The world changed forever in January 2009.
Just months after the pseudonymous Satoshi Nakamoto released his Bitcoin whitepaper, Bitcoin's Genesis Block was created. A few days later, a simple transaction followed that marked the beginning of the Bitcoin era.
Both events set alight a digital revolution that would turn the world of finance on its head and blossom into one of the most transformative systems of the 21st century.
Behind Bitcoin's Creation
In 2008, the world was reeling from a global financial crisis brought about by risky business practices and predatory lending techniques used by large, centralized financial institutions. The bottom had fallen out of the global economy, and the creeping problems of computerization, centralization and control over the flow of information and money by traditional institutions had been laid bare for all to see.
Bitcoin was created against this backdrop.
On October 31, 2008, the Bitcoin whitepaper was released, penned by the pseudonymous Satoshi Nakamoto. The proposal was simple: a permissionless peer-to-peer electronic cash system that would allow users to anonymously transact with one another without the need for a trusted third-party to be involved. The paper famously laid out how the Bitcoin network would make use of public-key encryption and proof-of-work to solve the problems of privacy and double-spend with one purpose in mind: empowering individuals to make their own choices about their own assets.
Bitcoin's creation marked the start of a new era that hinged on a decentralized and trustless technologies. Satoshi would put that vision into motion a few months after the whitepaper's release.
Bitcoin's Genesis Block: The Start of it All
On January 3, 2009, Satoshi Nakamoto mined the very first Bitcoin block. Known as Block 0 or Block 1, the genesis block contained 50 BTC.
But the genesis block had more than just 50 bitcoins. In the lines of data attached to the block, Satoshi had attached a headline from The Times, a British newspaper, from the day the block was mined:
“The Times 03/Jan/2009 Chancellor on brink of second bailout for banks”
To this day, nobody can confirm the exact intent behind Satoshi’s inclusion of The Times’ headline in Bitcoin’s first ever block. But to many early Bitcoin users, the headline was more than a timestamp; it underscored Bitcoin’s role as the beginning of a decentralized movement aimed at transforming financial systems for the betterment of individuals.
In this way, Bitcoin’s genesis block was a technical milestone and the embodiment of a philosophy that centered on a trustless, peer-to-peer system. The genesis block’s creation set Bitcoin’s mining process in motion and was, in many ways, a declaration of financial empowerment. But now, Satoshi had to demonstrate that the BTC mined could be used in peer-to-peer transactions as detailed in their infamous whitepaper.
That's where Hal Finney came in.
The Story Behind Bitcoin's First Transaction
Hal Finney’s name is legendary in the world of cryptography. A videogame developer early in his career, Finney would later spend significant time at the PGP Corporation. PGP is famous for their Pretty Good Privacy program, an encryption system that provides cryptographic privacy and authentication such as public-key encryption for data communication. During this time, Finney built a reputation as a cryptographic activist, interacting with like-minded people on the cypherpunk listserv and helping to develop the world’s first anonymous remailer.
By 2004, Finney’s name and his commitment to privacy-enhancing technologies was widely known, not least because of his role in creating a successful project to break Netscape’s export-grade RSA encryption. Then, Finney developed the world’s first reusable proof-of-work system, a foundational technology on which a consensus-based permissionless network operates.
Nakamoto and Finney were familiar with each other, and Finney knew that this massive project was in the works. When Bitcoin v.01 was launched on January 9, 2009 (just days after the genesis block), Finney sent his congratulations to Nakamoto, becoming one of the first public figures to take serious interest in Bitcoin.
Just a day later, Finney tweeted: "Running bitcoin"
Finney would remark in 2013 that he believed he was the first person besides Nakamoto to run a Bitcoin node. Two days after this tweet was posted, Finney received the very first bitcoin transaction in history.
The 10 BTC transaction was a test, sent before bitcoin had a quotable price. More importantly, it was proof of the Bitcoin concept. The tech worked, the foundations were credible and a titan of cryptography had now left a mark on the network.
Finney would remain in and around the Bitcoin ecosystem until his death in 2014, occasionally contributing to its development as the network grew and as more robust coding was required. In his final years, he was working on bcflick, an experimental software aimed at strengthening Bitcoin wallets.
“When Satoshi announced the first release of the software, I grabbed it right away. 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,” Finney would write in a post on BitcoinTalk in 2013.
That first transaction was worth next to nothing (in the monetary sense) at the time it was sent. But for many in the space both then and now, it was priceless because it demonstrated exactly how Satoshi's creation was supposed to work and, by extension, how the Bitcoin ethos could manifest.
From Transactions to Web3: The Bitcoin of Today
Since then, more than 900 million transactions have taken place on the Bitcoin network, and more than a quarter million transactions now take place on the blockchain daily. The story of the very first Bitcoin transaction is being written every single day that this revolutionary technology remains online.
Bitcoin is continuously proving itself to be not just a powerful tool of financial freedom, but a powerful legacy as well. And today, Bitcoin users aren't just limited to peer-to-peer transactions with their BTC. Rather, they have an entire ecosystem of decentralized applications that they can connect to with their Bitcoin wallets (like Leather), putting their Bitcoin-backed assets to use.
The Bitcoin community, needless to say, has come a long way from the genesis block and simple 10 BTC transaction that took place between Satoshi Nakamoto and Hal Finney. And every year that goes by, more and more builders are discovering new use cases to grow the Bitcoin ecosystem, expanding on Bitcoin's original vision in ways that Satoshi, possibly, didn't even conceive of at the time.
That, in and of itself, is the beauty of the Bitcoin vision: from Block 0 and the first BTC transaction to now, Bitcoin has never stopped growing in its mission to empower individuals through decentralization and trustlessness.