What happens to your Bitcoin when you die?
Inherit your cryptocurrencies to the next generation.
As investing in cryptocurrencies becomes increasingly popular, long-term investors are increasingly concerned with the uncomfortable question: What happens to your Bitcoin (BTC) when you die?
According to a 2020 study by the Cremation Institute, nearly 90% of cryptocurrency owners are concerned about what will happen to their crypto after their passing. Furthermore, despite a high level of concern, cryptocurrency holders are four times less likely to use wills for inheritances than non-crypto investors.
As explained in their white paper, Bitcoin is a purely peer-to-peer version of electronic cash, allowing online payments to be sent directly from one party to another without going through a financial institution.
As a distributed network, Bitcoin does not have a central authority to control user funds, so no one but the owners can control their assets.
Consequently, each year millions of dollars in cryptocurrencies are lost due to the death of their owners. Crypto insurance firm Coincover estimates that around 4 million Bitcoin, or $ 68 billion, as of press time, is out of circulation after access was lost, with a large portion likely caused by death.
But this does not mean that cryptocurrencies like Bitcoin cannot be bequeathed and will inevitably be buried forever with the deceased owner. In fact, there are several ways that investors can bequeath their crypto to the next generation, but each method requires some decision-making and planning, as well as some general knowledge of how crypto works.
Share keys with trusted family members
Sharing keys with trusted family members is probably one of the easiest methods to transmit your cryptocurrencies. Some of the most prominent people in the crypto industry have publicly claimed that they use this method to ensure their crypto fortune is transmitted.
Hal Finney, an early Bitcoin supporter and recipient of BTC creator Satoshi Nakamoto’s first Bitcoin transaction, bequeathed his cryptocurrency holdings to his children simply by providing their keys. About a year before his death in 2014, Finney wrote: “Those discussions about the inheritance of your bitcoins are of more than academic interest. My bitcoins are stored in our safe deposit box, and my son and daughter are tech savvy. I think they are safe enough. I feel comfortable with my legacy. “
This practice of crypto inheritance is straightforward, but may not be suitable for everyone in the crypto community. This way of bequeathing Bitcoin could also be considered risky, as shared keys have a responsibility to keep those assets safe. If you choose this method, make sure your heirs are aware of the plan and some of the best practices for cryptocurrency security.
Some exchanges can unlock access to cryptocurrencies with a death certificate
Despite the fact that the Bitcoin network itself doesn’t care about things like inheritance, some cryptocurrency services allow relatives of a deceased customer to access their crypto assets. Coinbase, the leading U.S.-based wallet and cryptocurrency exchange service, for example, allows relatives to gain access to a family member’s assets after providing a series of documents including a death certificate and a last testament.
Coinbase users can also name a beneficiary on their Coinbase account. However, the procedure is not supported directly through Coinbase, but instead uses the services of an estate planning attorney.
A spokesperson for Binance, the world’s largest crypto exchange, told Cointelegraph that the company has similar policies for providing access to crypto beneficiaries, but did not elaborate on the process. “The beneficiary should contact customer service directly, where one of our agents can guide them through the process,” the representative said.
Cryptocurrency Inheritance Services: Is It Worth It?
There are also some projects that are dedicated to ensuring the inheritance of digital assets. For example, companies like Safe Haven, Casa, and TrustVerse are working on their own solutions that allow people to bequeath their crypto assets using blockchain technology and cryptocurrencies.
Officially launched in September, Safe Haven’s digital heritage platform, Inheriti, allows users to bequeath access not only to cryptocurrencies such as Bitcoin, but also to social network profiles.
Disclaimer: This press release is for informational purposes information does not constitute investment advice or an offer to invest. The views expressed in this article are those of the author and do not necessarily represent the views of infocoin, and should not be attributed to, Infocoin.