This Week in Crypto

Crypto things you didn’t know you didn’t know.

There was life in crypto before Bitcoin.

The concept of a peer-to-peer digital currency that could not be tracked was created back in 1983 by David Chaum, an American IT expert. The same year he published his theory about cryptographic digital cash in a scientific journal and by the end of 1989, he founded the company Digicash.

Chaum created Digicash hoping that enough people would support the idea, thus convincing sellers to accept the new payment method. Unlike today’s cryptocurrencies, the concept was that users would buy the digital currency from Chaum’s bank operating as a central entity. The bank would have information that funds were acquired, but no information on how they were used. The coin was created to ensure online transaction safety. This was made possible thanks to blind signatures to ensure that the transactions were anonymous.

Digicash didn’t do too well. By 1996 the company filed for bankruptcy. At that time, few other digital currencies were launched. Ecash, e-gold and b-money did comparatively better than their predecessor.

Later, the boom in e-commerce catalyzed the development of digital cash and payment methods, making it popular despite Chaum’s failure with Digicash. Digital money was around long before BTC, and Satoshi Nakamoto even referenced some previous projects in the Bitcoin whitepaper.