There is no first person. To short naked, you sell some stock you don’t have. Your brokerage puts the money in your account and notes that you are on the hook for some shares. Time passes, the price drops, you buy some shares and relieve your obligation. Or, time passes, the price rises, the brokerage makes a margin call which forces you to buy the shares to relieve your obligation.
OK, that clarifies. I was misinformed. Thanks!