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Chaum developed multiple systems, and was working towards a cryptographic system that could replace paper money. The earliest systems required everyone to have an account; later systems developed by Chaum and other researchers supported offline transactions and allowed units of currency to be transferred between multiple parties without involving the bank. What all these systems had in common is that the bank issued the currency units, and for systems that supported offline transactions, potentially renewed those units. Some systems that support offline transactions allow the bank to "blacklist" people who try to double spend the currency; in theory, a corrupt bank might try to blacklist someone who was behaving honestly, but the users of the system could demand the proof of double spending before they accept such a blacklist.

Bitcoin's innovation was allowing currency to be issued without a central authority and still preserving the security against double spending. That comes at a high cost: you lose secure offline transactions or you incur a scalability problem (for Bitcoin, it is the former: no offline transactions). Chaum proved that this is the case for any digital cash system, regardless of central authorities (and in fact, central authorities are a handy way to deal with the issue: you choose the scalability hit and then allow the central authority to exchange used currency units for fresh ones):


> Chaum developed multiple systems, and was working towards a cryptographic system that could replace paper money.

Sounds cool, where can I download the source code and test this system?


It was not exactly something you could compile and run yourself. On the other hand, if you have time, you can go ahead and implement any of the systems Chaum proposed (you'll probably want to scroll down to the 80s and 90s):


Really though, Chaum's digital cash ideas involved building infrastructure around existing currency to protect privacy and prevent certain kinds of fraud (e.g. double spending, identity theft). Chaum was not trying to bring down the world's economic system with digital cash, he was just trying to give people a more secure way to pay for things electronically. The failure of his system in the real world was likely linked to the strong pushback by the US government against the use of good cryptography by "commoners."

On other words, talk is cheap, show me the code. It doesn't make much sense to compare a system which doesn't even have an implementation to a system, which is pretty widely used. And pretty easy to use even for the average Joe.

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