Digital Gold, Silver, False Promises And Digital Scams

Digicash, later acquired by eCash, could be called the parent to the idea behind Bitcoin. David Chalms, a brilliant programmer and cryptographic expert (cryptography is the math study focused on creating codes that are difficult or impossible to break for securing data), founded this digital currency. His ideas worked with some of the same concepts for creating online payment “tokens” similar to Bitcoin.

Digicash went bankrupt in September of 1998, although it had been more of a promise of major electronic currency, than a reality. With multiple failed business deals from Visa, Microsoft, ABN AMRO, ING and others, Digicash was unable to gain market traction.

According to an article about the demise of Digicash in NEXT! Magazine, January 1999:

“The dogma of Chaum, that DigiCash should aim for the virtual world, was abandoned. It was no use trying to compete against the credit card companies; they would squash you if you upset them. “

David Chalm repeatedly ruined market joint venture agreements by insisting on too much money and too much secrecy. Digicash and eCash died through mismanagement partly, and competitors that realized it could eat their lunch.

A digital or alternative currency needs to partner early, often, and profitably to survive and grow.

Knowing this historical lesson, anytime we see Bitcoin gaining a significant store, business, or website as a user, it is time to load up!
A great showcase of this effect occurred between December 2012 and February 2013. Wordpress.org started accepting Bitcoins, and the first Bitcoin bank (Bitcoin-central.com) opened up. Bitcoin rose from under $20 to over $34 in this period.

After Digicash and eCash went away, there were hobbyists that kept working on the concept for a new digital currency.

Something old and something new came together first, however, and e-gold hit the market. A Florida doctor and his computer savvy partner came up with a precious metals backed electronic currency. Unlike Bitcoin or eCash, real gold and silver backed up the value of e-gold.

e-Gold eventually reached a user base of over 5 million. While it used sophisticated encryption for handling transactions, it was a centralized currency. This is what ended up killing e-gold.
The U.S. government accused e-gold and it's founder of money laundering and other crimes. E-gold was soon finished. Even though the e-gold system still exists, it is no longer a live e-currency.

Any alternative currency with a central office, authority, or person will be shut down, jailed, or destroyed by a government and/or bank.

Even when the new alternative currency has no similarities with U.S. currency, the government will accuse the currency producer or promoter of the crime of counterfeit under Title 18 section 471 of the United States Code. Being found guilty results in a 20-year sentence (approx.).

Bernard Von NotHaus, founder of the Liberty Dollar, was convicted in 2011 of “making, possessing and selling his own currency.” People who bought the Liberty Dollar made a lot of money with his currency. It was silver backed, beautiful, and began to gain acceptance.

Anne M. Tompkins, a prosecuting attorney during the trial in Western North Carolina described the Liberty Dollar as "a unique form of domestic terrorism" trying "to undermine the legitimate currency of this country"(New York Sun, March 2011).
The jailing of a person founding a currency explains one of the reasons why the founder of Bitcoin is largely a secret.

Any person controlling a popular alternative currency will become vulnerable to legal actions sooner or later.