As part of his research into Privacy-Preserving Computation, David Chaum developed a concept for a public-key encryption algorithm that could be used for secure communications. David Chaum wanted to create a primitive that would offer a level of security that would be similar to the way we now use public key cryptography for secure email and storage. With the advent of the Internet, people began using passwords as their first form of digital signature.
Because these passwords were stored in plaintext, they were easily stolen and could be used to access other accounts. David Chaum realized that with electronic money, we could create a more secure digital currency. His solution was called blind signature.
Szabo’s idea was similar to Chaum’s: a distributed network of volunteer computers that would offer a system for anonymous, secure, and self-sustaining digital currency. The idea was to implement a peer-to-peer electronic cash system, with no central authority that could grant or deny transactions. In May 1998, Nick Szabo’s first implementation of the concept for a decentralized electronic cash system was ready. This implementation required network participants to solve a complicated cryptographic puzzle, and all those that solved the puzzle would be awarded reward. The puzzle was called Bit Gold, and its cryptographic solution would become the foundation of all cryptocurrencies.
Bitcoin’s network is a public ledger of all transactions that have ever been made on the network. This ledger is called the Blockchain, which in combination with the public key encryption algorithm, provide anonymity and security to transactions. All transactions are recorded in a public and immutable database, called the blockchain, and each transaction takes a very small amount of time. All the data needed to verify a transaction is recorded on the blockchain: the public keys of the two participants involved in the transaction, the time when the transaction was made, and the amount of transaction.
Bitcoin is the first, and so far, the only successful implementation of an anonymous digital currency. Other cryptocurrencies are in their early stages of development, with the most important development being blockchain technology. The history of cryptocurrency can be told as the rise of blockchain technology. The blockchain is an encrypted, distributed, public database.
In 2006 a developer called Amir Taaki published a white paper called Dark Lightning. He published his solution to the double.