Wei Dai, the creator
Wei Dai is a world-renowned cryptographer of Chinese descent and holds a degree in computer science from the University of Washington.
He began his career as a computer engineer in the early 1990s. He worked as a developer for TerraSciences, before being hired by Microsoft as a cryptographer.
Wei Dai works on personal projects in the field of cryptography and open source. In particular, we can mention Crypto++, a library of cryptographic functions in C++.
B-money, the forerunner of Bitcoin…
As with Bitcoin, “b-money” refers to both the protocol (the set of rules to be followed to participate) and the currency itself. In his description of the model, Wei Dai describes two slightly different versions of the protocol.
First version of the protocol
Money creation can be carried out by all participants. It is sufficient for one of them to disseminate the solution to a known and previously unsolved computer problem.
The number of units created then depends on the cost of this effort expressed in relation to a standard basket of goods (which may include precious metals, for example).
This is a kind of proof of work to guarantee a certain stability of the b-money: when its price rises in relation to the basket of goods, economic players deploy more computing power to flood the market; conversely, when its price falls, economic players are encouraged to use less computing power and thus monetary creation is slowed down.
Second protocol version
The second version of the protocol differs from the first in that the ownership register is no longer kept by everyone, but only by a subset of participants called servers. Participants in a transaction must then verify that their transaction has been processed by sending queries to a random sample of servers.
Since the servers need to be trusted to a certain extent, a cost-effective mechanism to remind them of the proof of issue is put in place to ensure that they remain honest.
Each server deposits an amount of b-money into a special account to be penalized for misconduct. In addition, they are obliged to publish their money creation and register on a regular basis.
For their part, the participants check that their balance is correct and that the sum of the balances of the different accounts does not exceed the announced amount of money created, thus preventing arbitrary inflation.
Full article on the Journal du Coin ecrit par Ludovic Lars (Article in French).