Skip to content

The history of digital money, the path that led to the creation of Bitcoin

July 12, 2020

We can trace the origins of digital money back to the dawn of the general computing era. M.More specifically, 1982, when cryptographer and cypherpunk David Chaum introduced his work on blind signatures. In this document, David Chaum spoke about the possibility of using asymmetric cryptography to create a digital monetary system that is secure, private, anonymous, and global. It was the first time that there was talk of a digital currency, which is why Chaum has been the inventor of it ever since.

Chaum’s ideas also led to concepts such as double spending and distributed or decentralized digital payment networks. All concepts well ahead of their time, which Chaum examined; and described. As Chaum one of the biggest promoters of crypto mailing lists and BBSs on crypto, it didn’t take long! Much of it, his ideas achieved in various specialist areas on this topic.

Chaum’s research, the development of cryptography and the emergence of the Internet led Chaum to find that in 1990 nbsp; It will found the DigiCash company. And after a long four years of development, we introduced his idea of ​​digital money, e-cash. I was also born The world’s first digital currency with cryptography, which made it very secure, private and “anonymous”. Although this was the case with no absolute guarantees, since e-Cash worked with a distributed model and one of its pillars was centralized.

The history of digital money, the path that led to the creation of Bitcoin
The history of digital money, the path that led to the creation of Bitcoin

Related: Cryptocurrencies: what are and how digital money works

The explosion of Dotcom and centralized digital money

Later, in 1996, another opponent appeared on the stage, e gold. This was a centralized private digital currency developed by the Gold amp; Silver Reserve Inc. (GRR) under the name e-gold Ltd. The operation of this digital currency allowed users to open an account where they could have money in grams of gold (or other precious metals) and to carry out immediate transfers of value (“expenses”) to other accounts. made of e-gold.

Dr. e Douglas Jackson, a well-known oncologist, and lawyer Barry Downey. The couple originally endorsed gold coin service accounts stored in a bank safe in Melbourne, Florida. Until 1998, G SR (the system operator) was a linked member of NACHA and a full member of The Internet Council of NACHA.

E-gold quickly became the preferred payment method to be used online, leaving behind e-cash that will be forgotten later. The rapid introduction of e-Gold was due to the fact that it was easy to use and implement on the websites at that time. Nbsp; With an advantage over PayPal, which would only be born in 2000, e-Gold only had an open market for its system. The benefit was accentuated even more when e-Gold became the first digital payment system to support wireless mobile payments.

The spread of e-gold also brought about the first digital currency exchanges or exchanges, lKnown “InExchange” and “OutExchange”. It was dot com’s golden years and e-Gold took advantage of its growth.

In 2000, e-gold Ltd is founded, a newly founded offshore company that was founded for this specific purpose. G SR itself, now an E-Gold customer, continued to offer exchange services under the new OmniPay brand. At that time, websites like eBay, EFF, and Mozilla accepted e-gold payments. E-Gold’s growth peaked in 2006 when it was billed for nearly $ 2 billion in transactions. But in 2007 The U.S. government has started investigations into money laundering and this led to the company closing all of its operations eventually in 2015.

The arrival of PayPal and other competitors

PayPal arrived in 1998 by Max Levchin, Peter Thiel, Luke Nosek and Ken Howery under the name Coinfinity. But in 2000 Elon Musk ó their digital bank X.com, and in 2001 they changed the name to PayPal. L.The introduction of PayPal was quick, the system was much more user-friendly and easier to use, and the ease of processing the usage as well as the legal and security aspects spoke in favor of the introduction. PayPal, like e-gold and other digital currencies, was a centralized solution.

But so how was I born? PayPal later other platforms were born, such as Payeer, Neteller, Skrill or Alipay. Every single one of them centralized, without privacy and without anonymity. All of these currencies are part of the same messy system of fiat currencies and dependence on traditional banks and financial companies. In the end, everyone has the same structural problem of relying on masses of money that are imprinted in the dark and devalue our purchasing power in the long run.

This was clearly evident in the 2008 crisis, and from these facts would emerge a new form of digital money, cryptocurrencies.

Related: Money takes on a new meaning and goes digital: iquest; qu é Does bitcoin have anything to say?