In the contemporary world, we live in, we tend to take everything that exists for granted. We are so hooked on technology and so dependable on networks, that cannot even imagine a society without them anymore. But the truth is, some of us remember, that it was not always like that. Actually, just some ten years ago, things were totally different. What to say about the times before twenty years.
Now, cryptocurrency seems to be accepted by the majority of the population everywhere around the globe. In fact, statistics say that in 2018 more than 60% of the Americans have heard of Bitcoin and more than 42% of the millennials would invest in cryptocurrency instead of standard financial assets. The percentage of crypto owners is also very high. Which means that the huge technological jump made by the blockchain begins to be adopted internationally. And the changes are so immense that we could not even imagine what would happen a few years ago.
However, Rome was not built for a day, as they say. Usually, the revolution explodes after many failures. After loads of failures. And if they seem small and insignificant to you, remember that these brought the ‘wind of change’ step by step.
Here, I want to tell you about some curious Bitcoin grandfathers without which we would not have reached the state of cryptocurrency we see now. Some of them are still known, some of them were smart asses’ dream and went into the fade. No matter what happened to these, it is interesting to track the path that leads us to here.
Ecash was founded by the American computer scientist David Chaum as early as in 1982. It was intended to be a sort of cryptographic which was supposed to keep owners’ anonymity. The idea was for the user to keep his money on a personal computer in a digital format. Payments would be possible on places which accept the ecash system. Chaum’s company, Digicash, worked with blind signatures – banks would have to approve asset possession but the user could or could not open an account in a financial organization. It was revolutionary in the emancipation of the assets of banks. Apparently, people struggled a long way to get rid of banks’ impossible conditions (and we still do, don’t we?). Ecash was also a pioneer in the microtransactions, later developed and refined by e-gold and e-bullion.
Ecash story ended with a bankrupt but did not completely disappear. On the contrary, it went through various conversions to reach Due Inc. in 2016. The micropayment electronic system was widely adopted in Europe by the major banks like Deutsche Bank, the Bank of Austria, Credit Suisse in Switzerland and the Swedish Posten AB among others. Ecash was not just an unsuccessful attempt of money revolution, it was an important step towards the current cryptocurrency situation.
E-gold was originally created by oncologist Douglas Jackson and attorney Barry Downey in 1996. Note the date, it was two years before PayPal. The company Gold & Silver Reserve Inc. intended to make up a digital asset-backed up with real gold. The aim was to secure faster transactions in a system between other e-gold accounts. It was a revolutionary project for the time: totally transparent, showing the number of the users on the website, the accounts, the conducted transactions for the last 24 hours and the denomination of the asset. That provoked many people to invest in it as an innovative way to send and receive money. At its peak in 2006, the company was processing more than $2 billion USD worth of spends per year, based on only $ 71 million of pure gold behind it. After that, e-gold started to support other precious metals, too and was used widely by merchants, private investors, online casinos and auctions, political and non-profit organizations. In 2000 even exchanges began to come out, offering to trade of e-gold versus fiat currencies. E-gold was one of the first peer-to-peer based system, which opened the doors for the ‘smart contracts’, used by the blockchain technology.
Unfortunately, e-gold was shut due to legal issues. There were many hacks and scam scandals involved as well. Great inventions are usually ahead of its time.
E-bullion was a digital asset quite similar to the e-gold. It was founded in 2000 and was a fast way for instant transfers of gold and silver. The company, based in California, offered an Internet-based digital gold currency linked to an account and crypto card security tokens to track illegal abuse. Both e-gold and e-bullion changed the way we transfer money forever. They literally twisted the law and re-invented the definition of a money transmitter legally. Without these peculiar examples, no payment systems would exist now (think of inter-banking systems, online money transfers, PayPal, SWIFT, etc.).
Anyways, the case of e-bullion ended up brutally. Its co-founder Pamela Fayed was murdered in 2008. She was stabbed to death by someone, allegedly hired by her husband Jim Fayed. He was then sued and now waits for a death sentence. Was it a love story or a twisted gold/ silver hate bloody mystery, we would never know. Gosh, I wish someone makes a film about that.
There you go, b-money is the real Bitcoin precursor. It was developed by the Chinese programmer Wei Dai as an “anonymous, distributed electronic cash system” in 1998. The rumor has it that Wei Dai shared his idea in a cypherpunks’ mailing list where Satoshi Nakamoto was also a member. Anyhow, the mysterious Bitcoin inventor was definitely aware of Dai’s proposal because he quoted him in the White paper of the cryptocurrency. Dai’s text was an original theoretical essay with meditations about the contemporary society, what a community is and how money can operate more effectively aside from the banks. It was smart, deep and truly inspired by the crypto-anarchy community (and still is though, I recommend you to check it out yourselves) The author proposed two protocols – an impractical one (requiring a broadcast) and a practical one. He wanted to show the steps of reaching the practical one.
B-money genuinely predicts the creation of the Bitcoin. Wei Dai proposes exactly the invention of digital money which would be valued by a solving of a problem with computing power. The transfer is conducted online, peer to peer, with contracts and electronic signatures. The procedure is anonymous, made through accounts with pseudonyms, a.k.a. public keys. Transactions are validated by a server (now we call it a node) which must send a chunk of information to the network about the money balance. Familiar? Dai was basically describing the blockchain.
And finally, a contemporary predecessor of the Bitcoin, still alive and usable. BitTorrent was initially launched in 2001 when did not receive a lot of public attention. In 2004 though, his creator Bram Cohen collaborated with his brother Ross Cohen and Ashwin Navin and created a company called BitTorrent after the name of the protocol. It was such an immediate success that in the same year the network was said to use 25% of the world’s Internet.
BitTorrent, just like the Bitcoin, works on a peer-to-peer basis. Another similarity is that BitTorrent’s ledger is also public – all operations are visible by the users. It is a decentralized network, in contrast to the traditional databases, and everyone is involved equally. Each account could play the role of a ‘seeder’ or a ‘leecher’, i.e. a downloader and an uploader. And because it is also open source, like with the Bitcoin, everyone can see what is going on in the software.
Recently, TRON (TRX) announced a partnership with BitTorrent on a new project called Atlas, as CryptoFrog reported. The project will revolutionize the file-sharing service with a new token and a blockchain upgrade.