The modern market for cryptocurrency is believed by many to have started with the advent of Bitcoin: proposed by Satoshi Nakamoto in October 2008 and ultimately launched on January 3rd, 2009. Tens Of Thousands of Cryptos have followed since, referred to collectively as altcoins I.e. alternative coins- those which are an alternative to Bitcoin, the first cryptocurrency
Right?
Well, no. Bitcoin was not the first. It wasn't even the second. It was likely the 5th, but more on that later. BTC is the most successful and longest-surviving cryptocurrency, but its revolutionary features including the blockchain, pow of work mining, and anonymous transactions are all pulled from a pile of cryptographic ancestors that carved a path for BTC to succeed and ultimately achieved what they could not. In truth, the cryptocurrency world all started with ecash
Chapter 1: Ecash
In the late 1970s, David Chaum wrote a now widely referenced Thesis for his master's degree. “Communications of the ACM” was written by Chaum and in it, he proposed the first blockchain prototype. He is believed to have come up with the idea as he sat in a hot tub in the University of California Berkley and has mentioned this in previous interviews. It sounds crazy, but his college friend was Eric Schmit, who went on to found Google, so these were the circles Chaum was mixing in
Chaum was a big advocate for privacy and cryptography. A year after writing his thesis, he published a paper that proposed a protocol for digital payments that couldn't be forged or traced
On the back of this, Chaum Founded DigiCash in 1989 and Launched E-Cash, the world’s first cryptocurrency in 1990. He Executed the first ecash payment 4 years later, on stage, while giving a keynote speech in Geneva at the first-ever World Wide Web Conference. To give you context on how big of a deal this was, the only other Keynote speaker at the conference was Tim Berners Lee - The man who literally invented the internet
The future looked bright for cryptocurrency. Ecash was even adopted by Deutsche Bank & Credit Suisse Bank. At its peak, Ecash had 5000 individual users signed up and over 300 businesses registered on its platform
At one point, Chaum Was even Negotiating With Bill Gates to Integrate E-cash with Windows 95, but they failed to agree on a deal. Windows 95 was a groundbreaking step for the Personal computer market and is widely credited with bringing the first mass-use, user-friendly operating system to the world. Imagine where E-Cash would be today if this deal was agreed
Sadly, despite some adoption, there was little interest in the actual function of E-cash. Credit Suisse & Deutsche Bank never actually used the platform. The only bank to do so was Mark Twain Bank in St. Louis, Missouri. The service was free to use for buyers but had a transaction fee for sellers, which turned many off the idea.
Ultimately, DigiCash, The Parent company of E-cash, filed for Bankruptcy in 1998 as credit cards became the dominant payment form
Chaum himself said that "As the Web grew, the average level of sophistication of users dropped. It was hard to explain the importance of privacy to them."
Chapter 2: E-Gold, B Money & HashCash
After E-Cash folded, 3 other notable Cryptocurrencies sprung up that ultimately laid the foundation for Bitcoin
E-Gold
E-Gold Was Launched in 1996 by Dr. Douglas Jackson and Barry Downey. It Was Digital Cash Tied To Real Life Gold - Hard Money, some would say. Unfortunately, It Gained Traction For Money Laundering and was shut down.
B-money
In 1998 developer Wei Dai Proposed an "anonymous, distributed electronic cash system". B Money Had It all, including Mining, A Peer To Peer Network, and cryptographically secured anonymous transactions. B-Money Actually utilized 2 protocols to transact, but it ultimately remained a proposal and was never fully launched. However, it is believed by some that Satoshi referred to B Money elements in The Infamous Bitcoin Whitepaper, so its impact as an idea still stands today
Hashcash
Finally, The Cryptocurrency HashCash was created by Adam Back, the British-born Blockstream CEO & Early Bitcoin contributor in 1997. Initially, it was conceived to be resistant to the DDos or Distributed denial of services form of cyber attack and was the invention of the proof of work mining or hashing as it is still referred to today. Hashcash also implemented the distribution of new coins via mining that we see with Bitcoin. It gained popularity but ran into issues with the scaling and cost of mining
12 сен 2024
