Which came first: the chicken or the egg? – this old dilemma is famous. But if we ask, “which came first: the Bitcoin or the cryptocurrency” – that one seems to be no dilemma for most people at all. Of course, Bitcoin was the first cryptocurrency, and so, the two things came together first (January the 3rd, 1999) – most of them would say.
Never implemented
Right? Maybe. Wrong? Maybe. Only some sentences to explain my point of view:
In 1998, Szabo designed a mechanism for a decentralized digital currency he called “bit gold”. Bit gold was never implemented, but has been called “a direct precursor to the Bitcoin architecture”. Wikipedia
DigiCash Inc. was an electronic money corporation founded by David Chaum in 1989. DigiCash transactions were unique in that they were anonymous due to a number of cryptographic protocols developed by its founder. Wikipedia
Origins of digital currencies date back to the 1990s Dot-com bubble. One of the first was E-gold, founded in 1996 and backed by gold. Another known digital currency service was Liberty Reserve, founded in 2006; it lets users convert dollars or euros to Liberty Reserve Dollars or Euros, and exchange them Wikipedia
What is what?
Of course, the question is: how do we define cryptocurrencies? Did this old ancestors have the characteristics which are making the difference for crypto-users and fans? Another quote from the good old Wikipedia, which is not always the most precise source of the world, but at least, mostly comprehensible:
A cryptocurrency is a digital asset designed to work as a medium of exchange that uses strong cryptography to secure financial transactions, control the creation of additional units, and verify the transfer of assets. Cryptocurrencies use decentralized control as opposed to centralized digital currency and central banking systems. The decentralized control of each cryptocurrency works through distributed ledger technology, typically a blockchain, that serves as a public financial transaction database.
Theory and practice
The problem is: Some main cryptos on the popular rankings aren’t using blockchain (for example, IOTA) at all. Others, aren’t really decentralized. (XRP by Ripple, allegedly. But also some DPoS systems or cryptos with a big pre-mined supply are suspicious.) So, the definitions are also difficult to implement in the practice.
And, shall we call cryptocurrency something which “was never implemented” (Bit gold), or only the real life working products?
Brilliant, but not alone
Bitcoin is great, Bitcoin us unique, Bitcoin is revolutionary. But Satoshi Nakamoto, or whoever he is, didn’t start the invention from scratch, did not build the Bitcoin from thin air, but based on the work of several other scientists, programmers. It was not simply an individual action of a genius, a miracle child, but rather a new stage of a long process. But Bitcoin still remains brilliant. At least I think so on the basis of what I read.
The Bitcoin white paper also admits the precursors and cites them, Investopedia mentioned other ones:
There are precursors to Bitcoin: Adam Back’s Hashcash, invented in 1997, and subsequently Wei Dai’s b-money, Nick Szabo’s bit gold and Hal Finney’s Reusable Proof of Work. The Bitcoin white paper itself cites Hashcash and b-money, as well as various other works spanning several research fields.
So far, so good. The details could be more interesting for cryptographers, programmers and scientists. Bitcoin can be the first cryptocurrency, but other projects did have similar advances before. Sometimes the new combination of old parts creates a revolutionary new, advanced phenomenon or object.
(Photo: own work.)