Cypherpunks Write Code: Jim Bell & Assassination Politics

This is likely one of the most polemical issues we’ll find in the cypherpunk arena. Do you think murder is fine, under the right circumstances? At least we know that 54 countries think it’s a fair punishment for the most dangerous criminals. Jim Bell, a renowned crypto-anarchist, seems to think it’s justified against hated and corrupted political figures, and that’s how he came up with Assassination Politics (AP) —a would-be private assassination market.

But let’s talk a bit about James Dalton Bell first. He was born in 1958 in Akron, Ohio (US), and later attended the Massachusetts Institute of Technology (MIT), where he earned a degree in chemistry. After graduating, he worked as an electrical engineer at Intel before starting his own company, SemiDisk Systems, in 1982, which specialized in computer storage devices.

When the company closed in 1992, Bell developed a strong dislike for financial and tax issues —which would prove almost prophetical for him years later. Politically, he leaned toward anarcho-libertarian views and was involved with the Libertarian Party. His growing distrust of government led him to explore bold and controversial ideas, including the concept of a very unique prediction market.

Assassination Politics

This essay, published in 1996, outlines a controversial idea where people could anonymously contribute money to “predict” the death of specific government officials. It would function by leveraging encryption and digital cash to create a highly secure and anonymous prediction market. Participants would make predictions about the death of a listed target by submitting an encrypted guess, accompanied by a payment in digital cash.

The prediction would be encrypted twice: the outer layer containing the digital cash is decrypted by the organization or administrators behind the market, while the inner layer, holding the prediction details, remains secure and known only to the predictor. If the prediction comes true, the predictor submits the decryption key, proving the accuracy of their guess, and receives the reward through an encrypted and untraceable digital cash transaction. Then, they can “gift” this reward to anyone —including an assassin.

The entire process ensures that neither the organization nor any other party can trace the identity of the predictor or link it to the outcome, effectively safeguarding all parties involved from legal and investigative scrutiny. All of this was hypothetical, though. There wasn’t the proper technology for it back then.

With the advent of smart contracts and cryptocurrencies, such a system could theoretically be implemented more securely today. A smart contract could automatically pay out a reward to someone who successfully predicts a specific event, like the death of a targeted official. The smart contract would ensure that no one needs to know who the predictor is, as the entire process would be automated and anonymous.

A modern attempt to bring Bell’s idea to life was the Assassination Market, created by a pseudonymous figure known as Kuwabatake Sanjuro, but it wasn’t quite the same system, and not a prediction market at all. This platform allowed users to contribute bitcoins toward bounties on the heads of government officials. It’s unclear if it ever worked.

Politics of Destruction

The economics author Robert Murphy debated Bell’s proposal in his own essay, titled Politics of Destruction, published in 2002. Murphy argued that, despite its technological appeal, Assasination Politics is fundamentally flawed and impractical. His claims about administrators potentially pocketing funds or deceiving participants could be easily contented today with the existence of smart contracts and decentralized networks.

However, Murphy also emphasizes the potential societal dangers of AP. If implemented, the system could lead to widespread violence, as it doesn’t limit targets to oppressive politicians but could be used against anyone, including ordinary individuals. This would create a chaotic environment where assassination becomes commonplace, undermining core values of property rights and personal safety that are crucial for a stable society —even for crypto-anarchists.

In essence, Murphy contends that even if technical challenges were addressed, AP's ideological implications make it a perilous idea. He believes that its adoption could lead to the downfall of modern civilization and contradict the libertarian principles of a just and free society, as it would foster a world where violence and insecurity overshadow respect for individual rights.

Bell’s Legal Saga

As anyone could imagine, this essay put Bell on the radar of the authorities. Following an investigation by the US Internal Revenue Service (IRS) in 1997, Bell faced charges of tax evasion and misuse of Social Security numbers, leading to an 11-month prison sentence. After his release in 2000, Bell claimed widespread government corruption in his case, initiating a lawsuit in 2003, which triggered further legal complications. He was rearrested on charges of harassment and stalking of federal agents, resulting in a decade-long imprisonment.

Bell's subsequent lawsuits alleged severe procedural misconduct by federal authorities. He accused the government of orchestrating an assault by a fellow inmate to intimidate him and claimed that court records were falsified to obstruct justice. Bell also protested the legality of surveillance measures, alleging that the government planted a GPS tracker on his car without proper warrants (which was proven right in the trial), violating his constitutional rights. His defense contended that these actions were part of a broader scheme to undermine his legal and civil liberties.

Bell was eventually released in March 2012. All these issues haven’t stopped his AP activities however. In 2017, he announced the “Jim Bell Project” at the Paralelni Polis convention in Prague. He plans “to adopt a new [AP-like] system to completely eliminate all wars, all militaries, all taxes, and all government-sponsored violence,” with the help of worldwide volunteers and donors.

Prediction Markets

Assassination Politics was frequently discussed by cypherpunks, with mixed opinions. Trying to discern if this would be a good or a terrible idea could likely take a whole book, so we’ll leave it as food for thought. However, it’s important to note that prediction markets on decentralized platforms, like the one described by Bell, actually exist already. Even if the most common predictions don’t involve anyone’s death.

Prediction markets in crypto are like online betting pools where people place bets on the outcomes of future events using cryptocurrency. Imagine a marketplace where you can wager on (non-deadly) things like election candidates, football results, or price breakthroughs. Participants buy and sell shares or tokens linked to different outcomes, and the prices of these shares reflect the collective predictions of the market. The idea is that the wisdom of the crowd can provide accurate forecasts, while the platform provides rewards to its users.

Obyte, indeed, has its own decentralized prediction market based on bonding curves: Prophet. On this platform, participants are given options to bet on various event outcomes, such as Yes, No, or, for some events, Draw, each represented by a distinct token with an initial worth. These tokens can be traded, but their values fluctuate to reflect the changing probabilities as the event approaches and the market incorporates new information. In addition, users can also participate in liquidity mining.

Common bets on Prophet include price predictions and football games, and the whole process eliminates middlemen. Maybe it’s not quite like what Bell had in mind, but we can still bet privately for a whole world of possibilities.