Definition
b-money is a 1998 proposal by computer engineer Wei Dai for an anonymous, distributed electronic cash system. Published in a short paper titled B-money: an anonymous and distributed electronic cash system, it described how participants could exchange value and enforce contracts without a central authority, a full decade before Bitcoin launched. Satoshi Nakamoto cited b-money in the Bitcoin whitepaper, making Wei Dai one of the named intellectual predecessors of the network.
Core ideas
Dai outlined two related models. In the first, every participant maintains a copy of a collective ledger recording how much money belongs to each pseudonymous identity, with new money created by solving computational problems, an early articulation of proof-of-work issuance. In the second, a subset of "servers" holds the ledger and is bound by deposits that can be forfeited for misbehavior. Both versions anticipated themes central to Bitcoin: decentralized consensus, pseudonymous keys, and money tied to computational effort.
Why it was never built
b-money remained a proposal and was never implemented. Dai himself later acknowledged it left open hard problems, particularly how the network would agree on the difficulty of the computational work and how to keep the distributed ledger consistent under disagreement. Bitcoin's contribution was not inventing these concepts from scratch but assembling them into a system that actually reaches consensus through the longest-chain rule and timestamped blocks.
For the related precursor that came soon after, see Bit Gold, and for how these ideas converged, the Bitcoin whitepaper.
In Simple Terms
b-money is a 1998 proposal by computer engineer Wei Dai for an anonymous, distributed electronic cash system. Published in a short paper titled B-money: an…