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Who is Satoshi Nakamoto? The Hal Finney theory

Hal Finney

Hal Finney definitely played a role in Bitcoin’s earliest iterations, helping Satoshi with various bug fixes. But he was actually less involved than many believe back in 2009, and certainly wasn’t the man himself.

In our first article on the identity of Satoshi, we looked at Dorian Satoshi Nakamoto’s geographical proximity to Hal Finney. A remarkable coincidence, it seems: why would this man, with such a distinctive name, turn up so close to a man who had been so involved in the earliest stages of Bitcoin? The conclusion to which many have jumped is that it’s not a coincidence, but that Finney and his cypherpunk pals used Dorian’s name (at least, his middle and last names) as a collective identity for their work on digital cash, in which they wanted to remain anonymous.

What we know

Some, like journalist Andy Greenberg, have suggested that Finney himself was Satoshi, which he denied. (He also denied knowing Dorian.) He certainly had the background and profile, having worked on key privacy projects like PGP and anonymous remailers in the past, and taking an interest in other early forms of digital money. But there’s plenty of evidence, as well as the maxim that the simplest explanation is usually the best, to show he’s not.

Hal Finney actually showed Greenberg emails between himself and Satoshi, as well as his old Bitcoin wallet with mined transactions and that first, famous transfer in it. ‘The wallet evidence, along with the Gmail timestamps, would have been very difficult to forge,’ writes Greenberg. ‘And the notion that Finney alone might have set up the two accounts and created a fake conversation with himself to throw off snoops like me, long before Bitcoin had any measurable value, seemed preposterous.’ Plus there’s the suggestion that Finney would have loved to have been more involved, and would have been proud to say so if he had.

Early Involvement: The Cryptography Mailing List

There’s no question that Hal Finney was involved in Bitcoin. He was there before the start, giving feedback on Nakamoto’s white paper when few other ‘experts’ on the Cryptography Mailing List were prepared to give it much time. (In fact, most dismissed it with little further thought – they appeared to have reached their own conclusions about whether it was viable before they read the white paper.)

Finney reflected on his relationship with Bitcoin in this bitcointalk post, dating from 2013 – 18 months before he died. Taken at face value (that is, assuming he was not simply lying to cover his tracks and protect his family), it actually suggests he was less involved than many people believe. He was there at the beginning, and before the beginning, exchanging messages with Satoshi, helping refine his ideas and even being the recipient to that first now-famous transaction. And he did come back and work on Bitcoin later. But it seems there was a period when he lost interest, and was far from immersed in its development. His bitcointalk post makes this fairly clear:

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. I mined block 70-something, and I was the recipient of the first bitcoin transaction, when Satoshi sent ten coins to me as a test. I carried on an email conversation with Satoshi over the next few days, mostly me reporting bugs and him fixing them.

Today, Satoshi’s true identity has become a mystery. But at the time, I thought I was dealing with a young man of Japanese ancestry who was very smart and sincere. I’ve had the good fortune to know many brilliant people over the course of my life, so I recognize the signs.

So far, so good – and it’s intriguing to gain Finney’s thoughts on Satoshi, a man whose identity he says he never knew, but who he thought was young, intelligent and of Japanese heritage. But then there was a period of almost two years where he had nothing to do with Bitcoin:

After a few days, bitcoin was running pretty stably, so I left it running. Those were the days when difficulty was 1, and you could find blocks with a CPU, not even a GPU. I mined several blocks over the next days. But I turned it off because it made my computer run hot, and the fan noise bothered me. In retrospect, I wish I had kept it up longer, but on the other hand I was extraordinarily lucky to be there at the beginning. It’s one of those glass half full half empty things.

The next I heard of Bitcoin was late 2010, when I was surprised to find that it was not only still going, bitcoins actually had monetary value. I dusted off my old wallet, and was relieved to discover that my bitcoins were still there. As the price climbed up to real money, I transferred the coins into an offline wallet, where hopefully they’ll be worth something to my heirs.

Surprised at Bitcoin’s success

Hal Finney’s bitcointalk profile shows he only registered in November 2010, and this is the point at which he seems to have taken a more serious and ongoing interest in Bitcoin. Prior to this, he exchanged emails with Satoshi and used the Cryptography Mailing List. His response to learning Bitcoin was still going is informing: he was ‘surprised’. Apparently, he did not have great expectations of it all, presumably thinking it would be another form of digital money that history tried out but ultimately discarded.

Fortunately for him (and the heirs he mentioned), he was wrong. But it suggests that, despite the foundational role he played in Bitcoin, he was not as close to Satoshi – whether group or individual – as has often been assumed. And unless you simply assume a man with a reputation for honesty and integrity was lying, and created a complex false trail, then he definitely wasn’t Satoshi, or even a part of a Satoshi group, either.


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