By Lumai Mubanga. [email protected]
They say there is no breakthrough success without frustrating failure. That is very true with the success of Bitcoin. Bitcoin immerged as the first successful cryptocurrency after many attempts by other forerunners who made early attempts. The success of bitcoins paved way for many more altcoins to emerge, thanks to Bitcoin predecessors.
There are three notable predecessors that offered the baseline or foundation on which the Bitcoin philosophy is build. These are Digicash, Hashcash and B-Money.
Cryptographer David Chaum implemented the first digital cash using the latest advancement in public and private key cryptography. He invented “blind signatures” while studying at a University. These signatures allowed users to sign off on transactions by concealing their identity. Digicash promised many users privacy when conducting online transactions and included a system of cryptographic protocols that prevented banks and governments from tracing personal online payments.
In 1998, Digicash experienced bankruptcy due to centralization caused mainly by the overwhelming burden of trying to validate each digital signature in the Digicash system. The development of Bitcoins adopted some workable principles from this failure that resulted in its success.
Originally developed as a mechanism to limit email spam, it required the solving of a cryptographic puzzle and the provision of proof of work in order to send out an email. An email could only be sent after appending a Hashcash stamp on the header of the email. This was proof of expending computational resources. The email recipient would have to look at the email header for the stamp to validate it. This prevented spammers from spamming emails, as it would prove costly for bulk broadcasting of emails.
It is the computational expense of sending out emails that disincentivised spammers. The development of Bitcoins imported critical principles from Hashcash such as proof of work to perfect its operations.
Created by Wei Dai, B-Money was an early proposal to create cryptocurrency. In 1998, he published a paper that laid out important concepts that later led to the successful implementation of bitcoins. One of those concepts was the principle of proof of work function, later used as a means of creating money in bitcoins.
Another concept in B-Money was that everyone would maintain a copy of the database, showing who owns what. Transaction were accomplished by collective bookkeeping and workers were awarded funds for their efforts.
All these ideas later influenced the development of bitcoins and all its successes today.
Failures of the past have a long history of influencing today’s successes. Never reinventing the wheels remains one of the best pillars of success in today’s digitized environment. With bitcoin setting its foot down, one can only guess what the future holds in the crypto space.