In the previous article of this series, we discussed in brief about Wei Dai and some of the areas he got involved in, such as B-money, Crypto++ library, VMAC Internet Draft and many more. We are going to dig a little deeper about B-Money, one of the important predecessors of Bitcoin.
What Is B-Money?
B-money by Wei Dai was among the very first proposed cryptocurrencies before they actually emerged like we witness them today. It was supposed to be an anon and dispersed E-cash system, similar to the digital assets we know today.
While many people, especially the ones who know that Bitcoin is the first ever cryptocurrency or the 1st generation of digital coins, do not know that there were some prominent predecessors of the crowned crypto asset, B-money was among them. But it was never launched officially.
Wai Dei got motivated from the crypto anarchy manifesto written by Tim May. It is a concept where authority is forbidden completely as it becomes useless here. Crypto anarchy eliminates the physical chaos as the folks and their locations remain anonymous here.
B-money uses the kind of encryption that services like military and other government services utilizes, a language which only they can interpret.
How B-Money Was Supposed To Be Used?
We discussed a couple of protocols, one impractical and other was practical, in the previous article.
The impractical approach consisted of 5 sections — money creation, money transfer, effecting of contracts, conclusion of those contracts, and their enforcement. Here every individual owns a dataset associated with the total money belonging to the pseudonymous account.
Wei Dai says that money creation is easy as it can be done by broadcasting solutions to the past computational problem. Amount of computing effort should be determined it will take to solve the previous problem, and this is the important element as if it is not done then it neither will have intellectual or practical value.
In the second protocol, the pseudonymous accounts were kept with servers instead of everyone. Here, validation of the messages is required, which is done by server subset (participants).
Alternative B-Money Creation
Wei Dai proposed an alternative to the b-money creation due to persisting issues in the money creation. He proposed that a consensus must be there among the account keepers or the participants regarding how much B-money to be created every time, where an auction will determine the cost of money creation.
His proposal is categorized into 4 stages — Planning, Bidding, Computation and Money Creation.
In the planning stage, account keepers are required to discuss the total increase in money supply for the upcoming period. And they do not have to be in consensus but they have to broadcast their thoughts or whatever numbers they think are right.
In the bidding stage, participants desiring to broadcast need to make the bid, and there must be a nominal cost on which the participants should be agreed.
In the computation stage, bidders can broadcast solutions to the problems.
Finally, in the money creation stage, account keepers choose the highest bidder with respect to the nominal cost on every b-money unit created and appropriately credit the accounts of the bidders.
So, here I conclude the article and I hope it helps you understand the concept of B-money, as a solution offered by Wei Dai before Bitcoin which never got launched. In the next part, I am going to discuss with you guys about some of his applications in cryptography like Crypto++, VMAC etc. See you in the next article of this series folks.
Anubhav B is working as a fundamental writer for The Coin Republic since 2021. He likes to exercise his curious muscles and research deep into a topic. Though he covers various aspects of the crypto industry, he is quite passionate about the Web3, NFTs, Gaming, and Metaverse, and envisions them as the future of the (digital) economy. A reader & writer at heart, he calls himself an “average guitar player” and a fun footballer.
