Before Bitcoin, e-gold emerged in the late '90s as a notable digital currency, peaking in 2006 with a transaction volume of $2 billion. Users could convert fiat currency into digital grams of gold, stored and backed by a private company. These funds allowed quick, pseudonymous transactions without identity checks, making e-gold popular among internet users. However, this centralization led to its downfall; U.S. authorities declared it a money transmitter, and its limited decentralization meant it was vulnerable to shutdown. E-gold unraveled due to its operational control by a few individuals, highlighting the risks associated with a centralized digital currency model. Bitcoin, introduced shortly after the e-gold era, resolved these centralization issues by creating a decentralized network, marking a pivotal shift in digital currency development.

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