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Memorial Day: Bitcoin Pioneers Hal Finney & Dave Kleiman



MAY 27, 2019


The success of Bitcoin goes to the effort of some elite computer coders, who worked to make a type of digital currency that uses computer science to build, hopefully a trustworthy network by design. The Bitcoin white paper is a complex work of advanced computer science and cryptographic, skilled knowledge.

Hal Finney (pictured above, right) was the first Bitcoin recipient and was a pioneer of "proof of work" cryptographic computer science (a field that was built by Cynthia Dwork, Moni Naor and additionally by Markus Jakobsson & Ari Juels.) Diagnosed with ALS (Lou Gherig's disease) at a young age, Hal Finney suffered paralysis and died in 2014, hoping that condition would one day be cured.

During Bitcoin bull runs, the idea that perhaps more people will have the ability to manage financially, internationally is inspiring. There is a glimmer of hope that a future major corporation will one day be founded upon Bitcoin. Or that blockchain technology can support more advanced medicine.

Bitcoin uses cryptography based in part upon one code invented by the U.S. National Security Agency, called SHA-2. One of the computer coders considered to be a Bitcoin pioneer, Dave Kleiman, was a U.S. Army veteran, and Florida police officer, who was paralyzed in a motorcycle accident. According to one biography for retired Detective Kleiman:

"Some of Kleiman's most notable work took place at S-doc where his role was Chief Information Security Officer. While there he developed a Windows encryption tool that surpassed NSA, NIST, and Microsoft Common Criteria Guidelines...

Kleiman held the following certifications: Information Systems Security Management Professional (ISSMP), Information Systems Security Architecture Professional (ISSAP), Certified Information Systems Security Professional (CISSP), Certified Information Forensics Investigator (CIFI), Certified Information Security Manager (CISM), Certified Anti-Terrorism Specialist (CAS), Certified Computer Examiner (CCE), a Microsoft Certified Systems Engineer (MCSE)." 

A brilliant computer coder, Dave Kleiman worked in the defense software field. Mr. Kleiman was hospitalized, reportedly for a large part of 3 years with MRSA infection. People who go to the hospital frequently, and people prone to developing bed sores can be more susceptible to Methicillin-resistant Staphylococcus aureus (a gram positive bacteria).

Dave Kleiman died in 2013, of MRSA infection, as Bitcoin had reached well above $100 a coin (Bitcoin is currently $8,000 a coin.)

Modern Computer Science Inevitably Produced Something Of Value

Bitcoin is simply a brilliant implementation of a concept for a decentralized type of currency. It is a form of tech-currency, or cryptocurrency with value generated by computer programming, that solves advanced cryptography-based math to verify Bitcoin transactions. Bitcoin did not just find success because of dumb luck, experts in fields of computers and digital currency and cryptography effectively joined forces (or assembled by the individual or group who goes by the coined name: Satoshi Nakamoto.)

The following post from Hal Finney explains some of the history of Bitcoin:

"I had made an attempt to create my own proof of work based currency, called RPOW (Reusable Proof-of-Work). So I found Bitcoin facinating.

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.

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." Hal Finney, 2013

Trustworthy nodes work to solve advanced mathamatics, related to the verification of Bitcoin transactions: In doing so the nodes work to receive newly mined Bitcoin, up to 21 million total according to Bitcoin's design (with a very rare "fork" where Bitcoin issued 1 new Bitcoin Cash for every Bitcoin in 2017.)

As Bitcoin's price settled back down from over $15,000 to below $5,000 the computer program, that is Bitcoin & the computers mining Bitcoin, effectively eased, then as of now have recently performed very well.

Each block in the Bitcoin blockchain is currently a record of around 3,500 Bitcoin transactions, with an average 144 blocks mined a day. For every block that is mined, 12.5 Bitcoin are computer generated (currently around 12.5 Bitcoin are mined every 10 minutes) to the successful, trustworthy Bitcoin mining nodes. The current difficulty level on the Bitcoin verification mining process is 1 in 6 trillion, therefore the mining process uses considerable energy as the Bitcoin mining program makes a few very large calculations per second, to try to be the first to verify the cryptographic code that Bitcoin generates as Bitcoin transactions occur. Those Bitcoin verification computer nodes have Bitcoin Wallets, that are part of the storage process for Bitcoin, that includes an offline Bitcoin Wallet storage drive, and a type of backup drive, as well as a secure contingency for the password (like a copy in a vault) to access Bitcoin.

 " order to add a block of transactions to the blockchain, miners must solve a complex computational math problem, also called a "proof of work." What they're actually doing is trying to come up with a 64-digit hexadecimal number, called a "hash," that is less than or equal to the target hash." Bitcoin Mining Explained, Investopedia 2019

One of the prominent, original Bitcoin websites recommends owners include their Bitcoin assets in their "testament," as in a Will. So that the, now valuable, Bitcoin can't be lost. As has been the case with some who did not realize how valuable Bitcoin would be. They didn't have a backup, they didn't leave their password copy as part of their Will, and so on.

Computer Science & Cryptography

It is important for investors and speculators to realize that Bitcoin & the now more than 1,500 other types of digital currencies, are new and basically, contain all sorts of risk.

Bitcoin, has shown strong performance, based on efforts by truly brilliant computer coders, who were pioneers of the creation of the Bitcoin computer program world. They included pioneer coders Hal Finney and Dave Kleiman, who turned interest for computer science and cryptography (important to the field of cybersecurity) into incredibly valuable research and software that has now provided a computer-based, decenteralized form of value & wealth (As with all investments there is risk. While the actual implementation of Bitcoin has, for now proven to be valuable.)

The concept of computers being able to generate more wealth, in a day where talented workforce with average corporate tech pay have financial difficulties, including housing, healthcare, student loans, etc, while working full-time supporting family and also working on side jobs and side projects that yield more modern successful inventions and business, is sensible.

The Healthcare System Failed Hal Finney & David Kleiman

Medicine, health, healthcare and hospital systems are not easy, of course. ALS, Lou Gherig's disease is extraordinarily complicated, as is paralysis caused by injury, and MRSA infection. However, in the world of hospitals, they are not so rare.

Hal Finney, according to some biographies and interviews spent many of his Bitcoin trying to pay medical bills. While Dave Kleiman, according to many reports did not benefit financially from his contribution to Bitcoin. According to Wikipedia, Detective Kleiman experienced a loss of wealth when a Costa Rica based centralized "digital currency" business was shut down, for alledgedly laundering money and being unlicensed.

The operator of that centralized digital currency business: Liberty Reserve, had fled the country after being sentenced to five years in prison for his role in an early type of digital currency business called Gold Age. The other operators of Gold Age had their sentences reduced to 5 years of probation. After trying to explain, effectively that cryptocurrency was not what the U.S. government was trying to charge them with.

Thus far Bitcoin has made the case for a decentralized cryptocurrency having the capacity to compliment the very powerful, however also deeply flawed centralized system.

In America banks have a "$5,000 and more reporting rule," in addition to an allegation of "structuring" if customers make smaller deposits, so either way. If a customer spends over $5,000 a bank teller (effectively, in some places) gets to decide whether that customer should be investigated. (Keep in mind that to this day there are banks that refuse to open accounts for citizens based on discrimination. Bank tellers, tell new customers "You won't be coming in here every week" before refusing to open accounts for people they don't like; based upon discrimination.)

If a customer withdraws a few thousand for a new car, a bank teller on the spot uses their opinion, as to whether they should effectively tell on that customer for spending their own money. At the same time there are simply daily examples of those very same banks lying, cheating, stealing 24 hours a day.

In some states, to this day, banks simply won't open an account for customers. As those banks run, effectively, foreclosure scams (on everything from farm equipment to homes) against their customers. Those bank customers may have their lives and families lives ripped apart, over the (misusage, perhaps of) "know your customer" / $5,000 official bank reporting & small deposit "structuring" characterizing of people's deposits of their own money (that they paid taxes on & pay taxes on) based on opinion and statistically distilled discrimination that is not accurate, using the $5,000 United States banking increment before the customer is either effectively treated as guilty before proven innocent, or a small deposit "structurer" as part of a for profit government monitoring of money (to ensure taxes are paid, though average Americans in some areas are treated as guilty until proven innocent in some instances, contrary to the U.S. legal metric of "innocent until proven guilty.")

From time to time, there is some criticism that $5,000 is the "magic number" before banks need to use opinion to file a "suspicious activity report" and government reports. When people continiously try to vote for politicians who claim "less taxes" (not, please consider the public guilty until proven innocent if they spend $5,000) only for the "less tax" political groups to increase taxes left and right (when clearly the majority of the American public for hundreds of years has made lower taxes a major political focal point.) While some banks try and do implement actual scams against their own customers to bring in more fees, or the appearance of more business as some managers at Well Fargo were alleged to have tried.

The more money, in revenue that certain financial infractions have the ability to generate, the more likely it is for corrupt offices to try to increase the numbers of those infractions. Particularly when basing actions on opinions.

Some cities make finanical incentives for families to break-up (by offering more state dollars to single mothers) then proceed to mass incarcerate, both fathers and mothers over trivial infractions that are caused, in some cases by intentional efforts to mass incarcerate. Then provide them as free-jail-labor, while rasing taxes, as Indiana is currently doing with their $30 Billion dollar tax increases, using free-jail-labor for the objectives of those tax increases.

Yet some muncipalities thrive, intentionally increasing "business," including financial-legal matters that result in mass incarceration: Instead of implementing new designs to alleviate that source of legal woe, that is (sometimes) also purposefully caused to increase government revenue: Sometimes with different offices in the same department, unknowingly working against eachother, as top offices bring in the "earnings." As sometimes there is potential for those same offices to be used for political fights, in addition to some aggressive revenue generating actions, where the proceeds and settlements have little to no accountability, federally, as incentives and profit taking and quota-type legal protocol have power to incentivize what is termed "policing for profit" including asset seizure with no conviction that has been used as a guise to just flat steal cash from motorists, as well as vehicles and property, including the simple false accusation of earned money being drug money (the actual facts of a recent Supreme Court case that ruled a vehicle seizure; and some asset seizure unconstitutional (U.S. Supreme Court Case: Timbs v. Indiana 2019.))

 "...seized assets like vehicles and homes are sometimes used for the personal gain by law enforcers. It has been argued that the use of asset forfeiture is imbalanced against poor people, who are more likely to be caught in drug trafficking and have the fewest assets to lose, and makes it difficult for such people to re-integrate with society without these assets." Wikipedia, sourced from New Yorker & Washington Post articles

Granted the subject is complex, however the frequent instances of average Americans being mass incarcerated, forced into poverty and just flat stolen from by authority figures is representative of flaws and dysfunction in some centralized, opinion-based systems that do not work proactively to solve complex matters, such as poverty, one side-effect of political systems that fall to greed. While those that work hard to uphold value and virtues see that sort of "proof of work" in success and wealth in their communities.

"Kleiman lost money due to the US government seizure of a Costa Rica-based digital currency service Liberty Reserve leading to Kleiman's poverty"

Where obviously it is the job of government to keep the peace and work to prevent crime: Some of Detective Kleiman's efforts were honest, genuine and intelligent, and the business was eventually closed & the operator imprisoned for a lengthy time, over accusations against digital currency accounts that could have been considered seperate from the business: That happened to be, a fledgling digital currency business. That included participation by a Florida detective, whose computer coding skills surpassed some of the encryption levels of the NSA, whose work went on to materially invent decentralized computer, cryptocurrency that has the ability to defend people against the disparate poverty caused by dysfunctional politics, and corrupt financial practices.

Knowing full well the use of legal engineering that is used to increase revenue, where one tactic that is used by some counties and some departments is to actually cause the low-level offenses they are going after (where on the contrary, serious crime does require serious, successful strategies.)

Early inventors of computer-based cryptocurrency were sentenced to years in prison, when their businesses were not illegal. Still, readers are reminded that cryptocurrency is newer, and has risks, including new types of risks. Intelligent investors strive to allocate properly and establish multiple different lines of income, for instance by running a business and building a strong-credit rated corporate bond ladder, while also having a side shop on Ebay or Amazon to bring in even more money. As well in America, by paying into Social Security, so they can importantly earn Social Security benefits once retired.

The basis of some cryptocurrency computer programming is the use of a network of computers based on trustworthiness, in order to verify & earn cryptocurrency. The equations to be solved, can't be solved with opinion, they must be solved with math and computer science. With a difficulty level of 1 in 6 trillion.

In some places in America, at a value of over $8,000 per Bitcoin, that U.S. citizen would automatically be considered guilty until proven innocent, they could have the money simply taken over a traffic infraction (with numerous reports stating that motorists have their cash permanently taken under the guise of asset forfeiture, literally over traffic infractions.) While some U.S. banking laws (as practiced some places) effectively treat bank customers spending over $5,000 as guilty until proven innocent, as part of a revenue generating business that does not work to reduce revenue over financial-legal matters. Obviously some states use their authortity more responsibly & facilitate genuine good business & wealth, while some counties, literally tolerate discrimination under the color of the law.

All the while there is a math-based, computer science and cryptography based way of increasing effective prosperity. There are counties in America that are in disparate poverty, based on the opinion of a few, who spent their time working for self profit, instead of prosperity (where more people have opportunity to have success, health & wealth.) Places where citizens are lined up to be mass incarcerated to death, over both low-level infractions and completely fabricated accusations, complete with efforts to cause those infractions: Because that was the opinion of the new manager of the year.

Conversely areas that focus on intelligence-based, and in the U.S., Constituion-based practice have benefited immensely. They gave opportunity for average people to follow their interests and raise the bar of excellence, and perhaps take a swing at the reality of nations that failed their people by allowing and causing poverty that also sustains very low standards of health and healthcare.

Where as of now it seems it could be over 100 years before ALS (Lou Gherig's disease) or MRSA infection (and the issue of bacterial infection and antiobiotic resistance) will be resolved, if ever. When Lou Gherig died in 1941.

Will Cryptocurrency & Blockchain Raise The Bar Of Excellence

A decentralized, computer based technology has the ability to compliment the centralized system that accomplishes a tremendous amount of good, in addition to the expected imperfections and flaws.

In either system the most qualified person for a given job has a chance of filling that job, however there is potential for the most qualified to gravitate where needed in a major decentralized computer tech environment.

Neither is perfect, however currently with both the U.S. dollar and Bitcoin there is power for some people to literally revolutionize the complex world of food security, and curative medical research. As well as build multi-million dollar and multi-billion dollar businesses that can employ hundreds of thousands, providing better living conditions.

A major criticism regarding Bitcoin is effective scams, including "cloud mining" services that claim "no fees," only to cause investors to have 0 or less cryptocurrency after purchasing cloud mining services (hash rate or hash power.)

Bitcoin is a benefit for those who actually intended to mine it for a long-term. As the price fluctuates the cost to mine the cryptocurrency has teetered above and below the value. However some believe and hope for a day where Bitcoin is even more valuable. Not based on opinion. Based upon computer science, and the economy that Bitcoin has built so far and is trying to provide a foundation for into the future.

Computer tech that can simultaneously perform tasks and generate wealth may sound like science fiction. For those lucky enough to be a part of the early days of Bitcoin, the "proof of work" that led to the invention of modern cryptocurrency was extraordinary. Their investments produced phenomenal returns that support new, genuine business and support the Bitcoin computer program.

Wealth & intelligence combined have the power to raise the bar of excellence and standard of living for people for the future. When, today the reality is that some entire communities are impovershed, other entire communities suffer from disease (for instance towns with heavy toxic air, water & ground pollution) as a result of some dysfunction, that common sense, qualified professionals in their fields work to effectively cure, intelligently (not in the easy-way-out sense, that an unqualified team or individual would perhaps opt for.)

In the future there may be more hospital systems to prevent bed sores and MRSA (and similar infections) more accurately. More efforts to work curatively against neurological conditions like Lou Gherig's disease, diseases that affect the motor cortex, Epilepsy, Alzheimers / Dementia, and Parkinson's. Where the top global philanthropists, like Paul Allen who recently died of Non-Hodgkin's Lymphoma endowed major initiatives to advance knowledge of neurological science and medicine, and build the Allen Cell Explorer.)

Cryptocurrencies have a long way to go, and success will depend on both the brilliant foresight of computer professionals like Bitcoin pioneers Hal Finney and David Kleiman, and successful efforts of both the centralized and decentralized systems of value. As well as more efforts to use intelligence-based and scientific-based initiatives to resolve the global epidemic of poverty and financial toxicity of healthcare. Two extraordinarily important causes, that cause low standard of living and death, that as of now Bitcoin, because of success, may help effectively improve for the future. After two of the Ace computer coders who pioneered Bitcoin happened to, unfortunately die in poverty of conditions that haven't been successfully resolved with medicine (MRSA bacterial infection, similar bacterial infection, bacterial resistance, and ALS, Lou Gherig's Disease, the conditions that Dave Kleiman & Hal Finney had.)

Disclaimer: This article is not a recommendation to buy or sell and MQ Investment authors and editors have investment exposure to Bitcoin. Please consult a qualified financial adviser to determine proper allocations, if any to investments.


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