Well over a decade before Bitcoin ever came to fruition, British cryptographer Adam Back came up with an algorithm that would prove crucial to the digital currency. Specifically, in March 1997 he devised the “hashcash” proof of work data that inspired the system that Bitcoin uses to mine new coins. “To implement a distributed timestamp server on a peer-to-peer basis, we will need to use a proof-of-work system similar to Adam Back’s Hashcash,” wrote Satoshi Nakamoto in the original Bitcoin white paper. Back is also one of the authors of the Bitcoin Sidechains white paper “Enabling Blockchain Innovations with Pegged Sidechains,” released in October, and one of the founders of Blockstream.
But that’s not all that hashcash is good for. In effect, it can also be used to combat large batches of spam emails by making attaining a proof of work for each one a lengthy and difficult process. Despite hashcash’s importance to Bitcoin, however, Adam Back has proven to be rather modest about the inadvertent role he played in the development of the cryptocurrency. In a 2013 post on the Bitcoin Forum, for example, he wrote, “[W]hile it is true that I invented hashcash, I am not claiming Bitcoin is some simple extension. Bitcoin has actually several key innovations that no one succeeded with before.”