3 unsuccessful digital currencies that existed before bitcoin
Bitcoin was one of the many developments that revolutionized the modern way of spending and receiving money. It established a secure network where people could anonymously spend and receive money, and that too, securely. Also, people did not have to get up from where they were sitting, they could use their mobile phones as well, and the process of the transactions was really very simple compared to that of other net banking services, although PayPal was a major rival to this service. But was Bitcoin really the first of the many crypto currencies that we have today? Of course, it was the currency that revolutionized the entire process; it was most certainly not the first. Many people have tried to create crypto currencies way before Bitcoin, and all of them failed, evidently, since Bitcoin is at the top of the market. Here, we cover three of the most popular failures, three digital currencies that could have become like the digital currency Bitcoin, before Bitcoin itself.
A digital currency for paying people is always better than real ones for matters like rewards for online services. Beenz was one of the first companies to offer a currency to be used for this idea. This idea predates to the 1990s, which is really very old. Beenz tried to raise funds, and on that matter, it gained a lot of traction, raising to around $80 Million. In 2000, Beenz made a deal with MasterCard, and things were looking good for the tech company. However, in 2001, the company started having financial problems. By mid-2001, it was publicly thinking about having a better structure for its products. It was then forced to create a separate platform for marketing its services, which turned out to be the end for this company as it was forced to stop spending, and then the company itself was later shut down in the same year.
In the late 90s, Flooz raised funds for a product which was a digital currency merchants could use for accepting payments. It drew a lot of attention, gaining $35 million in investments though the company lasted for three more years. The company pursued aggressive promotions and advertising. It can be thought of like an online voucher, wherein people could be rewarded through campaigns or they could purchased from the Flooz official website. It carved out a strong presence but sadly, it couldn’t capitalize on it. By mid 2001, there was a lot of allegations and claims that criminals were using its platform. All this created a sense of panic amongst the merchants and it was reported that Russian criminals were using illegally obtained credit cards in order to purchase the digital currency. It was also revealed that more than $250,000 was stolen. All these revelations forced Flooz to close down.
This was quite an interesting case since it came quite close to success at the world level. It was created by David Chaum in the 1990s, who is more notable for inventing the eCash system. This company created a crypto currency called cyberbucks, and they wanted to create an online currency which was both safe and user-friendly. They also made it anonymous, like Bitcoin, and this currency got a fair amount of attention, including a piece on the prestigious ‘The Guardian’. The company had various modes of payment, including a micropayment system. It used the email system for the transactions of its currency. How did it fall? Well, reports show that it was due to both a disagreement between the higher and the lower authorities within the company, as well as a lack of funding. The company got bankrupt two years after Chaum left.
Well, there you have it – three currencies that came close to the level of Bitcoin, but failed. Why you may ask. It is possibly because, either that Bicoin just had a lot of luck compared to the other cryptocurrencies, or maybe that the technology needed to develop more before it gave us a successful cryptocurrency. Whichever way you look at it, you can see that Bitcoin indeed wasn’t the first cryptocurrency, but the first successful one.
This article was written by the admin of Techist.net, a tech blog