Did cryptocurrency exist before bitcoin, and what can we learn from it?
The answer is yes it did.
In an article from Bitcoin Magazine written by Ian Grigg and reprinted with permission from financialcryptography.com, the author describes past attempts at electronic currency that has been developed for various purposes.
Here are some bits of the article, though I encourage you read the entire fill article, link found at the bottom.
First Smartcard
which occurred in the Netherlands, in the late 1980s, which was designed to thwart the robbery of fueling truck that would come to refuel in the middle of the night at unmanned stations. 25 years before bitcoin, they developed a sort of smartcard giving birth electronic currency. This eventually became known as POS or point-of-sale.
Digicash
David Chaum, an American cryptographer, had views on money and privacy that led him to believe that in order to do safe commerce, we would need a token money that would emulate physical coins and paper notes: specifically, the with a privacy feature of being able to safely pay someone hand-to-hand, and have that transaction complete safely and privately. So he invented the blinding formula, which is an extension of the RSA algorithm still used in the web's encryption, enabling a person to pass a number across to another person, and that number to be modified by the receiver. When the receiver deposits her coin, as Chaum called it, into the bank, it bears the original signature of the mint, but it is not the same number as that which the mint signed. Chaum's invention allowed the coin to be modified untraceably without breaking the signature of the mint, hence the mint or bank was 'blind' to the transaction. The invention of blinded cash was extraordinary and it caused an unprecedented wave of press attention. Unfortunately, David Chaum and his company made some missteps, and fell foul of the central bank (De Nederlandsche Bank or DNB). The private compromise that they agreed to was that Digicash's e-cash product would only be sold to banks. At one point Microsoft offered Chaum $180 million to put DigiCash on every Windows PC. But Chaum that it was not enough money, and the deal fell through, and Digicash ran out of money...
Web Based Money
On the coattails of Digicash there were hundreds of startups per year. First Virtual was a first brief spurt of excitement, to be almost immediately replaced by PayPal which did more or less the same thing.The difference? PayPal allowed the money to go from person to person, whereas First Virtual had insisted that to accept money you must "be a merchant," which was a popular restriction from banks and regulators, but people hated it. PayPal also leapt forward by proposing its system as being a hand-to-hand cash, literally: the first versions were on the Palm Pilot, which was extraordinarily popular with geeks. This geek-focus was quickly abandoned as PayPal discovered that what people -- real users -- really wanted was money on the web browser... In contrast, several ventures started up chasing a variant of PayPal's web-hybrid: gold on the web. The company that succeeded initially was called e-gold. With its popularity on the increase, the independent exchange market exploded into life in 2000, and its future seemed set.
The Regulatory Bust
e-gold however ran into trouble for its libertarian ideal of allowing anyone to have an account. While in theory this is a fine concept, the steady stream of ponzis, HYIPs, 'games' and other scams attracted the attention of the Feds. In 2005, e-gold's Florida offices were raided and that was the end of the currency as an effective force. The Feds also proceeded to mop up any of the competitors and exchange operations they could lay their hands on, ensuring the end of the second great wave of new monies.In retrospect, 9/11 marked a huge shift in focus. Beforehand, the USA was fairly liberal about alternative monies, seeing them as potential business, innovation for the future. After 9/11 the view switched dramatically, albeit slowly; all cryptocurrencies were assumed to be hotbeds of terrorists and drugs dealers, and therefore valid targets for total control.
Conclusion
Satoshi Nakamoto wrote, on releasing the code:> You know, I think there were a lot more people interested in the 90's,> but after more than a decade of failed Trusted Third Party based systems> (Digicash, etc), they see it as a lost cause. I hope they can make the> distinction that this is the first time I know of that we're trying a> non-trust-based system....
Here is the link to whole article which chopped down significantly. ARTICLE: https://bitcoinmagazine.com/articles/quick-history-cryptocurrencies-bbtc-bitcoin-1397682630/
**After reading the full article I'd love to hear your comment as to whether you think Bitcoin will survive, and if regulation on the buying and selling of it by investors with eventually help or kill bitcoin.