Canadian crypto exchange QuadrigaCX says it cannot repay most of $190 million in client holdings after its 30-year-old founder Gerald Cotten, the only person who knew the passwords to its “cold storage,” unexpectedly died in India in December 2018, Coindesk reported on Friday.
Can you imagine a “non blockchain” person reading this? They must think that anyone using this non reversible blockchain technology is crazy, this could never happen in the current system!
I can try and explain it, based on my knowledge, but not like you were 5 years old sorry. They are claiming 190 million was stored in cold storage, with only the guy who died knowing the password. The password most likely decrypts the offline wallet, giving you access to the private keys, which is where the money sits. Cold storage is pretty much like putting 190 million dollars in a bank vault only you know the combo to. The company is saying that's what happened virtually, which is bullshit if true, and a shit way of doing business. If it was his personal money, fine... but you shouldn't be doing that with client holdings.... unless you're a shady business. It effects general crypto users that don't own their own private keys (example if you use an exchange like coinbase... you don't have your private keys, until you withdraw your crypto into your own wallet). People can't access their funds, because it's offline in cold storage, with the only person knowing the password to decrypt it 6 feet underground.