Block 170: Hal Finney and the First Bitcoin Payment Between Two People

Hal Finney was already a known quantity in cryptography long before Bitcoin. Born 4 May 1956 in Coalinga, California, he worked for PGP Corporation and in 2004 built the first reusable proof-of-work system, RPOW — a direct conceptual ancestor of what Satoshi Nakamoto would ship five years later. On 10 January 2009, from the account @halfin, he posted two words: "Running bitcoin."

What happened next is recorded permanently. Transaction f4184fc596403b9d638783cf57adfe4c75c605f6356fbc91338530e9831e9e16 confirmed in block 170 (00000000d1145790a8694403d4063f323d499e655c83426834d4ce2f8dd4a2ee), timestamped 1231731025 — 12 January 2009 at 03:30:25 UTC, which in California was the evening of 11 January. It is the first non-coinbase transaction in the blockchain: no earlier transfer between parties exists on the chain. The transaction is 275 bytes and paid no fee. Its single input is the coinbase of block 9 (txid 0437cd7f8525ceed2324359c2d0ba26006d92d856a9c20fa0241106ee5a597c9, timestamped 9 January 2009 at 03:54:39 UTC), worth 5,000,000,000 satoshis. It produced two pay-to-public-key outputs: 1,000,000,000 satoshis — 10 BTC — to the key rendering as 1Q2TWHE3GMdB6BZKafqwxXtWAWgFt5Jvm3, and 4,000,000,000 satoshis back to 12cbQLTFMXRnSzktFkuoG3eHoMeFtpTu3S, the same key that had received the block 9 coinbase three days earlier. Block 170 contained two transactions in 490 bytes, at difficulty 1.

Finney gave his own account in "Bitcoin and me", posted to the Bitcointalk forum on 19 March 2013. "When Satoshi announced the first release of the software, I grabbed it right away. I think I was the first person besides Satoshi to run bitcoin," he wrote, and: "I was the recipient of the first bitcoin transaction, when Satoshi sent ten coins to me as a test." He mined too — "I mined block 70-something" — in an era when difficulty was 1 and blocks could be found with a CPU. His reason for stopping is one of the most quoted lines in Bitcoin's history: "I turned it off because it made my computer run hot, and the fan noise bothered me."

The same post carries the other half of the story. "In August, 2009, I was given the diagnosis of ALS, also called Lou Gehrig's disease," he wrote — seven months after block 170. "Fatigue and voice problems forced me to retire in early 2011." By March 2013 he could write: "Today, I am essentially paralyzed."

In March 2014 Finney showed Forbes reporter Andy Greenberg his Gmail archive: roughly fifteen exchanges with Satoshi Nakamoto during January 2009, mostly Finney reporting bugs and Nakamoto shipping fixes. Forbes commissioned the stylometry firm Juola & Associates, whose chief scientist John Noecker called Finney the best Nakamoto candidate the firm had analysed; shown the January 2009 emails, the firm found they matched the whitepaper's style more closely than Finney's own writing did. Greenberg's article concluded that Finney was not Bitcoin's creator. Finney told him he had mined roughly a thousand bitcoins on an IBM Windows desktop and later sold most of them at around $100 each to meet medical costs.

He died on 28 August 2014 in Phoenix, Arizona, of complications from ALS, and was cryopreserved by the Alcor Life Extension Foundation. In 2021 his wife Fran Finney launched the Running Bitcoin Challenge, an annual event around the anniversary of the tweet, raising funds for the Golden West Chapter of the ALS Association, now known as ALS Network.