There are many speculations that Hal Finney is the person, or one of the persons, behind the pseudonym Satoshi Nakamoto. Although he has always denied being Satoshi, the suspicions are not far-fetched. So, exactly who was Hal Finney?
Hal Finney was a computer scientist and a cryptographer, On January 12, 2009, Hal was the first to receive a blockchain-logged Bitcoin transaction from Satoshi Nakamoto. Coincidentally, he lived in the same town as him, Temple City, California.
The mystery of Satoshi Nakamoto's true identity remains unsolved, leaving us all eager for more clarification. The answer may not be as crucial as we think, as the current holders of the Bitcoin network have as much power as any of us. There are many speculations that Hal Finney is the person, or one of the persons, behind the pseudonym Satoshi Nakamoto. Although he has always denied being Satoshi, the suspicions are not far-fetched.
In this article, our experts at Plasbit will delve deeper into the matter and try to explore Hal Finney’s role in the early days of Bitcoin and the developments of this now world-famous digital currency.
Hal Finney's Early Life and Projects He Worked On
Hal Finney was born in Coalinga, California, on the 4th of May, 1956. His parents were Virginia and Harold Thomas Finney, with Harold being a petroleum engineer. Hal graduated from Caltech and went on to work in the field of computer gaming for a company that developed computer games, such as Adventures of Tron, Astrosmash, Space Attack, and Armor Ambush. After that, he started to work for the PGP Corporation and became a noted cryptographic activist.
When someone on the Cypherpunks mailing list wrote about Phil Zimmermann and PGP, Hal Finney was the first to respond positively. He contacted Zimmerman and became the first employee of PGP Corporation until his retirement in 2011. Additionally, Hal Finney worked a lot on what is called Reusable Proof of Work (RPOW) systems. However, shortly after, Satoshi retired from Bitcoin.
What is Reusable Proof of Work (RPOW)?
In an RPOW system, proof of work (POW) tokens can be reused. A normal Proof-of-Work token takes a long while for a computer to solve.
In a traditional sense, Proof-of-Work tokens cannot be reused because that would allow users to double-spend them. However, Reusable Proof of Work systems allow for a limited form of reuse, also called sequential reuse.
This new form of Proof of Work allows any POW token to be used once, then exchanged for a new one, which can again be used once, then once more exchanged, etc. This newly developed approach makes POW tokens more practical for many purposes. It allows the effective cost of a POW token to be raised while still allowing systems to use it very effectively.
This functionality is undoubtedly useful, but the most prominent feature of RPOW systems is their approach to security, which allows users worldwide to verify their correctness and integrity in real-time.
Additionally, Finney was heavily involved in the development of the first anonymous remailer, a cryptographic tool for sending emails across the globe with the sender's identity remaining fully concealed.
Why Finney Would Keep His Involvement with Bitcoin Secret
Finney contributed a lot to the PGP protocol but was, therefore, aware of Zimmerman's problems with the American government. It is not surprising that if Finney were the inventor of Bitcoin, he would have preferred to keep this a secret.
When the first version of the Bitcoin code was completed, and the program was ready for testing, Hal received it. On January 10, 2009, he downloaded the code and connected to the Bitcoin network. His computer was the first to connect to Satoshi's network.
Two days later, Hal received ten bitcoins from Satoshi Nakamoto. It was the first Bitcoin transaction between two computers. That doesn't mean Finney is Satoshi, but it's understandable for people to make that connection.
However, that cannot be the case, as Satoshi later admitted that the Bitcoin network had run entirely on Finney's computer for a while because Satoshi was having problems with his own connection.
Hal Finney undoubtedly played an important role in the early stages of Bitcoin, contributing to the development process for many years and being part of the Bitcoin community, and if Finney were the inventor of Bitcoin, then he would have drawn inspiration from his own environment, quite literally because computer scientist Dorian Nakamoto lived just a few miles away.
How coincidental, both lived in Temple City, a town with less than 36,000 inhabitants.
What was not yet known in the community at the time was that Hal Finney suffered from the muscle disease Amyotrophic Lateral Sclerosis (ALS). Finney was a runner and in great condition but was told at the time of his diagnosis in 2009 that his life expectancy was limited.
In 2013, he posted a moving farewell message on the Bitcointalk forum, where he shared his story. The disease had already progressed so far that he was almost completely paralyzed.
"Today, I am essentially paralyzed. I am fed through a tube, and my breathing is assisted through another tube. I use the computer through a commercial eye tracker system. It also has a synthesizer for a voice, so this is now my voice. I sit in my electric wheelchair all day. I created an interface using an Arduino so I can adjust the position of my wheelchair using my eyes." - Hal Finney, farewell message on the Bitcointalk forum.
Hal Finney continued to work on Bitcoin, PGP, his anonymous remailer system, and a program called bcflick, which utilized Trusted Computing to increase the level of security of Bitcoin wallets until his death.
What are some core reasons Hal Finney Cannot be Satoshi Nakamoto?
According to Jameson Lopp, Hal Finney cannot be Satoshi Nakamoto because Hal couldn't be at the computer when Satoshi's first and most crucial emails were sent. At the time, Finney was participating in a 10-mile race through Santa Barbara, California.
A race that took Hal Finney 87 minutes. The starting gun was shot by the referee at 8:00 am. During this morning, Satoshi had several email conversations with several people. He also had contact with early Bitcoin developer Mike Hearn.
At 9:16 a.m., two minutes before Hal Finney crossed the finish line of the race mentioned above, Satoshi Nakamoto signed an email to Hearn. Now, you might think that someone like Satoshi Nakamoto would have enough IT knowledge to pre-program sending an email. But Satoshi Nakamoto not only sent emails that morning, he also made a Bitcoin transaction.
So, at 8:55 AM, a transaction of 32.5 BTC took place from Satoshi Nakamoto to Mike Hearn, fixed for eternity at block level 11,408. A transaction that Satoshi Nakamoto later confirmed via email.
Hal’s Final Years
In his final years, Finney was repeatedly extorted for 1,000 Bitcoin and became the victim of swatting. In this hoax, perpetrators call up emergency dispatch units using spoofed telephone numbers, pretending to have committed a serious crime in the hope of provoking an armed police response to his house.
Eventually, the extortionists demanded more Bitcoins from Finney than he had left to cover his medical expenses in 2013.
Hal Finney died on August 28, 2014. The Alcor Life Extension Foundation subsequently froze his body in the hope that medical science would be able to bring him back and heal him in the future. "He has always been optimistic about the future," his wife, Fran Finney, said at the time. He embraced every new advancement, every new technology. Hal embraced life, and he made the best of everything."
If we had to answer the question who was Hal Finney? We can surely say he was one of the greatest contributors to Bitcoin, digital privacy, and anonymous transactions our world has ever seen.
The Mystery Surrounding Hal Finney and Satoshi Nakamoto
The greatest mystery since sliced bread is not how Bitcoin works but who its creator is. On October 31, 2008, an anonymous person named Satoshi Nakamoto published a white paper on a cryptography mailing list called the Cypherpunk Movement. That event changed the history of money and will shake the world even further.
But there is certainly a reason why Satoshi wants to remain anonymous. For example, look at Phil Zimmermann's story. He developed PGP. With PGP, you can communicate with other parties without the government or anyone else being able to listen in.
Zimmermann on his motivation:
“The right to privacy is kind of stated in the Bill of Rights. However, when the U.S. Constitution was drafted, the founding fathers saw no need to spell out the right to a private conversation explicitly.
That would have been crazy. Two hundred years ago, all conversations were private. If anyone else was within earshot, you could stand behind the shed and have your conversation there. No one could listen without your knowledge.
The right to private conversation was a natural right, not just in a philosophical sense, but in a physical sense, given the technology of the time.”
Then came emails, and 9/11 was the first time the government listened in on a large scale.
However, the US government realized PGP's potential and confiscated it. PGP and Zimmermann subsequently become the subject of a criminal investigation.
This technology only allowed two people to communicate without anyone watching. So imagine how the government would treat the creator of Bitcoin, a technology that allows you to transfer value for free without the control of banks or intermediaries.
A technology that removes the monopoly on money from the government. It is, therefore, not surprising that Satoshi Nakamoto chose anonymity.
Satoshi first shared his whitepaper on Bitcoin during Halloween in 2008. He shared his magnum opus on a metzdowd.com cryptography mailing list. The first sentence of his whitepaper:
“A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution.”
Additionally, he created an account on the Bitcointalk.org forum and posted the first message under the pseudonym Satoshi. He also created a website with the domain name bitcoin.org and continued to work on Bitcoin's software. Fun fact: bitcoin.org existed before the Bitcoin whitepaper.
On January 3, 2009, Satoshi minedthe first Bitcoin block, which is also known as the genesis block.
In 2010, Satoshi Nakamoto worked with other developers to improve the Bitcoin protocol. He did this exclusively via e-mail and the forum. He was involved in the community and corresponded with them often.
Then, he suddenly gave Gavin Andresen access to all the software and transferred internet domains to community members. At the end of 2010, he stopped working on Bitcoin, at least under the name Satoshi Nakamoto.
And then, on a quiet Saturday in April 2011, he shared his last message on the forum. Developer Mike Hearn asked Satoshi if he plans to rejoin the community. Satoshi replied:
“I've moved on to other things. It's in good hands with Gavin and everyone”
And with that, Satoshi Nakamoto disappeared from the stage.
Satoshi's bitcoin receiving address has held one million bitcoins for years. In December 2017, when the price was at an all-time high of $20,000, Satoshi had $20 billion in bitcoin. For a brief period, Satoshi was the 44th richest man in the world, and yet he didn't sell a single bitcoin!
Could Hal Finney be Satoshi Nakamoto?
Some speculate that Hal Finney may have been the person, or one of the persons, behind the pseudonym Satoshi Nakamoto. Hal Finney was involved with Bitcoin from the beginning and had rare expertise and a long history of working on related matters. Furthermore, Satoshi Nakamoto disappeared around the same time that Hal Finney's physical deterioration occurred.
In 2014, Newsweek thought it had identified the creator of Bitcoin. However, the person in question, the California math teacher named Dorian Satoshi Nakamoto, had nothing to do with it. It later turned out that he lived just a few blocks away in the same small town as Hal Finney.
Satoshi Nakamoto’s Real Identity
The experts at PlasBit hope that Satoshi's real identity will never be known. The fact that we don't know who it is and that Satoshi is no longer working on Bitcoin means that there is no longer a central leader.
And that is exactly the strength of Bitcoin compared to all other cryptocurrencies: decentralized and independent. Look, for example, at various crypto projects such as Ripple, Ethereum, Libra, and Kik. Whether it is justified or not, the leaders of all these projects had to answer to the American government.
Bitcoin's CEO has never been subpoenaed. Yet in recent years, many names of people who could be Satoshi have been discussed. Some claim to be Satoshi (but can't prove it), and others are the result of bad guesswork by the media.
Dorian Nakamoto - Perhaps Satoshi Nakamoto?
In a March 2014 Newsweek article, Dorian Nakamoto was “discovered” as Satoshi Nakamoto. This was the first time that so-called mainstream media published about Satoshi's identity. You understand the crypto world was turned upside down.
Newsweek saw several similarities between Satoshi and Dorian. Both are said to have libertarian leanings and a Japanese connection. What also makes the comparison easy is that they are both called Nakamoto.
Dorian is Japanese-American and worked on secret defense projects. The author of the article also claimed that Dorian told her that he was no longer involved in Bitcoin and that he had transferred his work to other people.
He later denied this quote, claiming he had misunderstood the question. He thought the journalist was asking him about his previous work with Citibank. Newsweek also published a photo of Dorian's house with the article, making his location easy to trace. The crypto community was not pleased with this.
A fund set up for him raised 67 Bitcoins to thank Dorian.
Craig Wright - Definitely not Satoshi Nakamoto
Most people suspected of being Satoshi Nakamoto strongly deny it. Craig Wright is different. Craig Wright is special, or at least finds himself rather special.
In 2015, Wright came onto the scene. When asked about what he had done, Wright launched into a monologue about his master's degree in statistics and his two doctorates. He also said that he had been involved with Bitcoin for a long time but kept a low profile.
Then Wired magazine wrote a story about Wright and claimed to have proof that Wright was the real Satoshi Nakamoto.
“I've done my best to try to hide the fact that I've been using Bitcoin since 2009. By the end of my tax dispute with the Australian government, I think half the world will know that I'm Satoshi Nakamoto the fuck.”
At first glance, Wired's evidence seemed solid. But later, articles questioned the evidence given. Slowly but surely, evidence and facts emerged that undermined Wright's claim to be Nakamoto. Even Ethereum's ever-reluctant Vitalik Buterin agitated against Wright as Satoshi.
Wright has been asked several times to send Satoshi Nakamoto's coins, even if they are only 0.001 BTC. This would allow him to prove beyond doubt that he is Nakamoto.
Obviously, Wright was unable to prove that he was Satoshi Nakamoto in this way. He has tried other ways, for example, by creating a new currency with a hard fork on Bitcoin Cash. He called this coin Bitcoin SV. SV stands for Satoshi's Vision. Well...
Reasons why Craig Wright is Definitely not Satoshi Nakamoto
There are quite some reasons why Craig Wright is definitely not Satoshi Nakamoto, and why Hal Finney has a greater chance of actually being him. Let’s explore these reasons in great detail below.
Conflicting Claims
One of the most prominent reasons Craig Wright's true identity remains a bit of a mystery is the conflicting claims made by himself and others. Wright has claimed multiple times that he is indeed Satoshi Nakamoto and presented cryptographic keys and other technical evidence to support his case.
However, many of the most prominent figures in the cryptocurrency world, including early Bitcoin developers and researchers, have expressed their skepticism and outright disbelief over Wright's outrageous claims. These differing opinions have only increased the intrigue surrounding his true identity.
Technical expertise
Wright's proponents argue that his deep knowledge of Bitcoin's underlying technology and his involvement in early discussions about the cryptocurrency lend credibility to his claim that he is Satoshi Nakamoto.
They point to his broad knowledge of cryptographic principles and his ability to solve complex technical concepts as evidence that he could be the mysterious creator. However, critics argue that while Wright may certainly have a high level of technical expertise, this does not necessarily prove his identity as Satoshi Nakamoto.
They claim that anyone with enough knowledge could imitate Nakamoto's style and use it to deceive others.
Legal Battle
The quest to discover Craig Wright's true identity has also played out in courtrooms around the world. In 2019, Wright was sued by the estate of Dave Kleiman, a computer scientist who some say was involved alongside Nakamoto in the creation of Bitcoin.
The lawsuit alleged that Wright defrauded Kleiman's estate out of billions of dollars in Bitcoin. As part of the legal proceedings, Wright was ordered to provide documentation proving his ownership of the early Bitcoin addresses associated with Nakamoto.
However, his failure to fully comply with these requests has only fueled speculation surrounding his identity.
Cryptographic Keys and Signature
One of the most compelling pieces of evidence Craig Wright puts forward is his possession of cryptographic keys used in the early days of Bitcoin.
These keys are believed to be linked to Nakamoto's identity and could provide irrefutable evidence if they were indeed in Wright's possession. Skeptics, however, argue that the keys presented by Wright could have been obtained in other ways, such as hacking and other forms of cybercrime.
Community Reactions
The cryptocurrency community is divided in its response to Craig Wright's claims. Some individuals and organizations have supported him, believing that he is indeed Satoshi Nakamoto, while others have vehemently opposed his claims. This divide has led to heated debates, online discussions, and even the creation of alternative cryptocurrencies by those who reject Wright's claims.
Impact on digital forensics
The ongoing investigation into the identity of Craig Wright has significant implications for digital forensics. It highlights the challenges forensic experts face when dealing with complex cases involving cryptocurrency.
In Essence Bitcoin is a Reaction
We do not want to end this tribute to Satoshi Nakamoto with Craig Wright, as that would do us a disservice to the creator of Bitcoin.
Bitcoin was born in response to the 2008 financial crisis and as a measure against the consequences of the 9/11 Patriot Act. This 2001 law allows the US government to freeze accounts.
Satoshi Nakamoto showed us a world where the government is not in charge of your money. A world where the power of banks does not reach into your wallet.
We are in charge of our money again. We determine our fate. If the rest of the world is also convinced of Bitcoin, we can truly live up to Satoshi's legacy.
In the end, who was Hal Finney exactly? Maybe he was Satoshi Nakamoto, or maybe not, perhaps we shall never know.
