summary about internet censorship all over the world.

The Electronic Frontier Foundation (EFF), founded in 1990 by a hand full of encryption activists, is today a political think tank and one of the loudest voices when it comes to debating data protection in the USA. The group also employs lawyers to help hackers, data protectors and encryption artists – and forced American secret services to hand over encryption techniques or to take them off their list of “weapons” banned from export.

For most private users the data protection programs are still too expensive and too complicated. The company Anonymizer in San Diego asks $30 or more per year for “anonymous websurfing” — with the disadvantage that web pages take longer to load, in many situations a couple of extra clicks are necessary. Easy to use music exchange programs like Napster and Kazaa have enormous success, whereas complicated Cypherpunk alternatives like Moio Nation never really caught on. Is the data protectors’ cause rather a cultural than a technical task? “Most people still accept the internet the way it is” says John Perry Barlow, author of the above mentioned “Decleration of Independence in Cyberspace”. “We still don’t have the killer application” adds Lee Tien, a law expert at EFF.

Panama City, October 2003. Sandy Sandfort’s office is located in a white painted apartment building with rows of balconies. Sandy’s balcony can easily be made out from the sidewalk: the one with the gigantic satellite dish in front of the window. Sandy Sandfort is in sunny Panama City for work, not for vacation. “Verax Inc.” says the sign at his door. Inside the bare room a few desks, a couch, a number of computers, a buzzing fan. “We’re a post-venture-capital-business”, says the director of the company and laughs. A company that has got no starting capital except for the money Sandy raised on a private basis. If things go as planned, Sandy Sandfort expects to make history in his spartan office. A new payment system for online purchases is supposed to arise in Panama City. A kind of central bank with a new kind of electronic money, permitting superdiscreet, supersafe payments via internet. One of the oldest dreams of the Cypherpunk community is planned to become real – economic freedom on the internet.

Sandy Sandfort is today 57 years old. He has worked as a lawyer in Arizona and as an English teacher. In Costa Rica he was the star of a soap opera (“I was the bad guy”). He was also part of the first members of the Cypherpunk movement. Since last year he lives in Panama, and he had good reasons for moving there: The payment system he intends to create could never be run legally in the USA.
New payment systems for the internet – for activists of encryption techniques this has always been considered the royal discipline. Loads of web pages have been filled with concepts for a new currency, with the Internet-Dollar and eGold, with pre-paid internet currency to be bought at kiosks and elaborate money laundering methods. They were supposed to put an end to the control by tax offices and other authorities. Numerous elegant schemes for virtual exchange circles and digital cash have been developed for a long time, many of them are considered more elegant and better thought-out than Sandy’s Neuclear system. But: they never were of economic success.

Sandy sees his advantage in a different aspect: beside the payment system, his Verax Inc. includes its own “killer application”. Sandy Sandfort also knows quite well the gambling scene – not the traditional Roulette or Canasta in casinos, but cyber-gambling on the internet. For many years gambling websites have been part of the most important income sources in the digital economy, but they have one problem: in many countries they are illegal.

Many criminal prosecutor offices, among them those in the USA, search their citizens’ credit card billings for suspicious transactions with cyber casinos. No surprise that many gamblers all over the world are longing for an alternative.
“We want to become the new payment system on the internet”, says Sandy Sandfort, rocking back and forth on his rickety desk chair as if suddenly he couldn’t wait for things to happen. “A system people don’t have trouble with when purchasing gambling chips, weapons or whatever it may be.” Simply spoken: clients will transfer money to Verax, via bank, postal money order or even in cash. Verax grants them funds and, from this time on, they can start gambling in online casinos. In Panama there is no law prohibiting this procedure. Only Sandfort and his colleagues will know a gambler’s real identity; new crypto-technologies will make sure that the gambler’s anonymity is guaranteed and prevent from fraud.

But what happens if, one day, the American authorities forbid money transfers to Verax as they forbad transfers to casinos in the past? Sandy laughs. “That’s why we want to make sure as soon as possible that our payment system is accepted by as many online dealers as possible, also by hotels, travel agencies, maybe one day even by Amazon.com. Our system will make it impossible to retrace on what exactly a client spent his money. He always can deny having spent it on cyber gambling.”

Once the payment system is running, Sandfort perhaps wants to licence it for other providers. His programmer, Pelle, a 33-year-old Dane, has already developed plenty of ideas on the subject. “Neuclear works like very old exchange systems, but is operated with high-tech-methods”, he says. “Theoretically, you can create any kind of currency with this system. If you want to, create a cyber currency, based upon gold as security. Or, even better, on opium. I would laugh my head off if someone would try that”. A joke. Pelle is already working on a version of his banking program that isn’t placed on only one computer, but distributed on many, many single computers all over the world. Once that works, which banking laws could be applicable here after all? Is this the hour of birth of perfect digital financial oases in cyberspace? Parallel economic areas, where all trade and gambling business can be hidden for good?

“Well, you know, that’s the problem with all Cypherpunks,” says Sandy Sandfort. “They have this vision of totally disappearing in a parallel world. Most of the time the world doesn’t work that way.” Sandfort walks over to his desk and points at the ceiling: “Look, I could sit right here with the best and most secure software in the world — and then some spy or the police could have built a tiny little camera in the lamp, recording everything I write. Believe me, we will continue making progress, but you’ll never be completely invisible in cyberspace.”
© DIE ZEIT 12/04/2003 No.50