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How death of cryptocurrency exchange boss has put millions out of reach

Ottawa, PTI | Updated : 06 February 2019, 01:11 PM

A Canadian cryptocurrency exchange was granted bankruptcy protection on Monday after its president took passwords for accounts containing 180 million Canadian dollar ($137 million) to his grave when he died suddenly. In a statement, QuadrigaCX said it sought protection from creditors after weeks of attempting to "locate and secure our very significant cryptocurrency reserves" following the death of its president Gerald Cotten. Nova Scotia's high court granted the application made by Cotten's widow Jennifer Robertson on behalf of the company, which has also stopped currency trading on its platform.

Quadriga CX had announced mid-January that Cotten died of complications from Crohn's disease on December 9 while volunteering at an orphanage in India. He was 30. In an affidavit, Robertson said the company has been unable to access an encrypted computer that he is believed to have used to store the cryptocurrencies owed to 115,000 users.

"I do not know the password or recovery key," Robertson said. "Despite repeated and diligent searches, I have not been able to find them written down anywhere." An expert brought in to try to crack the encryptions "has had some limited success in recovering a few coins and some information on Gerry's cell phones and other computer, but not yet from the main computer he used to conduct business," she added. The company's digital platform allows trading of Bitcoin, Litecoin and Ethereum.

Meanwhile, implementing Bitcoin at similar rates at which other technologies have been incorporated could alone produce enough emissions to raise global temperatures by two degrees Celsius as soon as 2033, according to a study.

"Bitcoin is a cryptocurrency with heavy hardware requirements, and this obviously translates into large electricity demands," said Randi Rollins, a master's student at the University of Hawaii at Manoa in the US.

Purchasing with Bitcoins and several other cryptocurrencies, which are forms of currency that exist digitally through encryption, requires large amounts of electricity, according to the study published in the journal Nature Climate Change.

Bitcoin purchases create transactions that are recorded and processed by a group of individuals referred to as miners. Miners group every Bitcoin transaction made during a specific timeframe into a block.

Blocks are then added to the chain, which is the public ledger, researchers said. The verification process by miners, who compete to decipher a computationally demanding proof-of-work in exchange for bitcoins, requires large amounts of electricity, they said.

The electricity requirements of Bitcoin have created considerable difficulties, and extensive online discussion, about where to put the facilities or rings that compute the proof-of-work of Bitcoin. A somewhat less discussed issue is the environmental impacts of producing all that electricity.

Researchers analysed information such as the power efficiency of computers used by Bitcoin mining, the geographic location of the miners who likely computed the Bitcoin, and the CO2 emissions of producing electricity in those countries. Based on the data, the researchers estimated that the use of Bitcoins in the year 2017 emitted 69 million metric tonnes of CO2.

Researchers also studied how other technologies have been adopted by society, and created scenarios to estimate the cumulative emissions of Bitcoin should it grow at the rate that other technologies have been incorporated.

The team found that if Bitcoin is incorporated, even at the slowest rate at which other technologies have been incorporated, its cumulative emissions will be enough to warm the planet above two degrees Celsius in just 22 years.

If incorporated at the average rate of other technologies, it is closer to 16 years, researchers said. "Currently, the emissions from transportation, housing and food are considered the main contributors to ongoing climate change. This research illustrates that Bitcoin should be added to this list," said Katie Taladay, a UH Manoa master's student.

"We cannot predict the future of Bitcoin, but if implemented at a rate even close to the slowest pace at which other technologies have been incorporated, it will spell very bad news for climate change and the people and species impacted by it," said Camilo Mora, an associate professor at UH Manoa.  

First Published: Wednesday, February 06, 2019 01:11 PM
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