Comparing Would-Be Cryptocurrencies DigiCash and e-Gold Before Bitcoin Found the Remedy
When most think of cryptocurrency, they automatically consider Bitcoin and see it as the first cryptocurrency and successful one at that. However, there were others before Bitcoin, such as Digicash and e-Gold.
In 1983, David Chaum published a scientific article describing anonymous digital money. Thereafter, he developed DigiCash and even though it did not have an underlying blockchain technology and was based on a centralized authority, it was still secure and anonymous and it applied digital signatures. The cryptocurrency of the time was launched before the internet, which may have made it more difficult for it to gain headway.
Eventually, it did start gaining traction when ING Bank attempted to establish an agreement with Chaum, but in the end, he refused to agree. Then, Bill Gates reached out to Chaum and offered him $100 million to allow Microsoft Windows 95 to integrate the technology into the software, but Chaum refused. By 1999, DigiCash came to an end. Perhaps had Chaum made different decisions, the cryptocurrency would have survived.
Next is e-Gold and it was developed by Douglas Jackson in Florida. It had gained more traction than DigiCash and had about 1 million people using it. The system was integrated into e-commerce system and it became a popular element of casinos, commodities trading, and organization.
Though e-Gold saw some significant growth, the failing point of the cryptocurrency was a hack and freezing of e-gold reserves in 2001. Jackson was accused of money laundering and he pled guilty and paid a $200 fine and performed 300 hours of community service. Essentially, hacking and government regulation is what led to e-Gold’s end.
Hopefully, bitcoin will be able to perform better than its little-known predecessors.