Sixteen years ago today Hal Finney got first ever Bitcoin transaction. The 10-coin receipt from Satoshi Nakamoto was a simple process and just “a test,” but it marked another early leap of faith that helped spark the Bitcoin revolution and cemented Finney’s place in Bitcoin history.
Then Bitcoin transaction register are public and immutable, you can still find record of this historical transaction on any blockchain explorer.
Finney, already well-known as a cryptography activist and one of the inventors of PGP, created the first “reusable proof-of-work” system for digital tokens in 2004. Requiring machines to validate data transactions by performing complex computational tasks would later become the backbone of Bitcoin’s consensus mechanism.
Finney may have made an even greater contribution to the development of Bitcoin, but just months after the first transaction, he was diagnosed with amyotrophic lateral sclerosis (ALS) and stepped back from his Bitcoin work. The disease would slowly take away his physical abilities over the next five years. His mind remained very active, and in 2013 he wrote the equally legendary forum post “Bitcoin and me” (when Bitcoin became a frequent media topic). It details his early thoughts while remaining characteristically humble about his role. Hal Finney passed away in August 2014, aged 58.
Hal Finney’s other significant contribution to Bitcoin
In addition to getting the first ever transaction on the Bitcoin network, Finney is also legendary in Bitcoin lore for being the first person to respond positively to the Bitcoin concept. The canonical first mention of Bitcoin is a post by Satoshi Nakamoto on the Cryptography Mailing List in October 2008, announcing the publication of the Bitcoin White paper.
The first three respondents were curious about the idea, but doubted that it could work:
“We really need such a system, but as I understand your proposal, it doesn’t seem to scale to the required size.” -James Donald
“The good guys are far less calculating than the bad guys. I have my doubts about other issues too, but this one is the killer.” -John Levine
“I think the real problem with this system is the market for bitcoins. Calculating proof of work has no intrinsic value.” – Ray Dillinger
It’s worth noting that these were, and still are, valid concerns in Donald’s case. The scaling issue in particular would continue to haunt Bitcoin and has only been resolved by the BSV development team after years of hard work, bitter public spats and, eventually, two hard forks that split the network into warring tribes. A popular complaint among all Bitcoiners is to imagine how much more useful Bitcoin could have become over the past 16 years if so much energy hadn’t been wasted on arguments over Bitcoin’s structure.
Even if these arguments continue, Bitcoin still at least has the potential to change the world (rather than just the fiat-denominated bank balances of its big bag holders).
Anyway, back to Hal
The fourth response from the Finney mailing list began with “Bitcoin seems like a very promising idea.” While he had several questions about aspects of the system that he did not yet understand, the white paper piqued his interest enough to get involved a few months later.
“Sorry for all the questions, but as I said, this seems like a very promising and original idea, and I look forward to seeing how the concept develops further.”
On January 11, 2009, following Satoshi’s public release of v0.1 of the Bitcoin protocol software, Finney posted what has become Bitcoin’s most famous tweet:
“I’ve noticed that cryptographic graybeards (I was in my mid-50s) tend to get cynical,” he wrote of initial reactions a few years later. “I was more idealistic; I have always loved crypto, the mystery and paradox of it.”
He continued to help Satoshi in the early days by providing advice, reporting bugs, and contributing code. These contributions, as well as his first vote of confidence, have made him one of the most revered figures in the Bitcoin world. While not Satoshi himself, he is the first publicly identifiable individual associated with Bitcoin – at least that everyone can agree on.
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