It was shown that the mechanism in The Box is empty, therefore does how the button mechanism exactly work? Does it mean it's fake?
As mentioned at the beginning of the movie, the button mechanism has been constructed as a device of unknown purpose and its design specifications were confirmed by Mars project. However we can assume already that the main purpose of the button (The Box) is for testing subjects and their free will (as part of the bigger test if humanity is worthy of salvation or extermination).
What is made of?
The box is made of anodised aluminum and hand-blown glass dome under which the button unit is placed which is opened only by the key. Its design is complex and probably expensive in making. The box appears empty to deceive test subjects and disguise micro-technology.
How does it work?
The button is using micro-technology to test free will of the subjects under 40 (happily married with a single child). Upon depression of button (by mother or father) the surface memory of button collects sub-atomic data and the transmission occurs upon spring release by anodized aluminum button collar. Then button unit mechanism becomes inactive after single push of button and it needs to be reprogrammed for another use. It's exactly unknown what kind of data is transmitted and how does it work exactly.
The button unit needs to be reprogrammed each time accordingly and when it's pushed, then according to his constructor, somebody will die. And the person who pushes it is offered the reward. There wasn't only one device constructed, but there were many of them.
More technical information about The Box we can find in its technical specification which was described in classified CIA document:
C.B.T. Human Resource Exploitation Manual - July 1976 - Committee on Behavioral Technology (COBT C.B.T - 7039-58 - Section 1 - Abstracts)
TEST SUBJECTS AND FREE WILL
BUTTON UNIT MECHANISM
Plate 31 Button unit mechanism appears empty to deceive test subjects and disguise micro-technology.
Plate 32a. Sub-atomic data transmission occurs upon depression of button by mother or father only.
Plate 32b. Button unit mechanism becomes inactive after single push of button.
Plate 33 Surface memory of button collects sub-atomic data.
Plate 34-36 Data transmission occurs upon spring release by anodized aluminum button collar.
Some funny way of explaining how the button works:
Image credits: filmiveeb.