Back in 2013, when you could still mine bitcoins at home, WIRED was sent a small, sleek mining device[1] manufactured by the now-defunct Butterfly Labs[2]. We turned on the Roku-looking machine[3] in our San Francisco offices and allowed it to do its job. A small fortune was soon amassed, now worth[4] around $100,000. Then, we lost the money. Forever.
Here's what happened to WIRED's 13 Bitcoins—and to the millions of others that have faced the same fate.
Stefan Antonowicz, WIRED's then-head of engineering, set up[5] the miner. Robert McMillan, a former senior writer for WIRED (who now works at The Wall Street Journal), then wrote[6] about it. "When we received that Butterfly miner, we had a new ethical question: What do you do with the proceeds of a review device that essentially prints money?" says McMillan.
First, it's probably worth explaining how WIRED accrued its six-figure Bitcoin fortune. While fiat currencies, like the dollar, rely on banks and government regulators, Bitcoin runs on a peer-to-peer network monitored by an army of volunteer miners that run specialized software. Every 10 minutes, all the miners in the network race to solve a series of complex cryptographic math problems. The computers that win are awarded a slice of 12.5 new bitcoins. (That number halves every four years; it was 25 when we got our miner.) Usually, the fastest computers in the network solve the problems first.
Over time, the puzzles have gotten harder, leading to a kind of computing-power arms race. Back when Bitcoin first launched, it was possible to mine coins using an everyday computer. These days, you'll need specialized hardware significantly more powerful than the Butterfly Labs miner WIRED had.