Hal Finney: early Bitcoin, RPOW and the first test payment

Before Bitcoin: PGP, anonymous remailers and a money called RPOW

Hal Finney spent his career on one problem: how ordinary people could keep secrets and move value without asking permission. He got his start in cryptography working on an early version of PGP, the email encryption program, alongside its creator Phil Zimmermann, and when Zimmermann founded PGP Corporation Finney was one of the first hires. He ran the first cryptographically based anonymous remailer, a service that stripped identifying information from email before passing it on. He was, in short, a cypherpunk, part of the loose movement our cypherpunks explainer describes.

In 2004 he built something that looks, in hindsight, like a rehearsal. RPOW, for Reusable Proofs of Work, let a token created by computational work be passed from person to person, with a server verifying each transfer. To make the server trustworthy, it was designed to run on an IBM secure coprocessor that could prove which software it was executing. The archived RPOW pages describe it as a prototype for digital cash built on Nick Szabo’s idea of collectibles. It did not catch on, but it was proof-of-work money, working, five years before Bitcoin.

So when a stranger calling himself Satoshi Nakamoto announced a peer-to-peer cash system built on proof of work, Finney was one of a very small number of people equipped to understand it immediately. He was also, by his own account, the first to try it.

Finney recalled running Bitcoin alongside Satoshi

Finney told the story himself in a forum post in March 2013. When Satoshi announced the first release of the software, he wrote, “I grabbed it right away,” and he thought he was the first person besides Satoshi to run it. On 10 January 2009 he posted two words to Twitter from his account @halfin: “Running bitcoin.” It is now one of the most quoted messages in Bitcoin’s history, and the anniversary is marked every January.

He did more than run it. He mined blocks in the first days, “block 70-something” by his recollection, and he reported what he found. Alcor, the organization that later preserved his body, describes him as the very first debugger and contributor to Bitcoin’s code. He also received the first payment.

Block 170: ten coins, 275 bytes and no fee

The first bitcoin transaction between two people sits in block 170. The public record of it, readable by anyone through a block explorer, shows a transaction of 275 bytes that paid no fee. It spent a single 50-bitcoin input and split it two ways: 10 bitcoin to Finney and 40 back to the sender. The block’s timestamp is 12 January 2009 at 03:30 Coordinated Universal Time, which was the evening of 11 January in California, where Finney lived.

Finney described it without ceremony: Satoshi had sent “ten coins to me as a test.” Our wallet dossier on block 170 traces the coins and the keys involved, and the origins dossier puts the transaction in the sequence of Bitcoin’s first weeks.

It is worth pausing on how unremarkable that transaction is on its face. No fee, a round number, a test between two people who had never met. Everything that followed rests on the fact that it worked.

“Bitcoin and me”: his own account, written with his eyes

In August 2009, seven months after that first payment, Finney was diagnosed with ALS, the progressive nerve disease also called Lou Gehrig’s disease. Over the following years it paralyzed most of his body. He kept working anyway, programming with eye-tracking software. His March 2013 post, titled “Bitcoin and me,” was written that way, and it is the best first-person account of Bitcoin’s first days that exists.

He is careful in it. He says he thought he was dealing with a young man of Japanese ancestry, and he says that was an impression. He describes RPOW as his own earlier attempt at a proof-of-work currency. He describes the diagnosis plainly and the years since without self-pity. Anyone wondering who Satoshi Nakamoto is should read it before reading anything else.

Death in 2014, and a decision made twenty years earlier

Hal Finney died on 28 August 2014, aged 58. Local reporting in Santa Barbara described a five-year battle with ALS. The case record kept by the Alcor Life Extension Foundation gives the details: he was pronounced legally dead at 8:50 that morning in Scottsdale, Arizona, near Alcor’s facility, and the same day he became Alcor’s 128th patient.

Cryopreservation was not a late whim. Alcor records that he had held arrangements with it for more than twenty years, and that once ALS took his ability to communicate he chose to discontinue life support and proceed. Local reporting described the preservation as carried out per his wishes. Whatever one thinks of cryonics, it was consistent: a man who spent his life betting on technology made one last bet.

Why Hal Finney still matters

Finney is remembered for a transaction, but the transaction was the least of it. He had built proof-of-work money before Satoshi. He recalled running the first release, helped debug it, and wrote about it with a calm that the best of Bitcoin’s culture still tries to match: curious, technical, honest about uncertainty. His earlier essays on digital cash and privacy, written in the early 1990s, read today like a map of where Bitcoin came from.

Read Finney’s account alongside the transaction

Finney’s 2013 account supplies the human context: he described running the software and receiving a ten-bitcoin test payment from Satoshi. The transaction record supplies the technical evidence of the transfer. Use both when explaining the event, rather than expecting a block explorer to contain the participants’ names.

This distinction makes the history easier to verify. The ledger can be checked for its recorded transaction, while the claim about the people involved points to the dated firsthand account. Finney’s documented contribution is significant without treating his participation as evidence that he was Satoshi.