When anyone hears the word ‘cryptocurrency’, Bitcoin is probably the next thing that comes to mind. But why? Bitcoin is the largest and most popular cryptocurrency. Some crypto enthusiasts colloquially referred to it as the grandmaster of digital currency. Bitcoin started out remotely in 2008 after being created by the anonymous Satoshi Nakamoto with the domain name bitcoin.org, but the first line of code was not written till January 2009. On May 22, 2010, Bitcoin recorded its first commercial transaction when Laszlo Hanceyecz purchased two pizzas for 10,000 bitcoins. Even though Bitcoin has been around for about 13 years, there are cryptocurrencies that existed up to decades before its inception, which you’ve probably never heard of; let’s take a look at some of them.
This was an anonymous payment system proposed in 1981 by an American cryptographer, David Chaum, which later went on to be a published article. Later in 1989, he created a fully functional digital currency based on the protocol he had earlier published, which he dubbed ‘DigiCash’.
This digital currency made public the idea of ‘blind signatures’, a concept that conceals the content of a message using a combination of both private and public passwords to confirm a transaction and also allows the modification of information transferred between individuals without traceability. Though DigiCash later went into bankruptcy in 1998, the concept is still in use today in the form of public keys.
Wei Dai, a developer, also made an entry into the crypto space with an article explaining the proposed anonymous electronic payment system of B-Money, 10 years after DigiCash made its way into the market. B-Money was based on the model of a decentralized network where members would work and get contracts executed automatically. Although an inferior model to blockchain technology, it still had a major role to play in the future crypto market. It is interesting to note that this project was never implemented.
It is a widely accepted belief among crypto enthusiasts that HashCash directly preceded Bitcoin. This currency was created by another cryptographer, Adam Beck in 1997. The proof-of-work protocol was used for the confirmation of transactions and also to reduce the rate of scam transactions. Despite the protocol in place, HashCash came crashing down due to lack of scalability resulting from network overload.
This currency, started in the late 1990s, shouldn’t be mistaken for the present-day gold-based coin with a similar name, BitcoinGold. It was created by cryptologist Nick Szabo, who originally devised the now popular proof-of-work protocol. This protocol is currently being used widely by a lot of modern cryptocurrencies, including the almighty bitcoin. The idea behind BitGold was to build a decentralized system capable of transaction confirmation without third party interference. BitGold later failed, but not without providing inspiration for several other cryptocurrencies after it.
Indeed, the digital currency world has seen interesting times before the inception of bitcoin. Which of these currencies have you heard about before now?