Crypto inheritance: Are HOLDers doomed to rely on centralized options?
In the cryptocurrency industry, self-sovereignty is a basic principle: investors must rely on a trustless, decentralized network rather than a central body that has been known to devalue the holdings of others. However, inheritance is a flaw connected with self-sovereignty.
Over time, an estimated 4 million Bitcoin (BTC) has been misplaced and is now inaccessible wallets. It’s unclear how many of those coins belong to HOLDers who died without sharing their wallets with anybody else. Some speculate that Satoshi Nakamoto’s estimated $1 million Bitcoin fortune has remained untouchable because no one else had access to it.
According to a research done by the Crenation Institute in 2020, approximately 90% of cryptocurrency owners are concerned about their assets and what will happen to them once they die. Despite this, crypto investors were found to be four times less likely than non-crypto investors to use wills for inheritance.
However, the apparent lack of a solution does not appear to be generally explored. Johnny Lyu, CEO of crypto exchange KuCoin, told Cointelegraph that digital inheritance is still “poorly understood” because most crypto holders are young and hence aren’t thinking about death or inheritance.
Furthermore, we have not yet “come across a legislative precedent in this matter,” according to Lyu. As a result, there is a lack of “experience in settling inheritance conflicts, such as theft and return of bitcoins.” ” Crypto inheritance, according to Lyu, “comes down to giving relatives private keys.” He went on to say that private keys in a cold wallet, which is then stored in a safe and kept with a notary, can be used to manage it:
“If the owner does not wish to transfer the cryptocurrency before death, they might consider writing a will and an inventory of the contents that their heirs will require to unlock the wallet.”
Investors who want to pass on their riches must “address the problem of retaining anonymity until the heirs can come into their own,” according to the CEO. Transferring access credentials, on the other hand, can “risk the safety or anonymity” of holders, he admitted.
According to Lyu, the greatest crypto inheritance alternative is a flash disc with a “master password, which already contains account passwords,” produced by Germain notaries. The asset owner keeps the flash drive, but the notary has the master password, he explained.