What Came Before Bitcoin?
The history of cryptocurrencies can be defined through the innovations found before the launch of Bitcoin in 2009 and the rapid, fascinating, tumultuous history that has unfolded since.
Whilst Satoshi Nakamoto’s seminal 2008 paper Bitcoin: A Peer-to-Peer Electronic Cash System is seen by many casual followers to be the birth of crypto itself, the concept of digital money goes back much further, and even the core principle of Bitcoin can be traced back decades.
The first conceived digital cash system was first devised in 1983 with a paper called “Blind Signatures for Untraceable Payments”.
With the rise of credit cards and other forms of electronic banking in the 1980s, people were concerned about potential privacy issues associated with a single entity knowing about every single purchase’s nature, location and time.
Much like latter debates surrounding metadata, there were fears that this information could be misused, so a blind signature system was proposed which forms the basis for unlinkable digital payments.
Mr Chaum tried to launch a cryptocurrency based on this concept, known as “ecash” in 1989, but due to limited understanding of online security at the time, only signed up 5,000 customers and went bankrupt in 1998.
The other part of crypto, the idea of “mining” by solving computational puzzles for money, came about in 1992 thanks to Cynthia Dwork and Moni Naor, but would only be implemented in 1997 via Adam Back’s hashcash, still used to this day in bitcoin’s mining algorithm.
These two ideas were first put together in 1998 via Wei Dai’s “b-money” and Nick Szabo’s “bit gold”, although neither would be implemented, and bitcoin in 2009 would be the first decentralised cryptocurrency to exist.
As well as this, bitcoin was the first cryptocurrency to have physical crypto coins minted, which were physical coins with a private key printed on the back in a hologram which was then destroyed, accessed and spent.