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A Wizard whispers in your ear: "The password of Sheffield Library Packet Switching Service is ABC1234XYZ."

That would be a conversation thirty years ago, on the Multi-User Dungeon, or MUD.

The Dungeon was actually a minicomputer at the University of Essex. I won't tell you the name of the wizard, because he's a big noise in the computer business these days, and not a hacker at all, dearie me no. But this isn't the story of MUD and hackers (we can tell that tale another day). Rather, it's the tale of how University of Essex came to run a minicomputer.

We have to go back to the early 1970s, and the three-day week in Britain, when there was a crash almost as big as the credit crunch today, and not enough electricity to keep every part of the country warm.

In the Seventies crash, what you wanted was to live near either a computer, or a hospital. If, for example, you lived near Imperial College Computer Centre in South Kensington, there were no power cuts for you. Same if you were near a hospital. Otherwise, power cuts were the order of the three-day week.

But it had to be a real computer, and increasingly, they weren't. Instead, something called a "minicomputer" was quite likely to be installed in the company data centre. When the power went off, so did it, because it wasn't important. At least, not in the early 70s.

By the 80s, those minis had started to become the backbone of the equivalent of the internet for those days, and hacking into them was the hobby of an awful lot of today's captains of industry, who were spotty oiks in those days.

The mystery of why they weren't computers is one of the weirder stories of those days.

One of the biggest, most successful minicomputer companies was Digital Equipment Corporation, or DEC. It didn't make computers. The PDP-1 was a "Programmable Data Processor" and DEC was not the Digital Computer Company, because the founders wanted money.

Computers were a dodgy business, for everybody except the one real computer company. All the other seven wannabes didn't count. IBM was the giant - it was known as Snow White, and companies like Univac, Burroughs, NCR, Control Data Corporation, General Electric, RCA and Honeywell made up the dwarfs.

If that sounds unlikely, you might like to remind yourself that even in the early 1980s, almost nobody knew what a computer actually was. A few who did, still doubted they were either necessary, or good for the world. And so total was IBM's control of the market that asking for capital to start a computer company would simply make your backers run away. Fast.

So DEC didn't call its products computers. They were data processing devices and those were, obviously, different. And what they were not was personal. Affordable, but only for reasonably expensive values of "affordable" – only companies could buy even the cheapest Philips Electrological Visible Record Computer or VRC. (It had all the power of a pocket programmable calculator. Something with that little program capacity today would not be able to function as a mobile phone.)

Talk to 70s hackers today and they'll go misty-eyed about a family of machines from Prime (all forgotten today). They were linked together in a global network which hosted the knowledge index (or dialog) and they were wide, wide open. And why not? The only way to get access to any computer required two things: a modem, and know-how.

Nobody knew what a modem was, and it was almost impossible to buy one. I didn't get my first until 1979. I was actually accused of breaking the law when I connected it to the phone line. And at 300 bits per second, and no error correction, reading the online manual of Prime computers was a challenge.

Finding out the password, of course, wasn't any sort of challenge. They never ever set the password to anything. I don't mean "anything other than default" – I mean they didn't actually have a password.

What changed all this had its roots in the early austerity years of the 70s - the high cost of computing.

The biggest computer companies in the UK were not the manufacturers, but the bureaux. They bought the biggest iron they could afford, and installed giant mainframes (with roughly the power of a modern iPhone) in big, cyber-scifi offices. You took your program around to them and they put the cards into the hopper, and some hours later, gave you a stack of printout… the company payroll!

But it wasn't an efficient use of DP capacity.

Just how inefficient that was can be judged by the amount of processor power that went into charging the clients. One giant bureau chief told me in the mid 70s that probably 95 per cent of the processor was used on billing algorithms, so the incentive for a medium sized company to buy its own minicomputer and use it entirely for doing real work was great, and Digital Equipment flourished.

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