Before Bitcoin - Standing on the Shoulders of Giants
Many folks new to the crypto world forget that technology is an iterative process. Before the blockchain, there was a broad world of digital cash both the idea of it, and a variety of implementations. Below, I'll try to highlight a few of the early technologies at a high level.
"If I have seen further, it is by standing on the shoulders of giants." -- Isaac Newton
ecash
Conceived in 1983 by David Chaum, ecash software on the user's local computer stored money in a digital format, cryptographically signed by a bank. The user could spend the digital money at any shop accepting eCash, without having to open an account with the vendor first, or transmitting credit card numbers. Security was ensured by public key digital signature schemes.
Hashcash
Hashcash was first proposed by C. Dwork and M. Naor in 1992, and then in 1997 by Adam Buck. It is a proof-of-work algorithm that initially was used to combat email spam. A hashcash stamp was added to email headers to prove the sender has expended a modest amount of CPU time calculating the stamp. Thus making it unlikely that they were a spammer. (Whitepaper)
B-money & Bit Gold
In 1998, Wei Dai wrote up the idea for an anonymous, distributed electronic cash system he called b-money. This was followed by Nick Szabo who created "Bit Gold". Bit Gold was an electronic currency system which required users to complete a proof of work function with solutions being cryptographically put together and published.
Reusable Proof of Work
""It seemed so obvious to me;" "Here we are faced with the problems of loss of privacy, creeping computerization, massive databases, more centralization - and Chaum offers a completely different direction to go in, one which puts power into the hands of individuals rather than governments and corporations. The computer can be used as a tool to liberate and protect people, rather than to control them."" — Finney in 1992
In 2004, Hal Finney complimented the earlier work by reusable proof of work. The idea of making proofs-of-work reusable for some practical purpose had been established in 1999. Finney's purpose for RPOW was as token money. Just as a gold coin's value is thought to be underpinned by the value of the raw gold needed to make it, the value of an RPOW token is guaranteed by the value of the real-world resources required to 'mint' a POW token.
Bitcoin
Finally, in 2008, the bitcoin whitepaper was published by the person, or persons, known as Satoshi Nakamoto, and well, the rest, as they say, is history. The Bitcoin system is peer-to-peer. Transactions are decentralized, and transactions are verified by network nodes. They are recorded in a public distributed ledger called a blockchain. This provided the first decentralized digital currency.
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Fascinating! I had read about the history of payments and how we went from barter to metal coins to IOUs to cash to checks to credit cards to epay... but I had never head this story. Thanks for sharing! Super cool!
Yea, found someone talking about hashcash somewhere on steemit. Found out that I didn't know anything about hashcash, so I decided to do a little digging. Figured I'd share what the rabbit hole uncovered.
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