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12 January 2021

The date that changed digital finance forever: anniversary of the first bitcoin transaction

Dr. Lewin Boehnke

Dr. Lewin Boehnke

CTO at Crypto Storage AG and Head of Research at Crypto Finance AG

About the author

Today, January 12, 2009, is arguably the most important anniversary in the Bitcoin history timeline, because it changed digital finance forever: on this date in 2009, with help from programmer Hal Finney, Satoshi Nakamoto launched Bitcoin for the first time: it’s the anniversary of the first bitcoin transaction.

Satoshi Nakamoto mined the first blocks in the blockchain himself. The first transaction was from Nakamoto to Hal Finney, for a grand total of 10 bitcoins. The transaction was a success, and it is permanently recorded in Bitcoin history thanks to Bitcoin’s unchanging blockchain.

This transaction would be possible to execute today, but it has a few oddities to it.

The most notable one: there is no fee. Miners are free to choose any valid transactions, but why would they choose one that does not pay them, when more lucrative ones are around? Well, back then, before the first transaction…. You get the point? Even today, miners might prioritise their own transactions over foreign ones.

A more subtle point involves the addresses, if they may even be called such. Today, the destination is referenced by a hash of the public key or script. In the early days, this was not the case. The destination is referenced by the full public key. PayToPublicKey (P2PK) instead of PayToPublicKeyHash (P2PKH), and even that latter one is today widely replaced by SegWit addresses.

These public keys do not look especially nice in a block explorer. They would have to be shown as 130 hex characters. That is why today many explorers reference their much shorter P2PKH equivalent that we are used to today, as shown in this screen shot.

Then again, that was not what Satoshi and Hal Finney were looking at back then either.

 

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