Wei Dai's 1998 b-money proposal described proof-of-work currency creation, pseudonymous accounts, and decentralized contract enforcement — cited by name in the Bitcoin whitepaper. This profile covers b-money, what Satoshi took from it, the wei/Ethereum connection, and Dai's AI safety work.
The Bitcoin whitepaper cites only eight references. One of them is a 1998 proposal by a cryptographer named Wei Dai — a brief, visionary document describing a "scheme for a group of untraceable digital pseudonyms to pay each other with money and to enforce contracts amongst themselves without outside help."
That proposal was called b-money. It was never implemented. But it anticipated Bitcoin's core design principles — decentralized currency, proof of work, anonymous accounts, and contract enforcement without trusted third parties — nearly a decade before Satoshi Nakamoto published the Bitcoin whitepaper.
Wei Dai is an American computer scientist and cryptographer. He studied computer science at the University of Washington (the same school as Nick Szabo) and worked at Microsoft Research. He is the author of the Crypto++ cryptographic library — one of the most widely used open-source cryptography implementations, still maintained today.
Dai is a rare figure: technically prolific but publicly reticent. Unlike many cypherpunks who wrote manifestos and gave talks, Dai has maintained an extremely low profile. His total public writing is sparse — a handful of posts to the cypherpunks mailing list, the b-money proposal, and occasional comments on LessWrong (the rationalist community website).
He has never claimed any connection to Bitcoin beyond the b-money citation. He appears to have been genuinely surprised by its emergence.
In November 1998, Wei Dai published "b-money" on the cypherpunks mailing list. The document is only a few paragraphs long, but it contains remarkable prescience:
Key b-money ideas:
1. Money creation via computational work: "The creation of money: Anyone can create money by broadcasting the solution to a previously unsolved computational problem. The only conditions are that it must be easy to determine how much computing effort it took to solve the problem."
This is proof of work for monetary creation — precisely what Bitcoin uses. Dai described the concept two years after Adam Back's Hashcash (1996) and at the same time as Nick Szabo's Bit Gold.
2. Pseudonymous accounts: Participants identified by public keys, not real names. All transactions broadcast to the network and verifiable cryptographically. No central account registry.
3. Decentralized enforcement of contracts: Contracts executed by a collective of servers rather than any central authority, with cryptographic proofs and economic penalties for cheating.
4. Two protocols proposed: Dai outlined two versions — a simpler protocol requiring synchronous participation from all participants, and a more complex "server" protocol closer to what Bitcoin actually implemented.
The main unsolved problem in b-money: consensus. How do all participants agree on which transactions are valid when some actors might be dishonest or unavailable? Dai acknowledged this was an open problem but didn't solve it.
Satoshi Nakamoto contacted Wei Dai directly before publishing the Bitcoin whitepaper. In a 2008 email, Satoshi asked Dai for the publication date of b-money, wanting to properly cite it. The whitepaper cites b-money in its second sentence as one of the prior art precursors.
The specific ideas that connect b-money to Bitcoin:
What Bitcoin added that b-money lacked:
b-money described the destination. Bitcoin provided the mechanism to get there.
Wei Dai's most lasting impact on cryptocurrency may not be b-money but rather the wei — the smallest denomination of Ether (ETH). Ethereum's denominations are named after cryptographic pioneers:
Vitalik Buterin and the Ethereum founders chose to honor Dai by naming the base unit after him. Every Ethereum gas fee denominated in gwei is a quiet tribute to a cryptographer who never built a blockchain.
Wei Dai's most active public writing in recent years has been on LessWrong, the rationalist community, where he posts under his own name. His focus: existential risk from artificial intelligence.
Dai has written thoughtfully about alignment problems, the difficulty of specifying human values to AI systems, and why he believes AI risk is one of the most important problems of our era. He's identified as an AI safety researcher in disposition, though not affiliated with any major AI safety organization.
This is a fascinating contrast: a cryptographer whose work helped inspire Bitcoin — a technology many view as a hedge against institutional failure — who personally focuses more energy on preventing AI-driven civilizational failure. The intellectual threads are consistent: systems that operate without trusted third parties, and the enormous stakes of getting the design right.
Understanding b-money and Wei Dai's contribution matters for several reasons:
1. Bitcoin didn't emerge from nowhere. It built explicitly on a decade of cypherpunk research — Hashcash (Back, 1996), b-money (Dai, 1998), Bit Gold (Szabo, 1998), RPOW (Finney, 2004). Satoshi synthesized these ideas and solved the consensus problem that others had identified but not cracked.
2. The citation is a signal. Satoshi's choice to cite b-money in the whitepaper's opening sentences signals which prior work was most intellectually important. b-money and Hashcash are the two most direct ancestors of Bitcoin's design.
3. The cypherpunk lineage is real. Bitcoin's DNA includes decades of thought about privacy-preserving digital money. Wei Dai, along with Back, Szabo, and Finney, represents the intellectual tradition that made Bitcoin conceptually possible.
4. The wei honors the lineage. Ethereum's choice to name its base unit after Dai acknowledges that cryptocurrency history runs through him — whether or not he ever wrote a line of blockchain code.
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