{"id":10985,"date":"2023-07-19T15:23:58","date_gmt":"2023-07-19T15:23:58","guid":{"rendered":"https:\/\/www.bitnovo.com\/blog\/?p=10985"},"modified":"2022-05-18T00:04:20","modified_gmt":"2022-05-18T00:04:20","slug":"what-is-ecash-the-beginnings-of-electronic-money","status":"publish","type":"post","link":"https:\/\/www.bitnovo.com\/blog\/en\/what-is-ecash-the-beginnings-of-electronic-money","title":{"rendered":"What is eCash? The beginnings of electronic money"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-transparent ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Alternar tabla de contenidos\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #ffffff;color:#ffffff\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #ffffff;color:#ffffff\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.bitnovo.com\/blog\/en\/what-is-ecash-the-beginnings-of-electronic-money\/#who_is_david_chaum\" >Who is David Chaum?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.bitnovo.com\/blog\/en\/what-is-ecash-the-beginnings-of-electronic-money\/#digital_money\" >Digital Money<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.bitnovo.com\/blog\/en\/what-is-ecash-the-beginnings-of-electronic-money\/#blind_signatures\" >Blind Signatures<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.bitnovo.com\/blog\/en\/what-is-ecash-the-beginnings-of-electronic-money\/#ecash\" >Ecash<\/a><\/li><\/ul><\/nav><\/div>\n<span class=\"span-reading-time rt-reading-time\" style=\"display: block;\"><span class=\"rt-label rt-prefix\">Tiempo de lectura:<\/span> <span class=\"rt-time\"> 4<\/span> <span class=\"rt-label rt-postfix\">minutos<\/span><\/span><p>Cryptocurrencies have not always existed. Contrary to what many users believe,\u00a0<strong>Bitcoin<\/strong>\u00a0was not the first idea of digital money that existed, but rather eCash. Below we will look at one of the first phrases that gave way to the creation of cryptocurrencies:<\/p>\n<p><b>\u201cYou can pay to have access to a database, buy software or a newsletter, play a computer game over the internet, receive $5 USD that you owe a friend or simply order a pizza. The possibilities are truly limitless.\u201d\u00a0<\/b><\/p>\n<p>When you read this sentence you are probably thinking about Bitcoin. However, nothing could be further from that. This sentence is from 1994, specifically from cryptographer\u00a0<a href=\"https:\/\/www.bitnovo.com\/blog\/en\/who-is-david-chaum\/\">David Chaum<\/a>\u00a0at the first\u00a0<strong>CERN<\/strong>\u00a0conference in Geneva. This sentence was referring to eCash.<\/p>\n<p>We have all heard at least once about the\u00a0<a href=\"https:\/\/www.bitnovo.com\/blog\/en\/what-is-a-cypherpunk\/\">Cypherpunk<\/a>\u00a0movement. This movement had its beginnings thanks to\u00a0<strong>David Chaum.<\/strong>\u00a0Chaum was always ahead of his time, as the Internet was just becoming normalized at this time. Chaum\u2019s main concern was about online<strong>\u00a0privacy.<\/strong><\/p>\n<div class=\"is-divider divider clearfix\"><\/div>\n<div class=\"is-divider divider clearfix\"><\/div>\n<h2><span class=\"ez-toc-section\" id=\"who_is_david_chaum\"><\/span><strong>Who is David Chaum?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>As mentioned above, David Chaum is a pioneer of cryptography applied to the digital world.<\/p>\n<p>Chaum was born in\u00a0<strong>1955<\/strong>\u00a0in the United States. He received his PhD in Computer Science and Business Administration from the University of\u00a0<strong>Berkeley,<\/strong>\u00a0California. He is currently considered the father of digital money. We will see why later on.<\/p>\n<p>Chaum is well known for his career as a researcher, teacher and developer of cryptographic protocols. Chaum was a<strong>\u00a0promoter and organizer<\/strong>\u00a0of what were the first annual cryptography and cryptology conferences. These were held in\u00a0<strong>Santa Barbara<\/strong>, California starting in 1982. This conference was annual and was called\u00a0<strong>CRYPTO<\/strong>. It was attended by professionals of high knowledge in the field with the aim of showing the world\u00a0<strong>exhibitions<\/strong>\u00a0of new developments.<\/p>\n<p>At the conference known as\u00a0<strong>CRYPTO \u201982<\/strong>, Chaum presented the\u00a0<strong>white paper<\/strong>\u00a0of what would officially become the first digital money protocol in history. The seed of this project was the possibility of developing a new digital payment system based on cryptography by introducing the<strong>\u00a0concept of blind signature.<\/strong><\/p>\n<p>By\u00a0<strong>1990<\/strong>\u00a0David Chaum developed\u00a0<strong>DigiCash Inc<\/strong>. This company aimed at creating electronic money services implemented in their research. This company was the developer of the outstanding project,\u00a0<strong>eCash.<\/strong><\/p>\n<p><b>eCash\u00a0<\/b>was an improved version of the digital payment system previously developed by David. He did not carry out all this work alone, as he collaborated with other relevant cryptographers such as<b><a href=\"https:\/\/www.bitnovo.com\/blog\/en\/who-is-nick-szabo\/\">\u00a0Nick Szabo<\/a>\u00a0or Eric Hughes.\u00a0<\/b><\/p>\n<p>The eCash project was introduced to the world at the first\u00a0<strong>WWW94 (World Wide Web)<\/strong>\u00a0conference held in\u00a0<strong>1994<\/strong>\u00a0in Geneva, Switzerland. At this conference, all participants were shown how\u00a0<strong>eCash<\/strong>\u00a0was able to make electronic money payments through computers using simple software.<\/p>\n<p>Chaum has made his mark in the digital world, and not just with eCash. He has made countless contributions. Among some of the ones he has made for digital money we can find: the Trusted Voting System in 1981, the Blind Signature for untraceable payments in 1982,\u00a0<strong>the Zero Knowledge Protocol<\/strong>\u00a0in 1988, Untraceable Electronic Money in 1988, and finally<strong>\u00a0DigiCash<\/strong>\u00a0in 1990.<\/p>\n<div id=\"image_94061263\" class=\"img has-hover x md-x lg-x y md-y lg-y\">\n<div class=\"img-inner dark\"><img fetchpriority=\"high\" decoding=\"async\" class=\"attachment-large size-large lazyloaded\" src=\"https:\/\/www.bitnovo.com\/blog\/wp-content\/uploads\/2021\/10\/%C2%BFQu%C3%A9-es-eCash-La-primera-moneda-digital.jpg\" sizes=\"(max-width: 768px) 100vw, 768px\" srcset=\"https:\/\/www.bitnovo.com\/blog\/wp-content\/uploads\/2021\/10\/\u00bfQu\u00e9-es-eCash-La-primera-moneda-digital.jpg 768w, https:\/\/www.bitnovo.com\/blog\/wp-content\/uploads\/2021\/10\/\u00bfQu\u00e9-es-eCash-La-primera-moneda-digital-300x205.jpg 300w\" alt=\"\" width=\"768\" height=\"526\" data-srcset=\"https:\/\/www.bitnovo.com\/blog\/wp-content\/uploads\/2021\/10\/\u00bfQu\u00e9-es-eCash-La-primera-moneda-digital.jpg 768w, https:\/\/www.bitnovo.com\/blog\/wp-content\/uploads\/2021\/10\/\u00bfQu\u00e9-es-eCash-La-primera-moneda-digital-300x205.jpg 300w\" data-src=\"https:\/\/www.bitnovo.com\/blog\/wp-content\/uploads\/2021\/10\/\u00bfQu\u00e9-es-eCash-La-primera-moneda-digital.jpg\" data-sizes=\"(max-width: 768px) 100vw, 768px\" \/><\/div>\n<\/div>\n<div class=\"is-divider divider clearfix\"><\/div>\n<div class=\"is-divider divider clearfix\"><\/div>\n<h2><span class=\"ez-toc-section\" id=\"digital_money\"><\/span><strong>Digital Money<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Chaum was not concerned with the privacy of traditional communication but with a privacy system that would\u00a0<strong>preserve digital money:<\/strong><\/p>\n<p><b>\u201cThe choice between keeping information in the hands of individuals or organizations is made whenever any government or business decides to automate another set of transactions.\u201d<\/b><\/p>\n<p>This phrase was expressed by Chaum in\u00a0<strong>Scientific American in 1992<\/strong>. Ten years before these statements, the cryptographer had already discovered blind signatures for untraceable payments. When the bitcoin\u00a0<strong>veterans<\/strong>\u00a0had not yet appeared, Chaum had already discovered the solution for an\u00a0<strong>anonymous payment system<\/strong>\u00a0for the Internet.<\/p>\n<div class=\"is-divider divider clearfix\"><\/div>\n<div class=\"is-divider divider clearfix\"><\/div>\n<h2><span class=\"ez-toc-section\" id=\"blind_signatures\"><\/span><strong>Blind Signatures<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>It took several systems to make digital money work, but at the heart of digital money were \u201c<a href=\"https:\/\/www.bitnovo.com\/blog\/en\/what-are-the-blind-signatures\/\">Blind Signatures<\/a>\u201c.<\/p>\n<p>This system works by means of public key cryptography and cryptographic signatures. Public key cryptography employs\u00a0<strong>two keys<\/strong>. Each consists of a public key, which in turn is a completely random string of numbers that is mathematically derived from another truly\u00a0<strong>random<\/strong>\u00a0string of numbers that would be the private key.<\/p>\n<p>With the<strong>\u00a0private key<\/strong>, it is extremely important to generate the public key. However, if we only have the public key, it is almost impossible to generate the private key. In other words, it is a<strong>\u00a0one-way street.<\/strong><\/p>\n<p>Public key cryptography can be used to establish a private communication between two users. Imagine that users A and B share only their\u00a0<strong>public keys<\/strong>\u00a0with each other, but their\u00a0<strong>private keys<\/strong>\u00a0remain private. User A knows that only user B will be able to see the information he sends, but user B\u00a0<strong>cannot know who is sending the information.\u00a0<\/strong><\/p>\n<p>To check this, both users can\u00a0<strong>cryptographically sign<\/strong>\u00a0the data sent. To do this, user A must mathematically combine the data used with his private key. The result is a seemingly random string of numbers known as a \u201c<strong>signature<\/strong>\u201c. Thanks to this\u00a0<strong>process<\/strong>, user B can verify the signature with user A\u2019s public key.<\/p>\n<p>Blind signatures develop this concept by\u00a0<strong>taking it a step further<\/strong>, allowing data to be encrypted and verified for accuracy.<\/p>\n<div class=\"is-divider divider clearfix\"><\/div>\n<div class=\"is-divider divider clearfix\"><\/div>\n<h2><span class=\"ez-toc-section\" id=\"ecash\"><\/span><strong>Ecash<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The blind signature scheme was the one used by Chaum to create a functional digital money system. In this case, user A would be a bank like any real bank, with customers, bank accounts, and so on. Let\u2019s imagine that bank A has two customers\u00a0<strong>C1 and C2.<\/strong><\/p>\n<p>Two of the customers (C1 and C2) want to\u00a0<strong>trade<\/strong>\u00a0by buying something from the first customer. C1 requests a withdrawal in order to<strong>\u00a0pay<\/strong>. For this withdrawal, digital checks with unique serial numbers are generated. C1 hides the ownership of these checks and sends them to the bank. The bank\u00a0<strong>blindly signs<\/strong>\u00a0each check and sends them back to C1.<\/p>\n<p>Since the bank blind signed the checks, your signature will be\u00a0<strong>linked<\/strong>\u00a0to the original unconcealed checks. C1 can now use the\u00a0<strong>original<\/strong>\u00a0unconcealed checks to pay C2 for his purchase.<\/p>\n<p>When C2 receives the checks, he must<strong>\u00a0forward them to the bank.<\/strong>\u00a0The bank will verify with its public key its signature on these checks and will also verify that the checks have not been deposited by another user to ensure that they have not been\u00a0<strong>spent twice<\/strong>\u00a0(<a href=\"https:\/\/www.bitnovo.com\/blog\/en\/what-is-a-double-spending-attack\/\">double spending attack<\/a>).<\/p>\n<p>As the checks are\u00a0<strong>verified<\/strong>, the bank\u00a0<strong>adds the equivalent dollar amount<\/strong>\u00a0to the balance in C2\u2019s bank account and notifies C2. After this confirmation, C2 knows that C1 has paid with valid checks and can now<strong>\u00a0finalize<\/strong>\u00a0the sale.<\/p>\n<p>This\u00a0<strong>Chaum<\/strong>\u00a0solution, which offers privacy in payments, is something that already existed, but had never been seen<strong>\u00a0in a digital form.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p><span class=\"span-reading-time rt-reading-time\" style=\"display: block;\"><span class=\"rt-label rt-prefix\">Tiempo de lectura:<\/span> <span class=\"rt-time\"> 4<\/span> <span class=\"rt-label rt-postfix\">minutos<\/span><\/span>Cryptocurrencies have not always existed. Contrary to what many users believe,\u00a0Bitcoin\u00a0was not the first idea of digital money that existed, but rather eCash. Below we will look at one of the first phrases that gave way to the creation of cryptocurrencies: \u201cYou can pay to have access to a database, buy software or a newsletter, [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":6657,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[185],"tags":[],"class_list":["post-10985","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blockchain-en"],"_links":{"self":[{"href":"https:\/\/www.bitnovo.com\/blog\/wp-json\/wp\/v2\/posts\/10985","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.bitnovo.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.bitnovo.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.bitnovo.com\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.bitnovo.com\/blog\/wp-json\/wp\/v2\/comments?post=10985"}],"version-history":[{"count":0,"href":"https:\/\/www.bitnovo.com\/blog\/wp-json\/wp\/v2\/posts\/10985\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.bitnovo.com\/blog\/wp-json\/wp\/v2\/media\/6657"}],"wp:attachment":[{"href":"https:\/\/www.bitnovo.com\/blog\/wp-json\/wp\/v2\/media?parent=10985"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.bitnovo.com\/blog\/wp-json\/wp\/v2\/categories?post=10985"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.bitnovo.com\/blog\/wp-json\/wp\/v2\/tags?post=10985"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}