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Crypto Characters: Hal Finney Was the Original Cypherpunk

Those of you who are on the hunt for one of the most mysterious characters of our century, Satoshi Nakamoto, probably know very well who Hal Finney is: a cryptographer, computer scientist, contributor to bitcoin and the very first person Satoshi sent his newly-invented digital currency.

Hal Finney was one of the early adopters of Bitcoin

Being a subscriber to the cypherpunks’ mailing list, Hal Finney downloaded the bitcoin software on Jan.9, 2009, the day it was announced, and a week later received 10 bitcoins from Nakamoto himself – to test the software.

This first transaction touched off numerous rumors, and even though both cryptographers were actively corresponding, some people in the community believe that Finney might have been bitcoin’s creator.

There are various arguments in favor of and against this theory, but here’s one interesting thing that happens in the life of every Satoshi-hunter:

Once you get through this who-is-Satoshi phase, you realize that there were a few more interesting cypherpunks surrounding him, and without their contributions, bitcoin would have never happened.

Hal Finney was one of those cypherpunks.

From Punch Cards to Blockchain

Have you noticed that a lot of people who tremendously impacted the world of technologies had early access to computers?

When Bill Gates was 13, a Seattle computer company offered to provide computer time for the students of Lakeside School, the one Gates was attending. The year was 1968. Steve Jobs saw his first computer in 1967 at the age of 12 when he joined the Hewlett-Packard Explorer Club.

As for Hal Finney, he was introduced to his first PC early, too. He attended a high school in Arcadia, California, in the early 70s, and this school happened to have some early machines.

Hal started learning all about programming there, in particular about storing data on hard rectangular perforated cards.

His classmates often saw him walking down the corridors with a bunch of those perforated cards in his hand.

Attending Caltech, Discussing Philosophy

Hal Finney was a third child in the family of five, his mother was a housewife, his father was working for Union Oil of California for quite a long time, and they had to move a lot. But no matter where they lived, Hal was always into learning, reading and philosophical debates; his hobbies took the form of a discussion club later in college.

While attending Caltech, Finney gathered large audiences to engage in conversations on philosophy, politics and programming; college is also the place where he met his future wife, Fran.

Bitcoin’s Early Days

Although he never had a passion for developing games, after graduation from Caltech, Finney spent some time developing Adventures of Tron, Armor Ambush, Astroblast and Space Attack for Mattel, an American multinational toy manufacturing company founded in 1945 with headquarters in El Segundo, California.

During the early 1990s, he became involved with the cypherpunk’s mailing list and started posting there himself. He launched the first cryptographic-based anonymous re-mailer and helped Phil Zimmerman to develop the encryption program called Pretty Good Privacy (PGP) that has later become the most popular e-mail encryption software in the world.

Initially, he wrote code for free, but Zimmerman got financial support and promoted Hal to senior software engineer at his newly-founded company later.

That being said, Finney had always been a cryptographic activist. He created the first reusable proof of work system (RPoW) before bitcoin in 2004.

It was based on Hashcash, the work of another cypherpunk Adam Beck and, in principle, was a foundation for Satoshi’s proof-of-work algorithm.

Corresponding with Satoshi Nakamoto

In January 2009 Hal started corresponding with bitcoin’s inventor in an attempt to run the software on his side:

>Hi Satoshi – I tried running bitcoin.exe from the 0.1.0 package, and >it crashed. I am running on an up to date version of XP, SP3. The >debug.log output is attached. There was also a file db.log but it was >empty.

Together with Satoshi, they managed to start the process, and he famously tweeted: “running bitcoin”.

In his message to the bitcoin Forum on March 19, 2013, Finney wrote:

“When Satoshi announced the first release of the software, I immediately grabbed on to it. I think I was the first Bitcoin user since Satoshi. We talked to Satoshi by e-mail, and when he sent me 10 coins as a test, I was the recipient of the first Bitcoin transaction.”

“Today, Satoshi’s true identity has become a mystery. But at that time I thought I was dealing with a very intelligent and sincere young man of Japanese origin. I was lucky to know a lot of wonderful people throughout my life, so I pay attention to the signs of destiny” … “A few days later Bitcoin was working quite steadily, and I left him alone. Those were the days when the difficulty was one, and you could find blocks with the CPU without even using the GPU. Over the next few days, I got a few blocks, but I decided to unplug because my desktop PC (IBM) was overheating, and I was worried about the fan noise. In retrospect, I regret that I didn’t keep up the good work, but on the other hand, I was extremely lucky to be at the very source. This is one of those examples of a half full and half empty glass.”

Reintroduced to Bitcoin in 2010

When the network started running steadily, Finney stopped mining. Next time, he heard of bitcoin in late 2010. To his surprise, the payment system was not only still going but bitcoins had monetary value. The price climbed up to real money.

As he says, he dusted off his old wallet, discovering with a relief that his bitcoins were still there, and, then, he sent them to an offline wallet hoping that someday they would be something to his heirs.

He already knew that he was ill, so he started preparing for what his future had in store for him. Finney put bitcoins into the family’s safe deposit for his tech-savvy son and daughter to access them in time.

Fiercely Optimistic Despite ALS Diagnosis

Hal Finney died, on August, 2014, at the age of 58, as a result of ALS, a progressive degenerative disease that paralized his body functions.

But Hal had always been very strong, physically and emotionally, he used to run marathons and the horrible diagnosis didn’t break him. Here is the excerpt from the post he wrote a little over a year before he died:

“Today, I am essentially paralyzed. I am fed through a tube, and my breathing is assisted through another tube. I operate the computer using a commercial eyetracker system. It also has a speech synthesizer, so this is my voice now. I spend all day in my power wheelchair. I worked up an interface using an arduino so that I can adjust my wheelchair’s position using my eyes.

It has been an adjustment, but my life is not too bad. I can still read, listen to music, and watch TV and movies. I recently discovered that I can even write code. It’s very slow, probably 50 times slower than I was before. But I still love programming and it gives me goals. Currently I’m working on something Mike Hearn suggested, using the security features of modern processors, designed to support “Trusted Computing”, to harden Bitcoin wallets. It’s almost ready to release. I just have to do the documentation.”

In fact, Hal Finney was a very optimistic person, he believed in the future advancement of the technologies, and his faith was strong. He was cryopreserved by the Alcor Life Extension Foundation after he died, and he had cryopreservation arrangements with the Alcor Foundation for over 20 years.

One thing’s for certain, Hal’s contributions to cryptocurrency will never be forgotten.

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Julia Gerstein

About the Author

Julia Gerstein

Julia Gerstein graduated from The Peoples’ Friendship University of Russia as a Bachelor of Arts in Journalism. She had been working as a reporter at a major news agency RIA Novosti and for The Rolling Stone Magazine before she got interested in Blockchain & Crypto. For the past three years, she has been covering news, creating analytical & educational blog posts and writing about fellow cryptonians. Julia's mission is to help readers find what they need, understand what they find and use what they understand appropriately.