Death of Mcafee and Drowning Death of Bitcoin Billionaire: Lessons to Be Learned
Owning Bitcoins will not save you from death. We have to deal with the fact that we will die, but there is a little more to deal with if you own BTC. In contrast with other assets, the problem with BTC is that if you die and no one has the key to your BTC´s or wallet, your BTCs will be lost forever. What measures can you take to avoid losing your BTC when you would unexpectedly die?
According to a 2017 research by Chainanalysis, around 25% of bitcoins cannot be retrieved after holders’ deaths. This is a lot of inheritance lost to family or friends. If you store your BTC on a cold wallet, a private key secures access to your BTC. If you die and nobody has access to your private key, those BTCs will not be retrievable anymore. Furthermore, you can have your BTC stored in hot wallets and exchanges. If no one knows your passwords or other ways for access, these funds will also be lost in case of an unexpected death.
Crypto-will
Cold wallets and ledgers do not provide a possibility to pass your digital money after your death. The solve this problem, you can make up a will. This will needs to have the information of wallet and exchange details and how to access these (mobile phone, laptop). The tricky thing is, of course, the handling of passwords because you probably don´t want to give your beneficiaries access to your funds before you die.
To handle this problem, you can formulate a separate document, known as a memorandum; this will carry your private keys and your sensitive information like login information. This memorandum you can leave with an authorized executor for safe keeping, and make sure that it stays up to date. Leave a simple instruction manual on how to retrieve the digital coins. A guide should be as simple as possible, keeping in mind that your beneficiaries have to be able to easily access the coins to avoid frustrations during the retrieval process.
Online Solutions
Safehaven takes advantage of functionalities like the Trust Alliance Network and Escrow to safely transfer private keys together with all critical information to family members and other stated dependents. Safehaven is one of the rare platforms that give the user full control of their digital funds and, upon death, the protocol distributes the shares left behind equally as indicated on the Will.
The Future
Lightning’s has added relatively new features, one of those is; `keysend´ (formerly known as spontaneous payments). It is experimental, and it isn’t even described in the lightning specifications yet. But it does offer a way to send data (called `custom records´ in LND) along with a transaction. It might work like this: Imagine a user who wants to pass on a bitcoin (BTC) inheritance. That user would communicate with a `service,´ pushing a `button´ that would send a message every week to signify that the user is still alive. If the button isn’t pressed one week, it is assumed the bitcoin user is dead or incapacitated, and it’s time for the bitcoin to be passed on, at which point the service automatically dispenses a `secret,´ which can be used to retrieve the crypto. This is still experimental and probably will not happen in the short term, but it shows the possibilities for the future.
Keep It Simple
If your crypto inheritance is not that big, there is also a very simple solution for the people who want to keep it simple. You can just leave a paper wallet tucked into your safe, which may not be the safest method, but it definitely is the most simple method.
Conclusion
Crypto exchanges and wallets should set up a definite plan for crypto-wills. Crypto is here to stay. More often than not, the time of death is something no one can be sure about. Therefore, we must be prepared for such moments. If you are a holder with a portfolio of various coins, you must set up a plan that makes sure your coins fall into the right hands by the time you are gone.
Interesting link:
Memento Mori: How To Live With Death
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