In the email archives of Satoshi Nakamoto, we learn about a failed peer-to-peer electronic cash system called DigiCash, founded by entrepreneur David Chaum in 1989 that eventually went bankrupt in 1998. Chaum wanted to build a more open payment system for online payments and personal information that was untraceable by governments and institutions (sound familiar?). The high-flying tech company used cryptography and public and private keys to secure digital transactions and an underlying currency called eCash. The main difference to Bitcoin today was the central reliance on banks. DigiCash required user software to withdraw notes from a bank and designate encrypted keys before eCash could be sent to a recipient. It used a blind system of signatures through DigiCash software to guarantee security for its users. The Mark Twain Bank, located in Missouri, was the only U.S. bank to support DigiCash, as well as Deutsche Bank in Germany and Credit Suisse in Switzerland. DigiCash was the first serious attempt to create a viable electronic payments system and one of the first to do it with cryptography keys and full anonymity. Despite the centralization, it was still very anonymous and no one would be able to link a single withdrawal with a single transaction. Despite decent user adoption and participation from large banks, DigiCash struggled heavily with regulation (especially in Europe) and eventually filed for bankruptcy in 1998. In 2018, Chaum launched his successor to Digicash, called Elixxir, proposing a faster Bitcoin.

Decrypt (Feb 3, 2019)