Bitcoin
The History Of Digital Money
The Road To Digital Money
Foundational Technology
Peer-to-Peer Networking, Encryption, Digital Signatures, Blockchain 1974 - 1991
Influential Groups / People
Government Agencies, Universities, Cryptographers
Attempts At Digital Money
DigiCash, E-Gold, B-Money, Bitgold, Liberty Reserve, R-POW
1989 - 2006
Emergence Of Bitcoin
Bitcoin White Paper
September 2008 - Present
Foundational Technology
Technology Timeline
Creators: Vinton G. Cerf & Robert E. Kahn Created: 1974
Creators:Ron Rivest, Adi Shamir & Leonard Adleman Created: 1977
Influential Figures
Influential Figures
Government Agencies
Public Universities
CypherPunks
Notable Projects From Cypherpunk Mailing Members
Notable Cypherpunks
Bio: University of California Berkeley, Doctorate Computer Science & Business Admin
Notable Accomplishments: Widely recognized as the inventor of digital cash.
Contributions: DigiCash, Blind Digital Signatures,
Bio: California Institute of Technology, BS Engineering Deceased: 1956-2014
Notable Accomplishments: Received the first bitcoin transaction from Bitcoin's creator Satoshi Nakamoto
Contributions: R-POW, Early Bitcoin Developer,
Bio: University of Washington Computer Science & George Washington University Law
Notable Accomplishments: Widely recognized as the creator of the phrase and concept of "smart contracts"
Contributions: Bitgold, Smart Contracts,
Bio: University of Exeter South West England PhD Computer Science
Notable Accomplishments: Created a proof-of-work system that was cited in the Bitcoin whitepaper.
Contributions: Hashcash, Blockstream,
Attempts At Digital Money
Prior Attempts At Digital Money Timeline
DigiCash (E-Cash)
Creator:David Chaum Created: 1989
Creators: Nick Szabo Created: 1998
Case Study
Centralized Digital Money Systems
Overview: DigiCash Inc. was a corporation founded by David Chaum in 1989. DigiCash pioneered a form of early electronic payment called eCash. eCash required a user to run software to withdraw digital banknotes from a bank and designate specific encrypted keys before it can be sent to a recipient.
Adoption: The Mark Twain Bank, located in Missouri was the only U.S. bank that supported DigiCash systems. Deutsche Bank, based in Germany, was the second backing bank of DigiCash systems.
Failure: The Company went bankrupt in 1998 after only achieving 5,000 user signups.
Overview: E-gold was a digital gold currency operated by Gold & Silver Reserve Inc. E-gold allowed users to open an account on their website denominated in grams of gold and gave the account owner the ability to make instant transfers of value to other e-gold accounts.
Adoption: The e-gold system was launched online in 1996 and had grown to five million accounts by 2009. At its peak in 2006, e-gold was processing more than $2 billion USD worth of transactions per year.
Failure: In 2007 the US Federal government shut down e-gold for money laundering and other financial crimes.
Overview: Liberty Reserve was a centralized digital currency service that allowed users to deposit USD which was then "converted" into Liberty Reserve Dollars. Each Liberty Reserve Dollar was pegged to the the U.S. dollar.
Adoption Liberty Reserve had more than 1 million registered users, 200,000 of which were from the United States. It is alleged to have been used to process more than $6 billion in proceeds during its history.
Failure: The company was charged with money laundering and operating an unlicensed financial transaction company.
Protocols For Digital Money
Overview: Bitgold was a system for the decentralized creation of unforgeable proof of work chains, with each one being attributed to its discoverer's public key, using timestamps and digital signatures.
Innovation: The Bitcoin gold system is remarkably similar to the Bitcoin system except for its reliance on Byzantine-resilient peer-to-peer consensus.
Failure: The BitGold system was never implemented, however A month after publishing the BitGold system, Satoshi Nakamoto would release Bitcoin’s source code and mine the first Bitcoin.
B-Money: Wei Dai
Overview: B-Money was an anonymous, distributed electronic cash system where "digital aliases" would be able to send and receive money over a decentralized network.
Innovation: B-Money used a proof of work function for money creation and required all participants to broadcast their transaction to all other participants.
Failure: The B-money system was never implemented, however it was referenced by Satoshi Nakamoto in the Bitcoin White Paper.
R-POW: Hal Finney
Overview: R-POW was a digital cash prototype that creates tokens by providing a proof-of-work string, that can be transferred by signing a transfer order to a specified public key.
Innovation: R-POW was a direct precursor to Bitcoin and was the only digital collectible to ever function as a piece of software.
Failure: R-POW failed to solve the double spend problem in a decentralized way and relied on a secure but centralized server to record all transactions.
Reasons For Failure
Vestibulum congue
Centralized Issuance
Trusted Third Party Coordinator
Double Spend Problem
No Proof-Of-Work
Bitcoin Fixes This
Previous attempts at creating digital money failed for various micro issues but with a macro theme of centralization.
Centralized Systems
Having a centralized issuer or coordinator creates an attack vector where the issuer can be put under political pressure to shutdown the system.
Protocols
A number of theoretical computer science issues are highlighted when trying to create a decentralized protocol for money.
-How do participants claim ownership of the money?
-How do you coordinate a payment without using an intermediary?
-How do you issue new units of money?
Emergence Of Bitcoin
Early Bitcoin Timeline
Bitcoin.org Domain Name Is Registered
2008-08-08
2009-01-08
Satoshi Nakamoto
Satoshi Nakamoto is the name used by the pseudonymous person or persons who developed bitcoin, authored the bitcoin white paper, and created and deployed bitcoin's original reference implementation.
Satoshi Nakamoto interacted with the Bitcoin community for 4 years before disappearing .
Satoshi leaving the Bitcoin community was a pivotal moment in Bitcoins history. Without a centralized thought leader dicating Bitcoins direction, Bitcoin development can be dictated by the community.
A collection of all of his public communications can be found on the Satoshi Nakamoto Institute website.
The Bitcoin Whitepaper
Bitcoin: A Peer-To-Peer Electronic Cash System was sent to cryptography mailing list on October 31st 2008 by Satoshi Nakamoto.
The Bitcoin Whitepaper combined over 30 years of cryptography research to devise a system that solved two computer science problems
An annotated version of the White Paper can be found at Fermat's Library to help breakdown some of the complex computer science topics covered
https://fermatslibrary.com/s/bitcoin