Crypto Pioneers - part one
I’ve always been told, there are rules, that you’ve never should ask about: never ask a woman about her age, a man about his salary, and … let me think… a crypto trader how much has he lost.
Fortunately, considering Bitcoin and other cryptos, we can try to find how old they are and how its all began.
Well it seems that cryptos are older than most of us thought they are, as far as I manager to find out,its began in early 80’s of XXth century.
One of the most important persons in digital currency is a man called David Lee Chaum.
This American computer scientist, cryptographer, and inventor is known as a pioneer in cryptography and privacy-preserving technologies. His scientific thesis "Computer Systems Established, Maintained, and Trusted by Mutually Suspicious Groups" (1982) are the first known proposals for a blockchain protocol.
David can be easily considered as a cryptocurrencies Godfather as well. He is known for developing an electronic cash application that aims to preserve a user's anonymity, and inventing many cryptographic protocols like the blind signature, mix networks and the Dining cryptographers protocol. His 1981 paper, "Untraceable Electronic Mail, Return Addresses, and Digital Pseudonyms", laid the groundwork for the field of anonymous communications research…and in 1995 his company (DigiCash) created:
eCash (established in 1983)— a form of electronic cash. Its conception was based on a token currency that could be transferred between individuals safely and privately, due to the similarities of modern-day cryptocurrencies, it can be considered as crytpos’ prototype.
Chaum developed a so-called "blinding formula" to be used to encrypt information passed between individuals. "Blinded Cash" could be safely transferred between individuals, bearing a signature of authenticity and the ability to be modified without traceability.
It's common to find internet references to an attempt in the Netherlands to create crypto in the 1990s; however, this was apparently a smart card preloaded with digital money rather than a cryptographically designed currency.
Fortunatelly dr Chaum is still very keen on cryptography and blockchain issues, and at his web page we can find many information abour quite intresting projects.
The idea of anonymous digital cash have found quite bunch of followers, more or less successfull, such E-Gold in 1996 ( by dr Douglas Jackson and Barry Downey),Bit Gold (by Nick Szabo),or B-money.
E-Gold was a private digital currency that facilitated the transfer of gold between members of their website instantly, and similiar to modern cryptocurrencies the transactions were completely irreversible…
And, unfortunatelly, like in many current cases, E-Gold became a tool for money launderers and others seeking anonymity in their illegal activities.
In spite of company’s CEO statement: “E-gold operates legally and does not condone persons attempting to use e-gold for criminal activity. E-gold has a long history of cooperation with law enforcement agencies in the US and worldwide, providing data and investigative assistance in response to lawful requests.” , the U.S. authorities began an investigation against the company.
As a result of an investigation, the court stated that: “a business can clearly engage in money transmitting without limiting its transactions to cash or currency and would commit a crime if it did so without being licensed” and ruled against e-gold. Whats more the inventors of e-gold were found guilty on similar charges including conspiracy and money laundering.
Due to this consequences, nowdays, although e-gold still technically remains in business, but its no longer accepting new accounts or transfers of e-gold from user to user.
Other examples of early cryptos prototypes and their creators (wchich are also very intresting) I will describe in next article.
It seems that cryptocurrencies has started much earlier than we fought and nowdays they become more popular and usefull.
Have a good day!
Resources:
https://cs.stanford.edu/people/eroberts/cs201/projects/2010-11/Bitcoins/e-gold.html
https://chaum.com/
https://bithub.pl/artykuly/david-chaum-cyberpunkowy-sen-o-nieograniczonych-mozliwosciach/
