The Immortal Blockchain Is Gravely Overlooked
When I say the immortal blockchain is gravely overlooked, I mean that literally!.
A couple of days ago, a friend of mine who is skeptical about cryptocurrency sent me this link. At first, I thought he was just trying to troll but when I kept coming across the news I realized it was true.
Apparently, Gerald Cotten the CEO of Canada's biggest crypto exchange Quadrigacx died last year and took the access keys to the company's cold wallets to the grave. His lone-wolf style of operation has resulted in the loss of over $180 million of investor funds. That's simply mind blowing.
The Company has been forced to file for bankruptcy and his wife has received many unsavoury comments.
So could this all have been avoided? Absolutely!
First and foremost, the whole point of cryptocurrency is decentralization - Untrusted Transactions. So no ONE person should be a middle-man, central figure or overseer. The CEO should've never been the sole holder of all those keys. Good business ethics dictates 5-9 people (preferably in different locations)) should form a ring- signature with a majority signing required to activate a transaction. This will prevent fraud and safeguard against an unplanned event such as death or a serious accident that may lead to disability.
Secondly, the CEO failed to plan ahead. Was it pride or paranoia? We can't say. But he obviously knew he wasn't going to live forever. So what has his plan for the access keys? This failure to put down safeguards has cost investors and traders millions of dollars and also effectively bankrupted the exchange company.
Are there practical solutions to this? Yes, there are. Eternitas for example is a Will-on-the-blockchain project that allows users to make wills using templates and execute them via smart contracts. If the CEO had saved the access keys in his will and dictated who would receive them in his demise (wife or trusted worker) then not only would he have saved the company and promoted investors confidence, but he would've also showcased the power of the blockchain to "live forever".
It's quite unfortunate that these steps were not taken. I hope other exchanges don't repeat the same mistake but quickly modify their business protocols.
Let me know your thoughts on the matter.