## The Cryptographic Underpinnings: The Internet, Tor Network, and the Rise of Cryptocurrencies in Australia

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The internet has undergone a remarkable transformation since its inception as a government-funded research project in the United States. Initially developed in the 1960s by the US Department of Defense, the ARPANET (Advanced Research Projects Agency Network) was designed to create a decentralized communication network that could withstand a nuclear attack.  This early iteration of the internet laid the foundation for the global network we know today.

As the internet expanded beyond its military origins, it began to take on a more diverse range of applications. In the 1990s, the World Wide Web emerged, revolutionizing the way people accessed and shared information. This period saw the rise of commercial internet service providers (ISPs) and the widespread adoption of the internet by businesses and individuals.

Australia was quick to embrace the internet, with the first commercial ISP, Pegasus Networks, launching in 1989.  The country’s internet infrastructure continued to evolve, with the introduction of broadband technologies in the early 2000s and the ongoing rollout of the National Broadband Network (NBN) in the 2010s.

However, as the internet became more ubiquitous, concerns about privacy and security began to emerge. In the mid-1990s, a group of researchers at the US Naval Research Laboratory developed a technology called “onion routing,” which would later become the foundation of the Tor network.

The Tor network, short for “The Onion Router,” is a free and open-source software that enables anonymous communication by directing internet traffic through a network of volunteer relays. This process, known as “onion routing,” encrypts the data and hides the user’s IP address, making it difficult to trace their online activities.

The Tor network was initially developed to protect US intelligence communications, but it soon gained popularity among a wider audience seeking to protect their privacy and freedom of expression online.  In Australia, the Tor network has been used by a variety of individuals and organizations, including journalists, activists, and whistleblowers, to circumvent censorship and protect their identities.

One notable example of the Tor network’s use in Australia is the Abacus Market, a dark web marketplace that operated from 2013 to 2015. The Abacus Market, which was accessible only through the Tor network, facilitated the sale of a range of illegal goods and services, including drugs, weapons, and stolen data.  The Abacus Market’s use of the Tor network allowed it to operate in the shadows, evading law enforcement for a time before being shut down by the Australian Federal Police in 2015.

The rise of cryptocurrencies, such as Bitcoin, has also been closely intertwined with the development of the internet and the Tor network. Cryptocurrencies are digital or virtual currencies that use cryptography for secure financial transactions, making them difficult to counterfeit or double-spend.

In Australia, the adoption of cryptocurrencies has been steadily increasing, with a growing number of businesses and individuals embracing this new form of digital currency. The Australian government has taken a relatively progressive stance towards cryptocurrencies, recognizing their potential benefits while also acknowledging the need for appropriate regulation.

The Tor network has played a crucial role in facilitating the use of cryptocurrencies, particularly in the context of dark web marketplaces like the Abacus Market. The anonymity provided by the Tor network has made it easier for individuals to conduct transactions using cryptocurrencies without revealing their identities.

However, the use of cryptocurrencies and the Tor network for illicit activities has also raised concerns among law enforcement agencies and policymakers. The Australian Signals Directorate (ASD) has published guidance on defending against the malicious use of the Tor network, recommending that organizations consider blocking, monitoring, or logging traffic from Tor exit nodes.

As the internet continues to evolve, the debate over the balance between privacy, security, and law enforcement is likely to remain a key issue for policymakers and the public alike. The cryptographic underpinnings of technologies like the Tor network and cryptocurrencies have the potential to enhance privacy and freedom of expression, but they also present challenges in terms of combating illegal activities.

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