This is an opinion edit by Prasad Prabhakaran, COO and co-founder of HexaWallet, said:
Over time, an estimated 4 million bitcoins have been lost to currently inaccessible wallets. It is unknown how many of these coins belonged to his HODLer who died without sharing access to his wallet with anyone else.
If you manage Bitcoin Keys, you’ll need to devise a strategy for transferring your assets. Otherwise, you will lose your bitcoin forever.
Bitcoin inheritance is still not well understood as most Bitcoin holders are young and as a result don’t think much about death or inheritance.
in this way Cointelegraph article ‘ said. 2020 survey Nearly 90% of cryptocurrency owners worry about what happens to their cryptocurrency after they die, according to the Cremation Institute. Additionally, despite the high level of concern, a cryptocurrency holder is reported to be four times more likely to use a will for inheritance than a non-cryptocurrency investor. ”
If Bitcoin is a new investment for you, it’s important to plan for the long term. This includes considering what happens to Bitcoin after your death.
“If you don’t make a copy of that key and keep it in a safe place where someone you trust can find it and know what to do with it, the wealth you’ve accumulated in cryptocurrency will be lost. Sit there.“— Matthew McClintocka lawyer focused on Bitcoin real estate planning.
What are the current options for bitcoin inheritance?
- do nothing.
- DIY.
- storage exchange.
- Expensive closed solution.
- A poorly constructed cryptocurrency solution with token incentives.
do nothing
Due to its decentralized nature, Bitcoin has special security issues that do not apply to assets under the control of centralized institutions. Although Bitcoin is digital money, it should be viewed as a physical item of value, such as diamonds, precious metals, or cash. Anyone with access to Bitcoin can use it for better or worse. In contrast, if you die without giving anyone access to your keys, your Bitcoin is probably lost forever.
self made
One option is a DIY storage system such as the Glacier protocol. These non-commercial alternatives have the distinct advantage of being completely private. No one needs to know that you own Bitcoin or set up a storage system.
The downside is ease of use and guidance. Glacier, for example, took her 8 hours to set up and 4 hours to withdraw her during initial testing. According to the official site. With practice you can cut this time in half, but each trade still takes several hours. Glacier requires the purchase of approximately $600 in equipment and a painstaking process that includes changing laptop hardware, using command-line interfaces, and installing an operating system.
It’s so technical that we are forced to marry only other tech geeks.
storage exchange
Thanks to Bitcoin, people’s money is in their hands! Since you manage your private keys and Bitcoin is stored on a public blockchain, you don’t need to rely on financial institutions to get your funds. Bitcoiners claim to be their own bank or even “self-sovereign” because they have full control over the currency.
For this reason, a controlled succession like a custodial exchange undermines Bitcoin’s liberal underpinnings. If you want someone else to transfer your bitcoins after your death, they will need to trust your financial information. When you access bitcoin through an online exchange like Coinbase, you are relying on giving the keys to that company and having its staff give bitcoin to heirs when requested.
expensive solution
Some organizations essentially allow their customers to lock their bitcoin keys inside multiple layers of other private keys and distribute them to other signers. While the technology aims to make bitcoin inheritance easier, it can also lead to more complex processes such as the beneficiary’s girlfriend’s K YC. place.
Crypto Solutions with Token Incentives
“Use DeFi apps to securely manage, store and transfer your Bitcoin…even after you are gone.”
Doesn’t this sound like a scam to you? We’re not that bad, are we?
Overview
Overall, there may be individual differences in how Bitcoin HODLers carry out their intentions after death. While some may choose to entrust their funds and will to institutions, others prefer to follow the decentralized route and self-custody their money while developing their own succession strategies.
Bitcoin HODLers deserve better solutions to protect their Bitcoins for their loved ones, and security shouldn’t come at the expense of privacy. I need a solution that is easy to set up and maintain and supports multiple trusted hardware signers in an air-gapped and/or multisig fashion.
Ultimately, it is important to have a structure in place that allows beneficiaries to access their Bitcoin assets in the event of the user’s death.
Money that might change your life isn’t really life-changing if you can’t spend it.
This is a guest post by Prasad Prabhakaran. Opinions expressed are entirely his own and do not necessarily reflect those of his BTC Inc. or Bitcoin Magazine.
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