At a Bitcoin conference in 2021, Nick Szabo, often called the father of smart contracts, reflected on these early experiments. His memories remind us that Bitcoin did not appear out of nowhere. It was born out of decades of testing, debate and unsuccessful but valuable attempts.
In the mid-1990s, Szabo remembers reading Extropy magazine, a trade publication that explored how technology could reshape society. In a 1995 issue, the authors discussed ideas such as virtual banks and a digital currency called Hayeks. These concepts were not usable products. They were thought experiments. That same year, Szabo proposed the idea of smart contracts, simple computer programs that automatically enforce agreements without the need for a trusted intermediary.
First digital currency and minimum trust
One of the most important real-world examples cited by Szabo is DigiCash, created by cryptographer David Chaum in the late 1980s. DigiCash used a technique called blind signatures. Simply put, this allowed users to make payments without revealing their identity to the issuer. Its test token, Cyberbucks, is often described as the first truly private digital currency.
DigiCash ultimately failed as a company, but its ideas lived on. This proved that digital money could work with very little trust in central parties. This lesson shaped later designs. In the late 1990s and early 2000s, Szabo helped manage the Libtech mailing list, a small online forum where developers shared ideas about privacy, money, and cryptography.
These conversations directly influenced several key projects predating Bitcoin. Bit Gold, designed by Szabo, explored how rare digital assets could be created without a central issuer. Wei Dai’s b money offered a distributed ledger to track sales. Hal Finney’s RPOW tested a reusable proof of work. None of these systems completely solved the problem. Together, they formed the missing pieces that Bitcoin then assembled.
Why these ideas matter today
This story seems newly relevant. A recent trend in crypto is a renewed focus on fundamentals. As speculation cools, manufacturers are returning to core ideas like trust minimization and user control. Smart contracts now guarantee real value. Ethereum alone processes over a million transactions per day and supports tens of billions of dollars in decentralized finance.
The father of smart contracts reflects on decentralized experiments before the birth of Bitcoin
Nick Szabo, “father of smart contracts,” recalled at a 2021 Bitcoin conference that Extropy magazine from 1995 discussed concepts like virtual banks and a digital currency called… pic.twitter.com/grGGbyAAiP
-Wu Blockchain (@WuBlockchain) January 30, 2026
For investors, this context is important. Bitcoin and modern blockchains are not sudden miracles. They are the result of long experimentation and careful iterations. Understanding these roots helps explain why decentralization and simplicity remain central values.
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