Throwback Stories #7: Bitcoin Godfather

Dominik Olech
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The cryptocurrency history is full of strong personalities, who have been reshaping the industry since the very beginning. But none of them contributed to the creation of Bitcoin as much as Hal Finney – yet his work is still underrated in the eyes of the crypto world.

In previous Throwback Stories, we mentioned about the person who had created the reusable proof of work system for the first time, before an actual Bitcoin invention. This week, we are taking a closer look at him – because, without Hal Finney’s work, the cryptocurrency industry might would never truly develop.

By day a programmer…

The history of Harold Thomas Finney bears similarities to the many prominent people from Silicon Valley. He was born in California, and thus there he attended the California Institute of Technology (commonly referenced as Caltech), graduating in 1979 with a Bachelor of Science degree in engineering. This set his course toward computer science for the rest of his life.

Finney was related to computer work from the very beginning of his career after graduating from Caltech. However, his first steps differed much more from his later cryptographic work, which made him famous in the future. He began working as a designer in Matell’s division focused on video game production. We’re talking about nineteen-eighties, so Finney’s works contributed to the development of this now-thriving industry. Yet, his name isn’t known for that reason.

Eventually, Finney left the video game sector and began to work on the Pretty Good Privacy project. The PGP was intended to provide encrypted communication for commercial usage. Soon, he became one of the most significant figures of the project. According to Phil Zimmermann, a main designer of PGP, Finney was gregarious, sociable, which was quite unusual in the programming world during that time. However, he decided to keep a low profile since the PGP was targeted by the US government because of accusations of trading military-grade encryption software. 

Later on, when the American investigation didn’t show anything, and the PGP transformed into the company, Hal Finney officially became one of its employees. He stayed there until his retirement in 2011. Staying for so long in one company is remarkable, especially from the perspective of the current market habits, when we usually change our workplace once in a few years. 

… by night a cypherpunk

His work on the PGP was probably the reason why Finney became interested in the concept of decentralized cryptographic money. Since the early ’90, he was involved in the cypherpunk movement (do not confuse with the highly anticipated art style cyberpunk). Those cryptography enthusiasts were devoted to popularizing the idea of privacy-enhancing technologies to initiate social and political changes.

Bear in mind that we are talking about the last decade of the 20th century when the Internet was still young. Yet, the interest in it was significantly growing, initiating the future dot-com bubble. Nevertheless, enthusiasts of this new technology were thrilled about the possible implementations and how they could change the world. However, the communication between them wasn’t so smooth like today, because of the absence of social media or high-scale forums like Reddit. 

That’s why Finney and his fellow cypherpunks had to rely on good, old emails. Their communication was facilitated by the so-called listserv, a software application allowing them to send messages to the addresses of the subscriber’s list. Finney was also dedicated to the idea of anonymous remailers, which was the way of forwarding encrypted messages through further email accounts. It was a more sophisticated form of communication suitable for the movement of cypherpunks. The idea also bears some similarities to the future peer-to-peer and blockchain solutions, making cypherpunks pioneers on that matter.

First in the crypto run

Finney’s interest in the cryptography had eventually led him to attempt to develop functional, decentralized money. From the beginning of his career as a cryptographer, he devoted himself to providing solutions free from the government’s invigilance. In Pretty Good Privacy, the stake was the anonymity of communication. Cryptographic money would be the next step. 

If you have read our last Throwback Stories episode, you know that one of his attempts was eventually successful. In 2004, Hal Finney developed a reusable proof-of-work. Tokens in his decentralized system were exchangeable, which differs them from the previous efforts to create a similar solution. However, his invention never went from the stage of a working prototype and remained only a technological curiosity for a still relatively small cypherpunk community.

And no wonder, because Finney presented his works shortly after the dot-com crash. It was a time when people still didn’t regain faith in Internet-related innovations. The other reason why this Bitcoin progenitor wasn’t successful might also be related to the lack of actual publicity since Finney didn’t look for it. He was content with the technological accomplishment itself.

Initial supporter

A few years passed, and when the Satoshi Nakamoto announced his project in 2008, Finney was one of the first among Bitcoin supporters. Even though some other cypherpunks were reluctant toward the first cryptocurrency, Hal immediately noticed its potential. Soon, he received the first transaction from Satoshi – historical 10 bitcoins.

Soon, he became an active member of the growing community of crypto enthusiasts, actively participating in the development of Bitcoin. The first cryptocurrency held many similarities to his previous works, both in the development of PGP, and his own approaches to the subject. It caused the speculations that Hal Finney might actually stand behind the project. The fact that he had lived for 10 years near the other computer engineer named Dorian Satoshi Nakamoto only fueled those theories.

Crypto pioneer with a heart of gold

Of course, Finney denied those rumors. And if he really was the Satoshi, after all, we probably will never learn the answer. In October 2009, he announced on his private blog that he is struggling with amyotrophic lateral sclerosis – a disease causing the death of neurons controlling muscles. It leads to a slow loss of control over the body and, in consequence, death. This same disease led to the end of the famous scientist Stephen Hawking a few years ago.

It’s sad that alongside the growing popularity of Bitcoin, the disease was slowly killing its leading supporter. What’s more shocking, during his last years, Finney faced some unpleasant actions related to his cryptocurrency history. At first, he was receiving anonymous calls demanding an extortion fee of 1,000 bitcoin. When he refused to pay it, he eventually felt the victim of the extremely malicious hoax known as “swatting.” His persecutor made a false emergency call to Finney’s home, causing a SWAT intervention. Paralyzed cypherpunk was pulled out of his own apartment, which in his condition was very dangerous.

Hal Finney died on August 28, 2014, at the age of 58. His body was immediately cryopreserved by the Alcor Life Extension Foundation, just as he asked before he died. He never revealed any more secretes about Bitcoin’s origins. And even if Finney was a real Satoshi Nakamoto, we should respect his will and not inquire about the truth. He will be remembered, though, as an essential figure in the crypto world. Hal Finney was genuinely devoted to the pure idea of decentralized money, which is remarkable in the contrast of profit-driven crypto entrepreneurs of last years.

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