Crypto 101: Who Was Satoshi? Theory 1: Hal Finney

Finney was the earliest Bitcoin adopter after Satoshi himself - but theories he was Bitcoin's creator don't stack up.

Crypto 101: Who Was Satoshi? Theory 1: Hal Finney

The identity of Bitcoin's creator, Satoshi Nakamoto, remains unknown. That hasn't stopped the crypto community coming up with various theories about who he, she, or they might be.

Hal Finney was an American developer who worked on several early computer games, before moving on to become one of PGP's first employees (making a huge and generally unacknowledged contribution to the code of PGP 2.0). He was a prominent cypherpunk, and one of the only people to show real interest when Satoshi dropped the Bitcoin white paper on the cypherpunk mailing list.

He contributed to Bitcoin's code, was the first to download and run the Bitcoin software other than Satoshi, and was the recipient of the first ever Bitcoin transaction—now known as the Finney Transaction.

His interest in electronic currencies, background in cryptography, status as a well-known cypherpunk, and very early involvement in Bitcoin has led some members of the community to claim that he was Satoshi. Furthermore, Finney was diagnosed with ALS (motor neurone disease) in August 2009, retired from PGP in 2011, and died in 2014, at the age of 58. The timing of his illness and physical decline roughly matches the point at which Satoshi stepped back from Bitcoin and disappeared.

If there was one person who was in the right place at the right time, and who had the skills and interests to be Bitcoin's creator, it's Finney. However, the simplest explanation is that he was not Satoshi, simply an active contributor.

In His Own Words

When asked by a journalist, Finney explicitly denied being Satoshi, taking most of a day to write the email with eye-tracking software.

As for your suspicion that I either am or at least helped Satoshi, I’m flattered but I deny categorically these allegations. I don’t know what more I can say. You have records of how I reacted to the announcement of Bitcoin, and I struggled to understand it. I suppose you could retort that I was able to fake it, but I don’t know what I can say to that. I’ve done some changes to the Bitcoin code, and my style is completely different from Satoshi’s. I program in C, which is compatible with C++, but I don’t understand the tricks that Satoshi used.

To accept that Finney was Satoshi would be to credit him with a level of deception that seems uncharacteristic and completely unnecessary, including emailing himself (as "Satoshi") on the cypherpunk mailing list and flat-out lying to those who asked him.

As far as Finney goes, the simplest explanation is probably the best. But there's one other coincidence that community members keep coming back to, and that's Finney's geographical proximity to Dorian Satoshi Nakamoto.

Back in March 2014, Newsweek ran a poorly-researched article claiming to have found Satoshi Nakamoto. Based on faulty evidence, misunderstanding, assumption, and wishful thinking, journalist Leah McGrath Goodman outed a Japanese-American engineer called Dorian Prentice Satoshi Nakamoto as Bitcoin's creator.

The story was quickly debunked, and for a while Goodman's reputation was mud. Dorian ultimately took legal action against Newsweek for the unwarranted harassment he and his family had suffered.

But in all of this there was an odd twist: Dorian lived less than two miles from Hal Finney. Another journalist, who looked into the Satoshi story in more depth, was led to Finney and spent some time interviewing him. One of his anonymous contacts from the cryptography community sent him an email, titled "What Are The Odds?" It included the following paragraph.

“What are the odds in a country as large as ours, or as large as California is, or even as large as the general LA area is, that [Dorian Satoshi Nakamoto] and Hal Finney both live(d) in Temple City at the same time, about 1.6 miles from each other?” my contact wrote. “Did they know each other socially, through some club? Did one help the other?”

A variant on this theory circulating in the Bitcoin community suggested another layer of intrigue: That Finney had met or knew of Dorian, and used his name as a cover for his own activities.

Had Finney invented Bitcoin himself and simply used his neighbor’s name as a pseudonym? On Reddit, a user traced Finney’s IP address and found that he was in the Los Angeles area. “Dorian [Nakamoto] probably could’ve been a drop,” wrote a user called Ikinoki, using the hacker jargon “drop,” a patsy whose personal information is used to hide online exploits.

It's certainly an interesting coincidence, but one that has a relatively straightforward explanation. We'll explore that in a subsequent article in the series.

Following his death on August 28, 2014, Finney was cryo-preserved. Perhaps one day he will be able to tell us more—though it seems the story probably isn't as interesting as some of the crypto community would like to believe.

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