History lesson: the first idea for cryptocurrency

Every wonder when the first noted idea for cryptocurrency was?

The idea for cryptocurrency first emerged in 1983, when American cryptographer David Chaum published a conference paper outlining an early form of anonymous cryptographic electronic money.

The concept was for a currency that could be sent untraceably and in a manner that did not require centralized entities (i.e. banks). In 1995, Chaum built on his early ideas and developed a proto-cryptocurrency called Digicash. It required user software to withdraw funds from a bank and required specific encrypted keys before said funds could be sent to a recipient.

Bit Gold, often deemed a direct precursor to Bitcoin, was designed in 1998 by Nick Szabo. It required a participant to dedicate computer power to solving cryptographic puzzles, and those who solved the puzzle received a reward. Combined with Chaum’s work, it results in something that comes very close to resembling Bitcoin.

But Szabo could not solve the infamous double-spending problem (digital data can be copied and pasted) without the use of a central authority.

As such, it was not until a decade later when a mysterious person or group, using the pseudonym Satoshi Nakamoto, set the history of Bitcoin and later cryptocurrencies in motion, by publishing a white paper called “Bitcoin – A Peer to Peer Electronic Cash System.”