In a former cream factory in North Melbourne around 60 people nestled into beanbags, switched on their laptops and learned how to become anonymous.

The group gathered on Saturday night to take part in Melbourne's first Cryptoparty — a movement that started in this city with a tweet last month and has since spread to Egypt, Germany, the UK and the US.

The large space was dark except for a big screen at the front and the glow of dozens of computers perched upon people's knees.

Students, activists, mums and dads and computer developers helped themselves to soft drink, beers and lollies while a series of speakers taught people how to encrypt their online activity.

Well-known Melbourne Twitter identity Asher Wolf, who describes herself as an information activist, coined the term Cryptoparty on August 22, the day the controversial Cybercrime Legislation Amendment Bill passed the Senate.

"I wanted a party with crypto and laptops and music and beer," she said. "A party where people learnt how to protect their right to privacy."

Many people at the party, including Ms Wolf, were concerned about a proposal being considered by the federal government that would force telcos to store the data of all Australians' internet activity for two years.

"Around the world there has been an increasing trend to surveil people through the internet, one of the most popular ways of communication" Ms Wolf said.

"People have made moves to regain their privacy by using legal tools that are available to them. Any attempts to enforce surveillance are seen as a chilling effect on free communication and a direct attack on democracy."

Partygoers were taught how to use Tor, a free downloadable browser which masks an internet user's location and prevents anyone else from seeing their web browsing habits.

They were also shown how to encrypt their emails with public key cryptography, with presenter Ben McGinnes saying "the sun would burn out before one key was cracked".

Tech-savvy members of the audience debated which search engine was the safest and a woman with long blonde hair jokingly placed a tin foil hat on her computer.

The crowd was played messages of support from the founder of file-sharing website Pirate Bay, American whistleblower Thomas Drake and hacktivist group Anonymous, whose masked representative told the audience in a distorted voice, “crypto is not just for people in masks, it's for you".

One 25-year-old Melbourne University employee said she heard about the event on Twitter and came along because she wanted to learn how protect her computer. "I don't know much about it," she admitted.

Another attendee, who described himself as a WikiLeaks supporter said he feared being tracked as a result of his activist work.

According to the Cryptoparty website, more than 10 parties have already taken place in locations such as Vancouver, Cairo and Berlin and another 30 are scheduled to occur in the next few weeks.

The Melbourne Cryptoparty took place at Electron Workshop, a large co-working space that was once part of the Bulla Cream factory, that is used by start-ups and digital creatives.

Workshop co-founder Nick Jaffe, who also runs two web-hosting businesses, said he was deeply concerned about any government moves to retain data. He said if the proposals became law he would have to log the information on his customers.

"Not only is it something I wouldn't particularly want to do to our customers, it's also incredibly difficult to do."

The Age has launched a series on privacy and wants to hear from you.

Email privacy@theage.com.au, visit The Privacy Question Facebook page, use Twitter hashtag #ageprivacy or tweet us @privacyquestion