In a recent YouTube session, Bitcoin proponent and author of Mastering Bitcoin, Andreas Antonopoulos, said that people need to learn the “fundamental lesson” of not trusting third-party platforms while dealing with their cryptocurrencies. He further called the QuadrigaCX episode a perfect example of the risks associated with third-party custody over keys, and said,
“Not your keys, not your crypto”
While addressing a question about the troubled Canadian digital currency exchange QuadrigaCX, Antonopoulos said that users should be extremely vigilant while trusting third parties to hold their funds. He said,
“And this applies to any domain of money, but it applies especially to cryptocurrencies because it is easier to steal or lose bitcoin and other cryptocurrencies when you put it all in one place, and even more when the control is with just one person.”
Antonopoulos added that Bitcoin maintained its security through decentralization. Breaking into the cryptocurrency’s security protocol would require robbing thousands of people in the network, he said. This would further mean breaking into a thousand wallets located on various computers, mobile phones, desktops, and other hardware wallets.
If the entire process is centralized and one person holds the key for all the cryptos stored by thousands of people, it becomes highly susceptible as a single hack can result in a massive loss of funds, Antonopoulos added.
The author, however, admitted that this did not affect encryption and regulation. He is of the opinion that institutions such as these should be scrutinized and regularly audited, just like banking institutions.
Antonopoulos further added that there should be “contingency planning, disaster recovery and business continuity” after unfortunate events such as a Founder’s death, theft, or hacking. He had previously stated that regulating decentralized asset keys was unnecessary.
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Chayanika holds a Journalism degree and is currently working with AMBCrypto. She is inquisitive about everything that the Blockchain Technology has to offer.