As the name implies, Bitcoin puzzle transactions are created as a challenge and not for the usual purpose of monetary transfer.
Puzzles can be published for several reasons, including software test bounties, marketing campaigns or just for fun.
In the early days of Bitcoin, when $BTC coins could be found for free on the WWW, it was common to set up challenges involving large amounts of coins. (Even legitimate Bitcoin faucets were commonplace back when the monetary value of BTC was in the pennies range. "Free Bitcoin" was actually a thing!)
These early puzzles normally stemmed from technically curious groups, cryptographers, cypherpunks and others who wished to test Bitcoin's resilience against distributed attacks.
As Bitcoin gained higher financial value, the "naive puzzles" of yonder slowly disappeared.
Bitcoin puzzle transactions are now usually part of some marketing campaign, such as for promoting a website or product.
Challenges with very high potential rewards have the potential to generate instant buzz, receive inbound WWW links and get loads of free attention.
Bitcoin puzzles are still an excellent marketing tool. A Google search for "Bitcoin puzzle" will yield recent news articles mentioning large unclaimed prizes. Some Bitcoin puzzles go back several years, such as this one mentioned on Bitcointalk.
Time for a rather controversial realization : every single Bitcoin address out there is a Bitcoin puzzle!
Think about it.
What protects a Bitcoin address from someone who could steal its funds? The fact that the private key, from which we derive a public key address, is not known. If we could somehow crack this puzzle, the funds would be readily available.
Therefore, every single address out there is simply a mathematical puzzle that is very hard to solve.
In fact, solving this puzzle is more expensive than the money contained in those addresses, thus the safety of Bitcoin's encryption.
Bitcoin puzzles can be controversial for several different reasons.
For example, there is no way to verify that the winner isn't the puzzle creator himself. Remember, Bitcoin addresses can be generated for free. Prize winners wouldn't identify themselves, either for their personal security or other reasons. This would make a legitimate winning address just as valid as a fake one generated by the puzzle creator himself.
A different type of fraud is perpetrated by creating zero possible solution games.
Basically, if a scammer is able to raise a high enough amount of BTC to grab the community's attention, and then proceed to generate a phony puzzle, which has zero possible solutions (random numbers) with a high bounty placed on it, it becomes impossible to audit the process without having access to the private key which created the puzzle.
Challengers could end up spending countless hours in vane, not knowing the puzzle doesn't have possible solutions.
Some puzzles offer a signed message as proof of BTC ownership, which is fine for the purpose of proving that the funds do belong to (or have been under the control of) the puzzle creator. But there's also no way to know if the winning address is owned by the puzzle owner himself.
Seeing how several puzzle addresses (see references) now display zero balances, it's possible that the original BTC owners themselves withdrew the coins after Bitcoin gained significant value in recent years.
We've reviewed several Bitcoin puzzles for this article and several of them have all the characteristics of bogus Bitcoin puzzles. In one case, the winner was never identified, the amounts involved were quite high and the time it took to solve also raises questions. Of course, it'd be inappropriate to name names, given we do not have conclusive evidence, but to our readers we say this: if you feel like a puzzle is too good to be true, or that there's something fishy about it, then it's OK to be skeptical about it. You're not alone and there's definitely no such thing as being too careful when it comes to cryptocurrencies.
The image below purportedly contains U$ 2000 worth of Bitcoin. It's a new Bitcoin image puzzle, not the 2019 one.
This particular Bitcoin puzzle was published in October 2020 and very little is known about it.
Interestingly, it is claimed that this particular Bitcoin puzzle does not require any computing skills at all.
The search for solutions to Bitcoin puzzles is the most fun part. Imagine the excitement of actually finding the private key that solves an address?
Bitcointalk has an interesting thread where several puzzle solving scripts get posted all the time.
Some Bitcoin puzzle solution searching scripts expose the sheer computing complexity of Bitcoin, with tens of nested loops where each loop computes a particular hexadecimal power.
Some newbies ask what they need to do to find a Bitcoin puzzle solution.
The reason most puzzles don't specify what the solution is, is because it should be kind of obvious :)
There's only one real solution to a Bitcoin puzzle and it's the address owner's private key! Every real puzzle should always have the private key as the solution. This guarantees that the puzzle solver can redeem the Bitcoin himself in a completely trustless manner, as should be.
As we mentioned earlier, basically every Bitcoin address is an unsolved puzzle. But, if you wish to play with ethically correct puzzles, here is a list of puzzle transactions. If you scroll down the screen you'll find parts of the puzzle which are still unsolved. Since these were designed to be broken, it's OK if you find the solution and transfer the Bitcoin over to yourself.
Breaking others' private keys and taking their Bitcoin is unethical, although the legality (or lack thereof) of it would depend on each jurisdiction.
In the grassroots philosophy of Bitcoin, if you find the private key then you own the coins - no questions asked. But, in the real world, there may be other legal implications, so make sure to ask a professional if you feel like you've hit a legal gray area by accidentally finding a valuable private key.
In 2019 there was a Kickstarter project launched to design a Bitcoin puzzle box for playing cards. It's not really a Bitcoin puzzle, but an artistic rendition of something resembling one.