Nowadays Bitcoin is the most prominent and valued virtual currency in the sense that it can be exchanged in both ways with traditional money. But besides being the most famous, it is far from being the first one.
The first attempts to create electronic money were made by Digicash with the brand name e-cash, DigiCash was conceived in 1982 by David Chaum. In his article “BLIND SIGNATURES FOR UNTRACEABLE PAYMENTS” of the department of computer science in the University of California he describes these early challenges of electronic money as the following:
“Automation of the way we pay for goods and services is already underway, as can be seen by the variety and growth of electronic banking services available to consumers. The ultimate structure of the new electronic payments system may have a substantial impact on personal privacy as well as on the nature and extent of Criminal use of payments. Ideally a new payments system should address both of these seemingly conflicting sets of concerns.”(Chaum, D., 1982)
The problems he wanted to solve were lack of proof of payment, theft of payments, media, and black payments for bribes, tax evasion, and black markets.
For this David Chaum proposed a currency that had the following characteristics:
- “Inability of third parties to determine payee, time or amount of payments made by an individual.”
- “Ability of individuals to provide proof of payment, or to determine the identity of the payee under exceptional circumstances.”
- “Ability to stop use of payments media reported stolen.” (Chaum, D., 1982)
Later in 1990 David Chaum founded Digicash and created the e-cash, his technique selling this e-cash to banks only one implemented USA a few others around the world and the DigiCash went bankrupt in 1998. But the legacy of the blind signatures would later prevail...