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Bitcoin Encryption

How WIRED lost $100,000 in Bitcoin (wired.com) 127

Posted by msmash from the tough-luck dept.
An anonymous reader writes: Back in 2013, the halcyon days of at-home Bitcoin mining, staffers in the WIRED San Francisco office turned on one of Butterfly Labs' mining machines and let it whir away, amassing a horde of 13 bitcoins -- now worth $100,000. But today we have nothing to show for our efforts. What happened to our loot?

The same thing that has happened to millions of other unfortunate miners, actually: We lost our private key, a 64-digit string of random numbers that not one of us remembers. And we've got basically no chance of recovering it: "Originally I was going to say that the closest metaphor I have is that we dropped a car key somewhere in the Atlantic," says Stefan Antonowicz, WIRED's then-head of engineering. "But I think it's closer for me to say we dropped the key somewhere between here and the Alpha Centauri."
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How WIRED lost $100,000 in Bitcoin More

How WIRED lost $100,000 in Bitcoin

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  • Why no "Idiots" tag? (Score:5, Insightful)

    by aurispector ( 530273 ) on Tuesday May 29, 2018 @06:15AM (#56692200)

    All this does is highlight one of the many the serious problems relating to cryptocurrency.

    • Re:Why no "Idiots" tag? (Score:5, Insightful)

      by Daneel Olivaw R. ( 5113539 ) on Tuesday May 29, 2018 @06:22AM (#56692230)

      All this does is highlight one of the many the serious problems relating to cryptocurrency.

      I dont think this problem can be restricted to cryptocurrencies, my lastpass account behaves in a similar fashion. If I forget the password, all my 150 account passwords are gone. My account is very very secure, no one can hack into it and the price for it is me acting like an adult and storing private keys properly. What I am trying to say is, this applies to any proper encrypted stuff. If you lose the key and have no proper restore mechanism, it is your fault.

      • on an unrelated note, Bitcoin ain't the only crypto in town, heard EOS has implemented some mechanism to recover stuff, too lazy to search and post links here.

        • Re: (Score:1)

          by Anonymous Coward

          FYI: If recovery is possible, that means anyone can steal it from you.

      • Re: (Score:3)

        by DogDude ( 805747 )
        I've never lost cash due to forgetting a password.

        • Re: (Score:2)

          by torkus ( 1133985 )

          But i'm sure you've lost cash due to losing it. Or having it stole. Or fire. Or any of the things that can happen to a physical item that you can't personally duplicate.

      • Except, every one of those 150 sites has a password reset mechanism. So if LastPass disappeared tomorrow, you could still get into any one of those 150 sites after you reset your password. The same does not hold true for bitcoins.

    • Re: (Score:2)

      by jythie ( 914043 )
      Many proponents see this as a feature. They are in favor of a deflationary currency, so any BTC that is lost for good increases the value of what they are holding.

    • Which 'serious problem with crypto currencies' do you think it highlights? This was a journalistic institution who decided for ethical reasons that they couldn't use or donate the bitcoins they got from a miner that was given them, and after several weeks of deliberation they decided to destroy the key permanently, and write an article about it at the time.

  • BTC used to be free (Score:5, Interesting)

    by pr0t0 ( 216378 ) on Tuesday May 29, 2018 @06:20AM (#56692216)

    In the very early days of bitcoin, probably 2008-2009, wallet companies were just getting off the ground and they would give you 25 BTC just for signing up for their service. I did that, and put the key and wallet info somewhere I'd never forget.

    I forgot.

    Every so often I'll find an old CD or DVD backup and think, "Hey, maybe I backed that up on here!", but of course I didn't. The wallet company is probably long-gone anyway.

    • Re: (Score:2)

      by AmiMoJo ( 196126 )

      This is a perennial problem for us all, and not just with cryptocurrencies. I have old backup archives I can't open due to forgetting the password.

      A password manager really helps.

      • Something something EQUIFAX? Until there are real penalties for losing this sort of information any password aggregator is simply another word for NSA (or whomevers) Honeypot. At least when Yahoo loses all their customer data it doesn't include my prior addresses, social security number and full credit history.

  • I've got a damaged physical bitcoin. (Score:1)

    by Anonymous Coward
    One with the code on the back but the key on it is scratched so unreadable. I got it when bitcoin was only $50. I think the novelty value of it exceeds any current monetary value of it. I also mined 7 bitcoin when GPU mining was still viable and I gave it all away on 4chan.

  • No so much lost (Score:5, Informative)

    by DarkOx ( 621550 ) on Tuesday May 29, 2018 @06:32AM (#56692248) Journal

    Its not so much about how they lost a bitcoin its more about how they purposefully destroyed it!

    I mean I can put a stack of $100 bills in the fireplace too and they will also be 'gone forever' as far as I am concerned personally. Its not like I can phone of the fed and ask them to print me some new ones.

    Frankly the people at Wired are stupid, most journalists these days are, so no surprise there. I don't see why they could not have solved the conflict problem by selling the bitcoin for cash - so the value is not independant of the bitcoin, donating the money to their favorite charity before running the store about the mini miner thing they reviewed. Should have been and easy and obvious solution. Then you just conclude the story with "and we got a bitcoin which we sold for X at Mt. Gox (or wherever) the proceeds were donated to xyz foundation for the arts and orphans." No problems or conflicts there. XYZ is unaffected by and change in btc value because they got cash. Selling the coin on the currency exchange was an arms length transaction thru a broker, so again no real problems there in terms of conflict. It was totally unnecessary to destroy their private key.

    • Now they've donated the value of the coins to every other bitcoin hodler.

    • I mean I can put a stack of $100 bills in the fireplace too and they will also be 'gone forever' as far as I am concerned personally. Its not like I can phone of the fed and ask them to print me some new ones.

      Actually, if the bills are less than 50% destroyed - you can return what’s left to the Department of the Treasury and ask them to replace it. Of course, they have to be able to convince themselves that your claim is valid - it’s not a given they’ll give you the (equivalent) cash back.

      I remember reading an interesting article about the team responsible for verifying these claims (in the US) probably three decades or more ago - back when newspapers and print magazines still roamed the earth.

    • Re: (Score:2)

      by mlyle ( 148697 )

      > I mean I can put a stack of $100 bills in the fireplace too and they will also be 'gone forever' as far as I am concerned personally. Its not like I can phone of the fed and ask them to print me some new ones.

      http://bep.gov/services/curren... [bep.gov]

      Though they note:

      > Whoever mutilates currency with the intent to render it unfit to be reissued may be fined and/or imprisoned. 18 U.S.C. 333;

      And so they'll probably both fine/imprison you and "print you some new ones".

    • Re: (Score:2)

      by shess ( 31691 )

      Its not so much about how they lost a bitcoin its more about how they purposefully destroyed it!

      I mean I can put a stack of $100 bills in the fireplace too and they will also be 'gone forever' as far as I am concerned personally. Its not like I can phone of the fed and ask them to print me some new ones.

      Frankly the people at Wired are stupid, most journalists these days are, so no surprise there.

      To be clear, not only does WIRED not benefit - they effectively removed the benefit of the BTC from the universe. So not only does the BTC value not benefit WIRED, it also cannot benefit anyone else. Basically, imagine if Apple had given them $100k worth of MacBooks and iPads to review, and then in order to maintain their "integrity" they arranged to have the devices destroyed. That's just waste for nothing.

    • Frankly the people at Wired are stupid, most journalists these days are, so no surprise there.

      Oh give me one big frickin' break, Elmer. Typical Slashdot response - blame the victims.

      The people at Wired at just regular people juggling many things to do, and not necessarily Aspie addled, parent basement dwelling, numb nuts who obsess over crypto currency. Yes, it's unfortunate that they lost the keys, and yes it is ultimately their fault, but that doesn't make them stupid. Just makes them human.

      In fact, this really points the finger back at techies like us here. We (the greater "we") created a

  • I am waiting for the day that we hear that some bank had backed up their encryption keys on tapes that were encrypted using those keys. Easy to do in a complex environment. An HSM fails and poof, everything gone.

    Dear customer, please send us a recent copy of your statement (that we don't send you any more) so that we can figure out what your balance is...

    • I am waiting for the day that we hear that some bank had backed up their encryption keys on tapes that were encrypted using those keys.

      The IRS are already experts in doing that:

      "The disk where I stored my emails crashed. I sent the emails to other people, but their disks also crashed. We had backups, but those tapes have been recycled."

      If you want to lose something . . . you can.

      • Sounds like Hillary Clinton - or Lois Lerner. They seem to have the WORST luck with computers....

  • MISLEADING (Score:1)

    by Anonymous Coward

    They destroyed the key ON PURPOSE. They lost nothing.

  • Easy to explain (Score:4, Funny)

    by DontBeAMoran ( 4843879 ) on Tuesday May 29, 2018 @06:56AM (#56692326)

    WIRED bought $200,000 worth of Bitcoins on january 6th.

  • Someone in the NSA is booking time on their secret quantum computer!

  • Wait a minute... someone LOST money on Bitcoin?!
    I've never heard of anyone admitting that. Only that they made some money, got their original investment out, and then lost the profit, or that they made Lambo-kinda money.

    • As I read the fine article, they only lost money because they lost access to their wallet and cannot convert them back to money. The coins still belong to them, and will, forever.

  • How would they know if the Bitcoins were used.

    • Yeah... it's likely that someone at Wired spent the Bitcoin on blow and then conveniently "lost" the private key to cover their tracks.

  • OP is misleading (Score:5, Informative)

    by argStyopa ( 232550 ) on Tuesday May 29, 2018 @08:36AM (#56692782) Journal

    "We lost our key"
    isn't the same as (from TFA):
    "..."We talked about donating it to a journalism institution, or setting it aside as a scholarship. But we decided that if we gained any benefit from it at all, it would color our future coverage of bitcoin," says Calore. "So we just destroyed the key, knowing full well that it could eventually be worth six or seven figures." McMillan then posted a story announcing the key had been ripped to pieces."

    So they didn't LOSE the key, they deliberately and with forethought and recognition of the consequences, destroyed the key.

    This is a rather stupid article; essentially it's about how a bunch of people pursued a course of action that...had pretty nearly exactly the result they expected.

    Slow news day, Wired?

  • Look for the quiet guy (Score:4, Insightful)

    by petes_PoV ( 912422 ) on Tuesday May 29, 2018 @08:58AM (#56692874)

    We lost [ or destroyed ] our private key, a 64-digit string of random numbers that not one of us remembers

    Although all it needs is for 1 copy to still exist. You'd think that someone in the office would have thought "There's zero cost to me keeping a note of that -- what the hell".

    P.S. have they tried looking under the keyboard?

  • If people are spending tons of money on equipment and electricity to mine bitcoin, what's to stop people from using the hardware to crack the private key?

  • Not to worry, in a few years they will be able to use quantum computing to crack their own wallet and recover their money.

  • ...even on Mars, you still have the car.
    Like most car analogies, this sucks.

    Let me try it. You parked your car in a generic parking garage without plates and you can't remember which garage or which city.

  • Wired is crap (Score:3)

    by Hognoxious ( 631665 ) on Tuesday May 29, 2018 @10:45AM (#56693418) Homepage Journal

    here and the Alpha Centauri.

    Yup, that's definitely written by a Wired "journalist".

  • and they don't backup their systems?

  • If everyone who has lost a key still had it, Bitcoin wouldn't be worth as much, since there would be more circulating. Likewise, if nobody had bought a pizza with Bitcoin, it would be worth precisely f all today! While you lot are moaning about missed fortunes there are other people quietly getting on with spotting the next big trends and not living in the past.

  • Meh (Score:2)

    by Megane ( 129182 )
    Big Bang Theory did it better. (S11E09)

  • How could people as tech-savvy as the Wired staff have failed to record - and BACK UP - their bitcoin key? "The palest ink is better than the most retentive memory."

  • Bitcoin is headed to zero, so the difference between having 13 and none will only be the electric bill.

  • Don't be so sure one of your sys admins won't manage to "find" it, WIRED.

  • Comment removed based on user account deletion

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