How do you ensure that investors‘ cryptocurrency arrives safely in the hands of the heirs?
As cryptocurrencies gain in popularity, long-term investors are increasingly thinking seriously about the most unpleasant question of all: What happens to your Bitcoins (BTC) when you die?
According to a study published in 2020 by the Cremation Institute, nearly 90% of cryptocurrency holders are concerned about what will happen to their crypts after death. Despite this, the probability that crypt holders will use wills for their inheritance is four times less than that of non-crypt investors.
As your white paper indicates, Bitcoin is a purely peer-to-peer version of electronic money, allowing you to make online payments directly between parties without going through a financial institution.
Being a distributed network, Immediate Edge has no central authority to control user funds, so no one outside of the owners has control over the assets.
As a result, millions of dollars in crypto are lost every year with the disappearance of the owners. The crypto insurance company Coincover estimates that about 4 million Bitcoins, equivalent to about 76 billion dollars at the time of writing, are no longer in circulation due to loss of access, with a good part probably caused by death.
But that doesn’t mean that cryptocoins like Bitcoin can’t be bequeathed and will inevitably be buried along with the deceased owners.
In fact, there are several ways in which investors can pass on their crypto to new generations, but each method requires decision making and planning, as well as a good deal of general knowledge about how cryptocurrency works.
Sharing keys with trusted family members
Sharing your keys with trusted family members is probably one of the easiest ways to pass on your crypto. Some of the best-known figures in the crypto industry have publicly stated that they use this method to ensure that their assets are passed on.
Hal Finney, one of Bitcoin’s first supporters and recipient of the first transaction from BTC creator Satoshi Nakamoto, left his crypto property to his children simply by providing them with the keys to it. About a year before his death in 2014, Finney explained:
„These discussions about passing on his Bitcoins go far beyond academic interest. My Bitcoins are stored in our safe deposit box, and my son and daughter are technology experts. I think they are quite safe. I feel comfortable with my legacy.“
This practice of bequeathing cryptos is simple but may not be suitable for everyone in the crypto community: it is a risky method, as shared keys have a responsibility to keep assets safe. You must therefore make sure that heirs are aware of the plan and have crypto security expertise.
Some exchanges may unlock access to crypto with a death certificate.
Although the Bitcoin network is not interested in things like inheritance, some crypto services allow family members of a deceased client to access their crypto assets. Coinbase, a leading U.S.-based crypto currency exchange and wallet service, for example, allows family members to gain access to a person’s assets after providing a series of documents, including a death certificate or will.
Coinbase users can also appoint an heir to their account. However, the procedure is not directly supported by Coinbase: you must necessarily rely on a lawyer for the succession process.
A spokesman for Binance, the world’s largest crypto currency exchange, explained to Cointelegraph that the company has similar policies to provide access to crypto beneficiaries, but without going into the process in detail. „The beneficiary must contact customer support directly, and one of our agents will guide him through the process,“ added the representative.
Crypto Inheritance Services: Is it worth it?
There are projects dedicated to securing the legacy of digital assets. For example, companies like Safe Haven, Home and TrustVerse are developing their own solutions that allow people to bequeath their crypto assets using blockchain technology and encryption.
Officially launched in September, Safe Haven’s digital legacy platform, Inheriti, allows users to pass on access not only to crypto assets like Bitcoin, but also to social media profiles like Facebook and Google+. Safe Haven CEO, Dujardin Logino, has pr