Destroyed Keys Cost WIRED $100,000 in Bitcoin

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Back in 2013, WIRED began mining for Bitcoin using a mining device sent to it by the now-defunct Butterfly Labs. It successfully mined 13 Bitcoins reportedly worth around $100,000 and apparently threw away the keys in its quest to remain ethical in its reporting on cryptocurrency. Years later, Louise Matsakis, staff writer at WIRED, said the magazine could have locked the coins down to be used at a future date.

Butterfly Labs had shared a 5-gigahash-per-second Bitcoin miner with WIRED so that it could review the miner. Paying customers would have had to invest $274 for the system that WIRED received. At the time, miners didn't need the powerful, specialized hardware required to mine crytocurrencies that is required today.

By essentially winning the Bitcoin lottery a couple times, WIRED earned itself over 13 coins, which left it confronting a moral dilemma. When former senior writer for WIRED Robert McMillian reported on the earnings, he set forth the poignant question of what they should do with the proceeds. After a lengthy conversation, staff members couldn't agree on what to do with the earnings, but, Matsakis said, "what was agreed upon was that the money shouldn't just sit there, because it could influence how the magazine reported on cryptocurrencies."

To settle the matter, WIRED decided to destroy the private keys that unlock the Bitcoin wallet so that the funds could never be spent. "Originally I was going to say that the closest metaphor I have is that we dropped a car key somewhere in the Atlantic, but I think it's closer for me to say we dropped the key somewhere between here and the Alpha Centauri," said Stefan Antonowicz, the then-head of engineering at WIRED who set up the miner.

Recovering lost or stolen Bitcoin is impossible, according to Cryptalker. That's bad news for anyone at WIRED who hoped to maybe someday recover the keys. Shredding the private keys to its 13 Bitcoin is a loss, but one that pales in comparison to the estimated 2.78 and 3.79 million lost coins in the worldwide abyss.

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