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By Nethanael Payne
Remember Gerald Cotten, the QuadrigaCX founder? His 2018 passing locked away over $250 million in crypto, a stark reminder to plan for your digital assets. Back in Bitcoin's early days (2013), questions about inheriting crypto surfaced on forums. Today, those questions remain.
The challenge? Accessing crypto after someone's passing can be a nightmare without proper instructions in a secure location (like a will) or if your wealth sits on centralized exchanges (where you don't directly control private keys). Debbie Wooten's story in 2018 is a case in point. After her husband's passing, she discovered a crypto account linked to his old work phone – a dead end. She eventually recovered it, but only after a lengthy probate battle.
A recent Willful study found a shocking 44% of Canadians have no clue what happens to crypto after death. Many assume it's like traditional assets, automatically transferred. The reality, as highlighted by Cointelegraph, Dailycoin, and even CBS News, is far more complex.
Another chilling example: Mathew Mellon's lost crypto fortune. His heirs can't access his estimated $500 million due to a lack of proper access protocols.
Fast forward a decade from that early Bitcoin StackExchange post. The question remains: how do we secure our hard-earned crypto for the future?
The crypto landscape has evolved, and so too should our methods for protecting this asset class. Decentralized smart contracts, as suggested by Dailycoin in 2023, offer promising solutions for "dead wallets."
Untangling the Web: Challenges of Crypto Inheritance
Currently, inheriting crypto is a complex process riddled with hurdles:
- Technical Knowledge Gap: Many beneficiaries lack the expertise to manage private keys, wallets, and exchanges. It's intimidating navigating unfamiliar territory.Â
- Security Concerns: Losing a private key is like losing your entire crypto portfolio. Accidental deletion or loss creates significant risk for beneficiaries.
- Legal Uncertainties: Regulations surrounding crypto inheritance are still evolving. Legal complexities can add frustration and delays.
Current Solutions: A Treasure Map Approach (but with More Steps!)
Let's explore current options for securing our crypto for future eventualities:
- Sharing Private Keys: We can simply share private keys with loved ones, essentially giving them the map to the treasure.
- Inventory Creation: An up-to-date inventory of all crypto holdings, ideally stored with the "map," is crucial. Mention backup wallets and safe deposit box locations, if applicable.
- Will and Trust Considerations: Only 33% of Americans have a will! It's time to create one, naming beneficiaries, setting up a trust (potentially lawyer-administered), and outlining asset distribution. Here's the kicker: can you write clear instructions for accessing everything?
We need a better, more technical solution for this knowledge-heavy problem. As crypto adoption accelerates, how many lost coins will we tolerate? How much wealth will vanish before we find solutions? Hopefully, it happens before someone loses a million-dollar bag 'yoloing' somewhere on a wild vacation!
Author Bio
Nethanael Payne, founder and CEO of Inheritly (http://www.inheritly.life) Â is an ex English prof and software engineer who has been involved with BTC and cryptos prior to the crash of Mt. Gox. A crypto enthusiast, his interest is on increasing utility, and real-world application of blockchain technology to speed further serious adoption for everyday people.
Disclaimer
The views and opinions expressed in this article are solely those of the authors and do not reflect the views of Bitcoin Insider. Every investment and trading move involves risk - this is especially true for cryptocurrencies given their volatility. We strongly advise our readers to conduct their own research when making a decision.