The value of our digital belongings is starting to overlap with the value of our physical goods. An example is the ever-growing popularity of cryptocurrencies such as Bitcoin, Litecoin, Ethereum, etc.
To sum it up cryptocurrency is a decentralized, paperless currency based on a heavily cryptographed computer algorithm called blockchain technology. Like real money you can use it buy, sell, donate and invest in things anywhere you want as long as it’s accepted in the store or digital store you intend to do those things.
Blockchain and Security
The blockchain is basically a data structure algorithm created to store big chunks of data in a decentralized manner. This means that data doesn’t rely on other data one to exist, but at the same time each keeps a cryptographic record of other data and timestamp of its creation. By design, this leads to a safer and modification resistant data structure. It’s very difficult for hackers or any ill-intentioned individuals to mess up with the records stored on this data structure algorithm. But the downside of this is recovery options.
Imagine the following scenario. Suppose you asked someone to bury all your fortune somewhere safe. But before you could get the burial location, he dies.
What happened to Quadriga’s Data Structure?
Shareholders of Quadriga CX, a Canadian cryptocurrency exchange service is experiencing this on a much much larger scale. Gerald Cotton is the CEO and co-founder of QuadrigaCX. He is also the only person who was responsible for managing the passwords of their bitcoin wallets. He passed away on Dec 9th, 2018. His death is a result of complications that occurred while traveling around India to open an orphanage for homeless and children in need. He was also said to have been battling Crohn’s disease. The companies bitcoin wallet funds have a value of around 190 million USD.
How will They Sort this Out?
Unfortunately, Security specialists hired by Quadriga failed to crack their accounts or regain access. Quadriga filed for creditor protection in the Supreme Court of Nova Scotia
According to Cotten’s wife, his death rendered the company totally unable to access their assets, as well as continue their operation.
One of Quadriga’s investors, Elvis Cavalic of Calgary states, “They’ve left us completely in the dark”. “We are preparing for the worst”.
As cryptocurrencies increase in popularity, stories like these may be coming out more frequently. Digital fortunes are lost as a result of someone passing away or losing the password or the hash generator of the wallet. These stories should come as a warning to us all about managing our respective cryptocurrency wallets.
Originally published on 71Republic
