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Before bitcoin, could people buy things with online digital money, unlike cash?

Research question: Before bitcoin, did any online money systems let people buy goods with digital units, and how did those sales differ from a cash sale?

Yes, several pre-bitcoin online systems let buyers spend digital units on goods. Flooz.com let customers spend flooz at participating online stores 10, Beenz let users buy goods from online merchants with beenz 16, and Tencent's Q coin could buy its online virtual goods and services 11. The sales differed from cash in several ways. Each Beenz merchant set its own notional value for beenz, unlike a fixed-price cash sale 16, and Q coin prices varied by channel, with Tenpay purchases costing 95% of face value 15. An InternetCash purchase sent the customer to a separate payment page to enter a card number and PIN, unlike a cash sale 21. Flooz was designed as a merchant-focused currency and never gained wide acceptance, unlike cash, which is accepted nearly everywhere 1822, and when Flooz closed its unused credits became worthless, whereas cash keeps its value 26. The facts cover only a few systems, so the comparison is incomplete 10111213.

Checked 2026-10-18. Only documented and supported facts are used.
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Sources

[1] supported
In the first B-money protocol, money was created using a proof of work function.
"In the first protocol in the essay, the use of a proof of work function is recommended as a means of creating money."
B-money - Bitcoin Wiki
[2] supported
B-money transactions involved broadcasting to all participants who kept accounts of each other, allowing for contracts with arbitration and reparations for default.
"In B-Money, money is transferred by broadcasting the transaction to all participants, all of whom keep accounts of all others. Contracts can be made with possible reparation in case of default, with a third party agreeing to be the arbitrator."
B-money - Bitcoin Wiki
[3] documented
Adam Back created Hashcash, a counter-measure against denial of service attacks, in 2002.
"[59] A.Back,“Hashcash-adenialofservicecounter-measure,”2002."
Drawing the boundaries between Blockchain and Blockchain-like systems: A Comprehensive Survey on Distributed Ledger Technologies
[4] supported
The US government ruled e-gold guilty of money laundering and froze all balances in 2008, demonstrating that regulators opposed the existence of digital cash.
"The US government took notice. After a lengthy court case, a court ruled e-gold guilty of money laundering and retroactive violations of money transmitter laws. The founder was found criminally liable, and in 2008, all e-gold balances were frozen."
The Cypherpunks - balajis.com
[5] supported
Chaumian eCash relied on a single company for issuance and verification, which cypherpunks identified as a critical weakness that necessitated decentralization.
"The cypherpunks saw this failure and realized that Chaumian eCash had another weakness that had previously gone underappreciated: it relied on a single company. If digital cash were to flourish, it would have to grow beyond dependence on any central party."
The Cypherpunks - balajis.com
[6] supported
Wei Dai proposed a system called b-money in 1998 that allowed untraceable digital pseudonyms to pay each other and enforce contracts without outside help.
"In 1998, Dai helped to spark interest in cryptocurrencies with the publication of "b-money, an anonymous, distributed electronic cash system". In the paper, Dai outlines the basic properties of his proposed system: "...a scheme for a group of untraceable digital pseudonyms to pay each other with money and to enforce contracts amongst themselves without outside help"."
Wei Dai
[7] supported
The b-money system relied on collective bookkeeping and digital signatures to authenticate the exchange of funds, rather than a central authority.
"Exchange of funds is accomplished by collective bookkeeping and authenticated with digital signatures."
Wei Dai
[8] supported
In the b-money proposal, creating money required a specified amount of computational work, known as Proof of Work, which was verified by participants updating separate account records.
"Creating money requires a specified amount of computational work (aka Proof of work). The work done is verified by participants who update separate account records."
Wei Dai
[9] supported
The b-money system included mechanisms for contracts that provided for collateral and an agreed arbitrator, with parties broadcasting digital signatures based on public key cryptography.
"Contracts provide for collateral and an agreed arbitrator; parties broadcast their digital signatures based on public key cryptography."
Wei Dai
[10] supported
Flooz.com, which went online in 1999, let customers spend a company-specific digital currency called flooz at participating online stores.
"Flooz.com was a dot-com venture, now defunct, based in New York City that went online in February 1999."
Flooz.com
[11] supported
Tencent's Q coin could be used to buy Tencent's online virtual goods and value-added services, showing that digital units were already spent on online goods before bitcoin.
"Q币可以购买腾讯公司提供的网络虚拟商品,或者 增值服务 。"
Q币
[12] supported
Beenz let consumers earn a online currency by performing activities such as shopping online, and then spend those units with participating online merchants.
"beenz.com was a website [ 1 ] that allowed consumers to earn beenz, a type of online currency , for performing activities such as visiting a web site, shopping online , or logging on through an Internet service provider . The beenz e-currency could then be spent with participating online merchants."
Beenz.com
[13] supported
InternetCash sold pre-paid cards that stored cash value, and that e-currency could be spent with participating online merchants.
"The InternetCash e-currency could then be spent with participating online merchants."
InternetCash.com
[14] supported
Flooz credits were acquired either as free promotional bonuses from some internet businesses or bought directly from Flooz.com, then redeemed for merchandise at participating online stores.
"Users accumulated flooz credits either as a promotional bonus given away by some internet businesses or purchased directly from flooz.com which then could be redeemed for merchandise at a variety of participating online stores."
Flooz.com
[15] supported
Buying Q coins through the Tencent payment service Tenpay cost 95% of the face value, so the digital unit was priced differently depending on the channel, unlike a cash sale at a fixed price.
"但通过 财付通 充值是95折,通过其他代理商购买则可能更低。"
Q币
[16] supported
Beenz users could buy goods from online merchants with beenz, but each merchant set its own notional value for beenz, unlike a cash sale with a fixed currency price.
"Consumers were then able to use their beenz to purchase goods from online merchants. Each merchant was free to exchange beenz at any notional value they liked, the company assuming that the market would settle the exchange value of each beenz."
Beenz.com
[17] supported
Each InternetCash unit of cash was identified by a card number paired with a PIN chosen by the customer, rather than by a bank account or physical note.
"The cash consisted of an InternetCash number together with a customer-selected PIN."
InternetCash.com
[18] supported
Flooz was designed as a currency for internet merchants, similar in concept to airline frequent flyer programs or grocery store stamp books, rather than a general-purpose money like cash.
"the company attempted to establish a currency unique to Internet merchants, somewhat similar in concept to airline frequent flyer programs or grocery store stamp books."
Flooz.com
[19] supported
Within Tencent's QQ Game, Q coins could be exchanged for in-game currency and used as a trading currency for gambling-like activities.
"QQ游戏中可以利用Q币作为交易货币进行类似 赌博 的游戏活动。"
Q币
[20] supported
Beenz merchants could sell their beenz back to the company at a predefined rate, and the company earned its profit from the spread between buy and sell prices.
"Merchants were then able to sell beenz back to the company itself at a predefined exchange rate. The company made its margin on the spread between the sell and the buy price of beenz in the market."
Beenz.com
[21] supported
Unlike a cash sale, an online purchase required the merchant to send the customer to a separate InternetCash payment page, where the customer typed in the card number and PIN.
"Therefore, InternetCash required merchants to redirect the customer to a new web page, which was operated by InternetCash and was called the "InternetCash payment window", where they would type in their card number and PIN."
InternetCash.com
[22] supported
Flooz never gained wide acceptance as a medium of exchange, which limited both its usefulness and its appeal, unlike cash that is accepted nearly everywhere.
"Adoption of flooz by both merchants and customers proved limited, and it never established itself as a widely recognized medium of exchange , which hindered both its usefulness and appeal."
Flooz.com
[23] supported
After fourteen Chinese government ministries banned the resale of virtual currency, Tencent closed the exchange between game coins and Q coins.
"2007年3月,中國政府14個部委下文严禁倒卖虚拟货币后,腾讯公司关闭了这个兑换。"
Q币
[24] supported
Companies bought beenz from Beenz at a locally determined exchange rate and then awarded them to consumers for actions such as online purchases.
"Companies purchased beenz from the company at a locally determined exchange rate. They could then award these to consumers for actions to which the issuer attached value, such as making online purchases."
Beenz.com
[25] supported
InternetCash card numbers carried a digital signature based on keyed hash functions, so third parties could not randomly generate valid numbers, a protection typical credit and debit card numbers lacked.
"The card numbers themselves included a digital signature based on keyed hash functions , thus preventing third parties from randomly generating a card number—a form of security not present in typical credit or debit card numbers."
InternetCash.com
[26] supported
When Flooz.com closed, all unused flooz credits became worthless and nonrefundable, so customers lost their stored value, which differs from cash that keeps its value.
"Upon the company's closing, all unused flooz credits became worthless and nonrefundable."
Flooz.com
[27] supported
Q coins could be bought through a fixed-line telephone, with the charge added to the phone bill, which led to many cases of minors illegally buying large amounts using other people's phones.
"Q币可以通过 固定电话 进行购买,其费用计入固定电话费,因此出现了多起利用他人电话非法购买大量Q币的事件,且多为 未成年人 。"
Q币
[28] supported
Minting new InternetCash required a quorum of authorized company officers to be present, using secret sharing techniques.
"InternetCash card generation used secret sharing techniques, requiring a quorum of authorized company Officers present when the cash was minted."
InternetCash.com
[29] supported
In China, virtual currency such as Tencent's Q coin was commonly used to buy online virtual services, such as QQ membership features and in-game equipment.
"虚拟货币通常用于用户购买网络上的虚拟服务,例如腾讯公司Q币的 QQ 会员功能、網路遊戲的裝備等。"
虚拟货币
[30] supported
Two-way virtual currencies, such as Second Life's Linden dollar, had buy and sell prices like real money and could be exchanged in both directions.
"雙向兌換,有買入價和賣出價,跟「真」貨幣相同,包括由發行機構發行的,如 第二人生 的林登幣"
虚拟货币