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Digital exchange loses $137M as founder takes passwords to the grave

23 points by saidajigumi 8y ago

miguelmota 8y ago
Not your keys, not your coins. Pretty irresponsible to not store the encryption key in something like a bank safety deposit box or sharded across multiple people that don't know each but come together like in the event of a death to reconstruct the key.
- gremlinsinc 8y ago
  what happens if 2 of those people die at same time?
  - iwalton3 8y ago
    Scheme like Shamir's Secret Sharing [1] allow you to split a secret between multiple people, and also set how many people are needed to reconstruct the secret. For instance, you could share it with 5 people, and only require 3 to reconstruct the secret. [1] http://point-at-infinity.org/ssss/ http://point-at-infinity.org/ssss/
    - gremlinsinc 8y ago
      yeah, like they would be smart enough to pull that off, they couldn't even plan for the worst. Unless his plan was take it all to the grave.
dawhizkid 8y ago
On a long enough horizon, every Bitcoin will be lost.
NikolaeVarius 8y ago
Maybe you CAN take it with you.
dang 8y ago
https://news.ycombinator.com/item?id=19060985 https://news.ycombinator.com/item?id=19060985
thinkingkong 8y ago
I signed up for QuadrigaCX but never transferred any funds through it. The process involved exchanging quite a bit of personal information and considering how they handled 137M worth of coins, I doubt they're treating anyones personal information with even a single spec of security.
chx 8y ago
First of all, I find this whole thing sad and hilarious -- I have been speaking up against calling it "investing in cryptocurrency" because a) it's gambling not investing b) it's not a currency. Nonetheless, this entire thing stinks. 1. Sudden death from Chron's disease is not unheard of https://www.ncbi.nlm.nih.gov/pubmed/9780667 https://www.ncbi.nlm.nih.gov/pubmed/9780667 but it's described as a "rare complication". 2. Where is the address of this cold storage so people can see the coins not moving since the alleged death? I know people are trying to figure out the address based on transactions from the hot wallet but if there is some tumbling involved it'll be hard / impossible. 3. In this 2015 article https://archive.is/Gw2x9 https://archive.is/Gw2x9 > Cotten, in turn, spoke to Quadriga’s security strengths, noting that the exchange uses multi-signature cold storage to secure bitcoin holdings. This directly contradicts the claim only he had the key.

23 points by saidajigumi 8y ago

Not your keys, not your coins. Pretty irresponsible to not store the encryption key in something like a bank safety deposit box or sharded across multiple people that don't know each but come together like in the event of a death to reconstruct the key.

gremlinsinc 8y ago
what happens if 2 of those people die at same time?
- iwalton3 8y ago
  Scheme like Shamir's Secret Sharing [1] allow you to split a secret between multiple people, and also set how many people are needed to reconstruct the secret. For instance, you could share it with 5 people, and only require 3 to reconstruct the secret. [1] http://point-at-infinity.org/ssss/ http://point-at-infinity.org/ssss/
  - gremlinsinc 8y ago
    yeah, like they would be smart enough to pull that off, they couldn't even plan for the worst. Unless his plan was take it all to the grave.

dawhizkid 8y ago

On a long enough horizon, every Bitcoin will be lost.

NikolaeVarius 8y ago

Maybe you CAN take it with you.

dang 8y ago

https://news.ycombinator.com/item?id=19060985 https://news.ycombinator.com/item?id=19060985

thinkingkong 8y ago

I signed up for QuadrigaCX but never transferred any funds through it. The process involved exchanging quite a bit of personal information and considering how they handled 137M worth of coins, I doubt they're treating anyones personal information with even a single spec of security.

chx 8y ago

First of all, I find this whole thing sad and hilarious -- I have been speaking up against calling it "investing in cryptocurrency" because a) it's gambling not investing b) it's not a currency. Nonetheless, this entire thing stinks. 1. Sudden death from Chron's disease is not unheard of https://www.ncbi.nlm.nih.gov/pubmed/9780667 https://www.ncbi.nlm.nih.gov/pubmed/9780667 but it's described as a "rare complication". 2. Where is the address of this cold storage so people can see the coins not moving since the alleged death? I know people are trying to figure out the address based on transactions from the hot wallet but if there is some tumbling involved it'll be hard / impossible. 3. In this 2015 article https://archive.is/Gw2x9 https://archive.is/Gw2x9 > Cotten, in turn, spoke to Quadriga’s security strengths, noting that the exchange uses multi-signature cold storage to secure bitcoin holdings. This directly contradicts the claim only he had the key.