The recent lockout in the Canadian cryptocurrency exchange QuadrigaCX, should raise the question about how safe is data in blockchain? It is known that fundamentally individual wallets and accounts held in public blockchain are safe from hackers. One of the key reasons private data is safe is because it is protected by private key. This key is only known to the account or the digital wallet owner. What happens when the same type of private key also protects accounts that include public investors as is the case with QuadrigaCX exchange?
In the scenario that is unfolding in QuadrigaCX case, when that private key is known to only one person and that person dies or becomes incapacitated, the consequences are severe. What this indicates is obvious. Technology alone is not sufficient. There is a need for an external management process which ensures that in cases like QuadrigaCX, critical data can be accessed. Quadriga scenario is not unique. This could have been any number of scenarios where blockchain technology is used to create new products, manage intelectuall property, manage medical research and the list goes on. The account or digital wallet owner/keeper does not need die. There are many ways where the individual owners can create havoc with the data they have stored in their account or digital wallet. An external management process that ensures that critical data can be recovered is crucial for blockchain based solutions is essential. For blockchain to reach mass adoption in business, this weakness must be addressed by both the technology and business processes.