In the late '80s and early '90s electronic cash was a hot topic among cryptographers. People such as David Chaum published extensively in journals such as Springer's Advances in Cryptology. Staff at the US National Security Agency (NSA) were naturally interested in developments in cryptography, so on 18th June 1996 the NSA's Laurie Law, Susan Sabett and Jerry Solinas reviewed the academic literature on electronic cash and published HOW TO MAKE A MINT: THE CRYPTOGRAPHY OF ANONYMOUS ELECTRONIC CASH :This report has surveyed the academic literature for cryptographic techniques for implementing secure electronic cash systems. Several innovative payment schemes providing user anonymity and payment untraceability have been found. Although no particular payment system has been thoroughly analyzed, the cryptography itself appears to be sound and to deliver the promised anonymity.Alas, this understandable effort by NSA staff has become the keystone in a bizarre theory that Satoshi Nakamoto is an alias for the NSA, who developed Bitcoin in secrecy as a "monetary bioweapon" a decade before it somehow leaked and infected the world.
These schemes are far less satisfactory, however, from a law enforcement point of view. In particular, the dangers of money laundering and counterfeiting are potentially far more serious than with paper cash. These problems exist in any electronic payment system, but they are made much worse by the presence of anonymity.
I must apologize that, below the fold, I devote an entire post to this conspiracy theory.
