Bitcoin did not come out of nowhere. For twenty years before it, a small community of cryptographers and programmers had been trying to build money for the internet.
The cypherpunks
In 1992, a group calling themselves the cypherpunks started a mailing list. Their belief: privacy and freedom in the digital age would be protected by code and cryptography, not by promises. Private money was one of their goals.
The attempts that came before
- eCash (1989): David Chaum's company DigiCash created private digital payments. It depended on one company, and when DigiCash went bankrupt in 1998, the system died with it.
- Hashcash (1997): Adam Back invented a way to make a computer prove it had done work, to fight email spam. Bitcoin mining uses this idea.
- b-money (1998): Wei Dai described money maintained by a network of anonymous participants.
- Bit gold (1998): Nick Szabo imagined scarce digital units created by solving computing puzzles, chained one after another.
- RPOW (2004): Hal Finney built reusable proofs of work, but they still relied on a central server.
The missing piece
Every design hit the same wall: without a central party, how do you stop someone from spending the same digital coin twice? Satoshi's breakthrough was to combine these ideas so that the whole network agrees on a single history, with nobody in charge.