David Chaum Invents Digital Cash in 1982
David Lee Chaum is an American computer scientist and cryptographer. In 1982 he did research about "Computer Systems Established, Maintained, and Trusted by Mutually Suspicious Groups" and to prevent double spending, this is the first known proposal for a blockchain protocol. He is widely recognized as the inventor of digital cash and developed e-cash. He is known as a pioneer in cryptography and Privacy-Preserving Technology (PPT). PTT in data mining is an important concept: when the data is transferred or communicated between different parties, then it is compulsory to provide security to that data so that other parties do not know what data is communicated between original parties.
Chaum invented the blind signature which is a form of a digital signature which content of a message is disguised (blinded) before it is signed. The blinded technique in cryptographics provides a service to a client in an encoded form without knowing either the real input or real output. Blind signatures are typically employed in privacy-related protocols where the signer and message author are different parties. Allowing the central server to perform double-spending still leaves the system vulnerable to failure, since each signer can fail.
Satoshi Nakamoto released the first widely used implementation of peer-to-peer trustless electronic cash in January 2009. This replaced the central server's signature with a consensus mechanism based on proof-of-work (POW). POW is the original consensus algorithm in a Blockchain network. This algorithm in the Blockchain confirms transactions and produces new blocks to the chain. With Proof-of-Work the miners compete against each other to complete transactions of the network and get rewarded by frees for example in Bitcoins. By linking blocks together Bitcoin tracks its payments each with a block-header with the use of cryptography which well-defined the ordering of transactions.