Founded in Amsterdam around 1990, DigiCash supplied wallet and banking software for digitally signed bearer-like tokens. Banks still issued and redeemed the denominated value, so the system protected payment privacy without removing trusted issuers.
DigiCash was the business organization; eCash was its payment technology. David Chaum founded the Amsterdam company to turn his earlier research on blind signatures and untraceable payments into working products. [David Chaum — eCash archive] [European Commission — The story of DigiCash and eCash]
A wallet generated a coin serial number, hid it with a blinding factor and sent it to a bank. The bank debited the customer and signed the hidden value, but could not see the serial it had certified. [David Chaum — Blind Signatures for Untraceable Payments]
After removing the blinding factor, the user held a valid bank signature on the coin. A merchant accepted the token and sent it for verification or deposit, while the bank could authenticate the signature without linking it to the earlier withdrawal. [David Chaum — eCash archive] [David Chaum — Blind Signatures for Untraceable Payments]
Digital files can be copied, so the same coin could be presented twice. Online eCash checked serial numbers against the issuing bank’s spent-coin database; researched offline variants could reveal a double spender after reuse. [David Chaum — eCash archive] [David Chaum — Blind Signatures for Untraceable Payments]
The commercial tokens represented conventional currency liabilities of participating banks. Their value and redemption depended on an issuer; DigiCash did not create a decentralized monetary asset or algorithmic supply. [David Chaum — eCash archive] [European Commission — The story of DigiCash and eCash]
DigiCash demonstrated its own CyberBucks test currency and recorded an early electronic cash payment in 1994. The experiment proved that blind-signature cash could operate in consumer software before broad internet commerce existed. [David Chaum — eCash archive] [WIRED — E-Money (That’s What I Want)]
Mark Twain Bank launched a U.S. eCash service in 1995, and European banks including Deutsche Bank ran or licensed deployments. Adoption nevertheless remained small and fragmented among banks, merchants and wallet users. [David Chaum — eCash archive] [Mark Twain Bank and DigiCash report]
Blind signatures concealed the link between withdrawal and payment, not every surrounding fact. Merchant records, network metadata, compromised wallet software, issuer policy and lost device keys could still reduce privacy or usability. [David Chaum — eCash archive] [David Chaum — Blind Signatures for Untraceable Payments] [WIRED — E-Money (That’s What I Want)]
DigiCash entered bankruptcy in 1998. Contemporary accounts point to weak adoption, difficult bank and merchant integration, an immature e-commerce market and commercial decisions—not a demonstrated break of the blind-signature cryptography. [European Commission — The story of DigiCash and eCash] [WIRED — DigiCash Outta Cash]
DigiCash established that cryptographic cash could give users payment privacy. Bitcoin later removed the bank issuer and redemption promise through a public proof-of-work ledger, but does not reproduce Chaumian payer privacy by default. [David Chaum — eCash archive] [David Chaum — Blind Signatures for Untraceable Payments] [European Commission — The story of DigiCash and eCash]
For the clearest picture, read this entry together with David Chaum, Chaumian eCash, Blind signature, Bitcoin Privacy, Double-spend, Bitcoin. The reverse links also lead from David Chaum.