Hal Finney

Hal Finney (1956–2014) was an American computer scientist and cryptographer who played a central part in the early history of Bitcoin. A long-time member of the cypherpunk movement and one of the early developers of the PGP encryption software, he was among the first people to respond to Bitcoin's design, the first besides its creator to run the software, and the recipient of the first bitcoin transaction between two people, in January 2009.

Before Bitcoin, Finney had built his own system for digital tokens, known as reusable proofs of work, which drew on earlier ideas such as Adam Back's Hashcash. He worked closely with Satoshi Nakamoto in Bitcoin's first weeks, reporting bugs and testing the code. Diagnosed with the neurodegenerative disease ALS in 2009, he continued programming as his condition worsened, and died in August 2014.

When Bitcoin was first released, almost nobody was paying attention. Hal Finney was one of the very few experienced engineers who took it seriously from day one. He downloaded the program, helped find problems in it and became the first person to receive bitcoin from its mysterious inventor.

He was already well known in computer security circles for his work on tools that let ordinary people encrypt their emails. Many in the crypto world remember him as a bridge between the privacy activists of the 1990s and the digital currency movement that followed.

Harold Thomas Finney II was born in 1956 and grew up in California. He studied engineering at the California Institute of Technology, graduating in 1979, and worked for some years in the video game industry. In the early 1990s he became one of the first employees working with Phil Zimmermann on PGP, short for Pretty Good Privacy, a program that made strong encryption available to the public. Finney contributed to its development for many years and later worked for the company that sold commercial versions of it.

He was an active member of the cypherpunk mailing list, where programmers and activists discussed privacy, anonymous digital cash and the social effects of cryptography. He also ran one of the early anonymous remailers, services that let people send email without revealing their identity.

In 2004 Finney published a system called reusable proofs of work (RPOW). It allowed someone to create a token by doing computational work, similar to Hashcash, and then pass it to others, with a server checking that each token was spent only once. The server's code could be checked by users through secure hardware, reducing the need to trust its operator. RPOW was not widely adopted, but it was an important step towards digital money based on proof of work, and it showed how hard it was to avoid the double-spending problem without a central party.

When Satoshi Nakamoto announced the Bitcoin whitepaper on a cryptography mailing list in late 2008, Finney was one of the few readers to respond positively. After the software was released in January 2009, he ran it within days and wrote a public message saying he was "running bitcoin". On 12 January 2009, Nakamoto sent him 10 bitcoins in block 170, the first transaction from one person to another on the Bitcoin blockchain after the genesis block.

In the following weeks Finney exchanged emails with Nakamoto, reported bugs and helped improve the code. He later wrote about his early mining, noting that he had stopped running his computer because of the noise and heat. He also described an attack in which a miner could double-spend by pre-mining a block, a scenario later named the Finney attack.

In 2009 Finney was diagnosed with amyotrophic lateral sclerosis (ALS). As the disease progressed, he used eye-tracking equipment to keep writing software, including work on Bitcoin wallet security. He and his wife, Fran, also raised money for ALS research. Finney died on 28 August 2014, aged 58. In line with his wishes, his body was cryopreserved by a life extension foundation.

Because of his skills, his early involvement and the fact that he lived near a man named Dorian Nakamoto, who was wrongly named as Bitcoin's creator in 2014, some have speculated that Finney was Satoshi Nakamoto. Finney denied it. Researchers have pointed to evidence against the idea, including his public email exchanges with Nakamoto and records of his activities at times when Nakamoto was posting online. The identity of Bitcoin's creator remains unknown, a question also discussed under Dorian Nakamoto and Adam Back.

Finney is remembered as one of Bitcoin's first supporters and as a link between earlier experiments in digital cash and the system that succeeded. His writing on the cypherpunk list and on Bitcoin forums is still widely cited, and his early transaction with Nakamoto is regarded as a landmark in the history of Bitcoin and of digital money.