In the days before credit cards became the dominant payment method on the Internet, a renowned cryptologist named David Chaum invented a sophisticated digital coin system for electronic commerce. In keeping with his deep concern for privacy, payments made under the system were anonymous - as with cash, buyers and sellers never needed to know one another's identity.

From his adopted home city of Amsterdam, Mr. Chaum founded a company, Digicash Inc., to license the system to banks. He earned several patents on it, and trademarked the name "eCash." One U.S. bank hosted a pilot, and several foreign banks - notably Deutsche Bank - also gave it a try. But management problems at Digicash and the complexity of the eCash system spoiled his plans, and, with interest from banks waning, eight-year-old Digicash filed for bankruptcy in November 1998.

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