The “forerunner of bitcoin” to the perishing

Reprinted from 100, author: Wu bit community

The first mention of digital currency, many people first reaction is bitcoin. In fact, only the first bitcoin digital currency based on the blockchain, before it appeared, people have invented the “digital currency”.

The concept of advanced technology, make big coffee Silicon Valley envy, Peter Gates, Bank of Holland, Citibank is a cooperation invitation, but at the end of this digital currency but accidentally went extinct, the empty position for later bitcoin.

David Chaum was born in a middle-class family, 28 years old got computer doctorate from the University of California Berkeley, he is full of wit is a mathematician, everything especially assertive person. In 1980, he traveled around the world, chose to stay in Amsterdam as a director of the Institute of cryptography.

In 1983, he published a paper, first mentioned the concept of “digital currency”. The difference in the paper he described to digital currency payment and credit card payment is anonymous, users from the bank receives the digital currency, but later spend the money of the state is anonymous, that is to say, the banks only know who exchange how much money, but do not know the use of some money.

At that time, “blockchain” has not yet appeared, then he is to make a block without chain of encryption currency?

The new technology of David to create a “blind signature” use of cryptography technology to achieve the requirements of anonymous electronic payment network. “What is the blind signature? Here with a vote of examples to explain:

As many people know, can be by mail ballot vote, in this case, the election authorities must confirm is have the right to vote, and only one shot. At the same time, the authorities should not know the people who voted for.

(Mexico a mailing voting card)

The first step, voters fill out the voting card, put it in a paper envelope, sealed, written on the envelope is sent to the mail address.

The second step, the election authorities received the envelope, not open, check in the roster of the voters have the right to vote, after confirming the election authorities on the envelope signature illustrate this point, at the same time, his signature sign inside the envelope through copying paper voting card. Then the authorities according to the envelope address the letter sent back wholly intact.

The third step, voters received envelopes, took out a marked voting card, write the voting information, another envelope sent no personal information.

Finally, only the signature and vote content election authorities look at the voting card, but do not know who is cast.

As a result, the envelope is “blind” and “signature” is written on the envelope. This is where the “blind signature” meaning: “the signer does not know the specific content of the news he signed, and signed messages can not be tracked.”

The digital currency created in the David, with a bank instead of the electoral authorities, with the money instead of voting card. The purchase of digital money from the bank, the bank to confirm. Then the money is converted into a corresponding number of digital currency, in the above “envelope”. Then, the user can use the digital currency in life. The banks in this process, from its signature know this is a real digital currency, but do not know who is using it. This makes the digital currency is anonymous.

David invented the “thought of blind signature”,, why don’t you apply for a patent to make money? So in 1989 he founded the company, and the invention of digital currency DigiCash, different with the traditional credit card, the goal of DigiCash is to make the Internet payment for goods and services has become a safe and convenient.

This concept is very advanced at the time, DigiCash have to wait at least a decade can play a role. Its application is completely dependent on the electronic commerce, the online trading market is in the period of the second half of 90s of last century began to appear. So, when DigiCash have not fared well. An article in the “Forbes” once said:

“One of the future useful instead of useful things now are just Arabian Nights, no one would want to use it. Electronic commerce is booming, but the fact that MasterCard and Visa is the first choice for customers.”

DigiCash during this period, almost with other emerging technologies are facing the same problem: they cannot solve the real problem for users. The advantage of DigiCash is anonymous, but customers just want to easily shop on the Internet, and they have been accustomed to using credit cards.

Unfortunately, David not only because of “new invention” too early, but also with his character. Holland magazine has issued a document that: David is a good cryptographer, but all cryptographers including him are paranoid. His company is more like a mental hospital, rather than a technology company.

At that time, Holland International Bank talked to David months of the agreement, the two sides signed the contract at the end of the day, David refused to sign. Before 1996 has served as DigiCash’s chief financial officer Raymond said:

“He is too suspicious, always feel right. The International Bank of Holland has eight people, they are CEO, David is not to sign up.”

Bill Gates had hoped to integrate DigiCash into each install Windows 95 system, and a $100 million price, but David felt too little money, he was back with the same reason refused at the best browser Netscape operators signed agreement.

Bill Gates (right) is a fan of DigiCash

David this arrogant, unrealistic style caused dissatisfaction with the company, leadership demanded he resigned from the post of CEO. He panicked, had to take the seat temporarily to one of the managers. Soon after, the leadership also began to do the infighting, numerous employees left the company disappointed.

The company is a mess, many investment institutions still feel that they are very attractive. However, along with the electronic commerce development in the global scope, and did not appear a large number of customers to use DigiCash. Although the credit card is not the most secure, but no one really show that this digital currency is more secure. Until 1999, DigiCash declared bankruptcy.

On the one hand, we can see that DigiCash’s failure is due to David’s voice is too heavy, and he is paranoid, stubborn, wrong judgment let DigiCash be buried, lost forever “become bitcoin” opportunities.

On the other hand, the failure of DigiCash also exposed the future project to eradicate the weakness of David is copyright and patent enthusiasts, but this approach is not conducive to the promotion and development of technology. This is also a lot of bitcoin enthusiasts and not love reasons cypherpunks block chain patent.

After eight years of bitcoin “taking history as a mirror, the open source code, so this technology will be provided free of charge to the whole world, and the drawbacks of this decentralized organization also circumvented the center of the company. Although a large number of copycat money to let the market competition becomes more intense, but they also let more people interested in this technology, let more people know about bitcoin, small and large homes this way is the wisdom of the Cong.

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