The idea of cryptographically secure digital currencies got their start in the 1980s and 1990s, led by a movement called cypherpunks.
However, it was not until 2009 that Bitcoin arrived as a successful experiment that solved problems that previous experiments could not, such as double spending.
A cryptographer played a particularly central role in the development of today's cryptocurrencies and was one of the few to be cited in the Bitcoin whitepaper. Let's get to know a little more about him, Wei Dai.
Wei Dai was also part of the cypherpunks' mailing list and one of the characteristics that makes him most evident is his interest in privacy. There are not so many details about his life and no photos.
through which it can be said that it is him, although there are some images on the internet that supposedly show him.
The available information about Wei Dai points to a computer engineer of Chinese origin, a graduate of the University of Washington in computer science, and who had a specialization in mathematics. These two areas allowed him to demonstrate his talent in creating world-class encryption systems and solutions and to be responsible for major contributions to the field of technology.
He developed the Crypto++ cryptographic library (a digital library of C++ classes with cryptographic schemes and algorithms,
which Dai keeps up to date to this day) and co-proposed the VMAC message authentication algorithm.
It is also known that in his professional life he was responsible for inventing two US patents, # 5724279 and # 6081598, both
assigned to Microsoft.
But one of his biggest contributions and that echoes to this day was the proposal for a digital currency, which he called b-money, which we will see in more depth below.
B-MONEY
First revealed in 1998, b-money was created to be an anonymous, distributed electronic money system. Dai described b-money as "a scheme for a group of untraceable digital aliases to pay each other cash and enforce contracts with each other without outside help".
According to Dai, the project was an entirely personal endeavor, not tied to any funding or corporation. It was motivated solely by personal interest, as he comments.
When creating b-money, Dai envisioned providing a tool for privacy and peacemaking.
He already imagined that a monetary instrument, which would serve people to transact anonymously and independently of powerful intermediaries, would be a great contribution to humanity.
Dai said, "A community is defined by the cooperation of its participants, and efficient cooperation requires a medium of exchange (money) and a way of enforcing contracts.
Traditionally, these services have been provided by government or government-sponsored institutions and are for legal entities only."
HOW B-MONEY WORKS
The b-money concept included two proposals, where the intention was to create a mechanism whereby individuals could pay each other anonymously and without the intermediation of third parties, using a SHA-1 verified digital currency.
Briefly, b-money used the main concepts found in the Bitcoin operating mechanism:
- Application of a Proof of Work system to generate coins and secure the network.
- Receiving funds as a form of reward for work.
- The exchange of funds and the verification of transactions are done through collective accounting and are authenticated with cryptographic hashes.
- Dai suggested using digital signatures, or public keys, for authenticating transactions and enforcing contracts. In other words, the system bases its operation on asymmetric cryptography.
“[…] A scheme for a group of untraceable digital aliases to pay each other cash and enforce contracts with each other without outside help.” (Wei Dai on b-money)
“My motivation for b-money was to enable online savings that are purely voluntary [...] those that could not be taxed or regulated through the threat of force.” (Wey Dai talking about his motivations for creating b-money)
“It allows entities with untraceable pseudonyms to cooperate with each other more efficiently by providing them with a medium of exchange and a method of enforcing contracts.
The protocol can probably become more efficient and secure, but I hope this is a step towards making cryptanarchy a practical and theoretical possibility.”
DAI'S INFLUENCE ON TODAY'S DIGITAL CURRENCIES
If you are thinking that b-money looks a lot like Bitcoin, you are not mistaken.
Even though it was never officially launched, b-money was the first truly decentralized digital currency initiative ever made. The theoretical foundations of b-money are almost all the same as those followed by current cryptocurrencies.
b-money remains a key figure in the early development of the industry. An interesting curiosity that demonstrates Dai's influence among developers is the name given to the smallest unit of ether, the digital currency of the Ethereum network, which is called "wei" in honor of Wei Dai's work. As stated at the beginning of the article, Wei Dai's whitepaper on b-money was one of the few sources cited by Nakamoto in the Bitcoin whitepaper.
If you are thinking that b-money looks a lot like Bitcoin, you are not mistaken.
Even though it was never officially launched, b-money was the first truly decentralized digital currency initiative ever made. The theoretical foundations of b-money are almost all the same as those followed by current cryptocurrencies.
b-money remains a key figure in the early development of the industry.
An interesting curiosity that demonstrates Dai's influence among developers is the name given to the smallest unit of ether, the digital currency of the Ethereum network, which is called "wei" in honor of Wei Dai's work.
As stated at the beginning of the article, Wei Dai's whitepaper on b-money was one of the few sources cited by Nakamoto in the Bitcoin whitepaper.
In addition to his reference in the whitepaper, Dai and Nakamoto also exchanged some emails in 2008, which led to him being regarded as a great candidate to be the real Satoshi Nakamoto.
While there are many similarities between the b-money proposal and Bitcoin (and in turn many other tokens and subsequent digital currencies as well), the exact relationship between Wei and Nakamoto is not clear.
It's so simple to draw.
Dai stated in recent years: "My understanding is that the creator of Bitcoin didn't even read my article before reinventing the idea himself. He learned about it later and credited me in his article. So my connection to the project is quite limited”.
This could be just to disperse attention or actually Dai has no direct relationship to the creation of Bitcoin specifically.
But his commitment to decentralization, encryption, and ideas of freedom and privacy, led him to pioneer the thinking behind a trustless digital currency. So we can say that with the help of Nakamoto, b-money evolved into Bitcoin.