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About Hal

In early 2009, the mysterious entity known as “Satoshi Nakamoto” launched the Bitcoin project. Since then, the decentralized electronic cash system has offered people around the world a hopeful alternative to the existing monetary order. As financial transactions are increasingly monitored, censored, and debased, while billions of people are largely excluded from the international banking infrastructure, Bitcoin stands as freedom money for anyone.

But Satoshi did not achieve this all by himself. Over the past decade-and-a-half, a diverse range of developers, entrepreneurs and activists helped realize the project’s potential.

The very first of them, was Hal Finney.

Born in the Californian town of Coalinga in 1956, Finney early on developed an interest for both technology and liberty. In high school, he volunteered to help manage student records just so he could work with a computer, and at the California Institute of Technology — the university where he’d also meet his later-wife Fran — he was known for engaging in thought-provoking discussions with his fellow students on the merits of free markets.

After graduating from Caltech, Finney landed a job as a computer programmer in the nascent video game industry. Always the forwards-looking technological optimist, he was also quick to secure himself an internet connection when this first became publicly available in the early 1990s. Finney was fascinated by the potential of the brand new information superhighway that promised to connect all of humanity like never before in history.

But he also recognized the potential flip-side of this revolutionary technology. Digital communication could be subjected to an unprecedented level of surveillance: in the wrong hands, cyberspace would become an Orwellian panopticon.

And Finney foresaw how this risk would extend to electronic payments.

“Already, when I order something over the phone or electronically using my Visa card, a record is kept of exactly how much and where I spent it,” he explained. “As time goes on, more transactions may be done this way, and the net result could be a great loss of privacy.”

Our ideologically-driven software developer had therefore been happy to find that he wasn’t the only one concerned about these issues: DigiCash, a startup led by cryptographer David Chaum, had in 1990 already set out to create a form of digital cash for private payments.

“It seemed so obvious to me. Here we are faced with the problems of loss of privacy, creeping computerization, massive databases, more centralization – and Chaum offers a completely different direction to go in, one which puts power into the hands of individuals rather than governments and corporations,” Finney later recalled. “The computer,” he declared, “can be used as a tool to liberate and protect people, rather than to control them.”

Using the computer as a tool to liberate and protect people: it perfectly summed up the goal of the Cypherpunks, a group of cryptographers and hackers that Finney eagerly joined. It was a structureless, leaderless community that throughout the 1990s mostly organized by mailing list, and united around the shared philosophy that human liberty was best achieved by developing software that guaranteed it.

As the group’s unofficial mantra rang: Cypherpunks write code.

Finney, too, wrote code. The gifted programmer was an early contributor to PGP, the encryption software that for the first time let users hide the contents of their electronic messages from prying eyes. Finney also helped build the first remailer, which obfuscated email metadata. And along with his fellow cypherpunks, he successfully fought back against the US government’s attempts to thwart the spread of strong cryptography during the crypto wars of the 1990s.

But perhaps most of all, Finney was determined to realize a form of electronic cash. When Chaum’s DigiCash by the mid-1990s struggled to grow adoption, Finney encouraged all Cypherpunks to consider alternative approaches to achieve the goal of private transactions for the internet. During these years, he took a guiding role in mailing list discussions about digital currency, and was always eager to study new proposals whenever they popped up.

By 2004, Finney would launch a digital payment system of his own: RPOW. By combining several existing privacy tools, users could indeed send and receive digital transactions anonymously.

Sadly, RPOW never really took off, and by the mid 2000s many of the original cypherpunks had given up hope that a decentralized electronic cash system was possible.

But Finney himself, ever the optimist, was not one to quit.

When, in October 2008, Satoshi Nakamoto first introduced the Bitcoin white paper to the cryptography mailing list — the spiritual successor of the Cypherpunks mailing list — the proposal was broadly received with a mix of apathy, skepticism, and dismissal… but Finney represented the positive exception.

“Bitcoin seems like a very promising idea,” he responded. “I am looking forward to seeing how the concept is further developed.”

The words of encouragement were rewarded when Satoshi Nakamoto offered Finney early access to the project’s source code. In the weeks and months that followed, Finney started helping Bitcoin’s creator by reviewing parts of the codebase.

Until, on January 8th, 2009, Satoshi issued the first version of the Bitcoin software on the mailing list.

This time around, Finney was the very first person to respond:

“Congratulations to Satoshi on this first alpha release. I am looking forward to trying it out.”

So he did. On January 10th, Finney fired up the software, which promptly connected with two peers: quite possibly both operated by Satoshi Nakamoto himself. “Running bitcoin,” he proudly announced on Twitter, marking the very first post about the electronic cash system on the social media platform.

Unfortunately, his node did soon crash— but for Finney, this was no reason to give up. He restarted the software, and reached out to Satoshi Nakamoto. Over the next day or two, they pinpointed the problem, and a fix was swiftly released.

One day later, on January 12, Finney became the first ever recipient of a Bitcoin transaction: 10 bitcoin, sent to him by the creator of the system himself.

Besides helping Satoshi Nakamoto improve the software, Finney was in these early days also an effective communicator of Bitcoin’s promise and potential. At a time when only the tiniest minority of early adopters were starting to take an interest in the project, his insights were consistently far ahead of the curve. From day one he understood the value of Bitcoin’s limited supply of 21 million coins, and he went on to speculate how Bitcoin could scale through payment layers and neo-banks, he theorized about overlay protocols, he contemplated solutions to make transactions more private, he thought about ways to reduce CO2 emissions from mining, and he articulated why future copycat projects were unlikely to displace Bitcoin. Hal truly had so much to give.

But tragically, 2009 had also been the year in which his wife Fran began to notice that Finney started slurring his speech, while his overall fitness seemed to decline as well. Just as he had taken up the hobby of running — he’d set his sights on qualifying for the Boston marathon — Finney was diagnosed with the nervous system disease ALS. He would in the following years gradually lose control over all motor functions.

Yet, even as the disease progressed, Finney did what he could to make the best of his situation. He learned to use an eye tracking program to operate his computer, and would even continue writing Bitcoin code; Finney worked on a project to strengthen Bitcoin wallets.

“It’s very slow, probably 50 times slower than I was before. But I still love programming and it gives me goals,” Finney wrote on the Bitcoin Talk forum in 2013.

Sadly, he would never quite finish the project. On August 28, 2014, at 58 years of age, Finney passed away in Phoenix, Arizona, where his body is being cryopreserved by the Alcor Life Extension Foundation.

But Finney’s dream of electronic cash lives on.

A decade after his passing, political dissidents now use Bitcoin to hide their transaction activity from repressive regimes, tens of millions of citizens in authoritarian and collapsing economies use the electronic cash system to escape inflation and overcome financial barriers, and its advocates believe it can offer a more fair and reliable monetary future for all of mankind. All of this, and more, was made possible by visionaries like Hal Finney, who took it upon themselves to carry Satoshi Nakamoto’s project forward.

To celebrate his efforts, the Human Rights Foundation is on this fourth Bitcoin halving day proud to announce the Finney Freedom Prize: an award to honor those individuals who follow in Hal Finney’s footsteps to further the cause of Bitcoin and open-source software as tools for freedom.