How to Secure Your Bitcoins Now and After Death
Did you know that an obscene number of digital assets are lost in the crypto world when holders of those coins pass on? According to a 2017 research by Chainalysis, around 25% of bitcoins cannot be retrieved after holders’ deaths. The fact that BTC is on the verge of a parabolic phase, and with only 2.5 million bitcoins left to be mined, it’s shocking to have such a high percentage of digital coins to vanish just like that. So, what can we do about these disturbing stats?
For a while, the cryptoverse had intensely been associated with Millennials (Gen Y) and the older Generation Z cohort batch. That means, for such a considerably young generation, no efforts have been made to account for the succession of their digital assets since their time of demise has never been projected to be soon. But then, since the perks of cryptocurrencies have caught on, older folks (Gen X) such as Elon Musk, a billionaire, a renowned Engineer, and an entrepreneur, have publicly shown their love for crypto.
For such a diverse demographic, factors contributing to a high life expectancy are difficult to monitor. Isn’t it time for the crypto community to consider safer alternatives in ensuring someone is in succession to inherit their coins?
However, before we look at how you can secure your crypto funds even after death, let’s see what you can do while still alive.
Current Digital Wallet Safety Mechanisms
Ever heard of “Not your keys, not your coins”? This is a common phrase that stresses the significance of private keys. In case you weren’t aware, wallets normally manage your public keys, but very few will give you full control of private keys for those coins. Whatever the case, here are a few pointers you can jot down for securing the contents of your wallet.
Avoid Public WiFi
Users should refrain from utilizing public WiFi because the connections are prone to cyber-attacks. Instead, mask every internet activity with an appropriate VPN.
Hardware devices are deemed to be the best option for storing your private keys, unlike hot wallets, which rely on the internet to operate.
Open Several Accounts
Users can create multiple accounts that can protect their crypto portfolio transactions from any form of threat. The good thing about crypto wallets is that there is no limited number of accounts one can create.
Challenges of Digital Assets Management Tools
The Cost of Administering
On occasion, crypto management services from the asset providers may be expensive for most users. Despite the lucrative rewards, implementing a costly asset management strategy can be strenuous in the long run. In this case, users should DYOR for the best platform with the right features that suit their needs.
Monitoring Usability Levels
The number of assets that one owns may be manifold, making it challenging to manage and track each asset. Without a diversified platform to monitor and update assets’ usability standards, the coins can end up misplaced or in the wrong hands.
Metadata features give the provider easy access to all assets listed on the platform. Therefore a digital asset management system should be arranged systematically, group the assets into keywords that are easy to find. If you fail to consider metadata, it will be hard for you to locate your assets since that information is usually buried in thousands of files.
The Ownership Question
A practical asset management system needs someone who can oversee the whole system. Operating on a system that runs through an owner ensures that the asset management protocol is convenient for every user. However, users refrain from this responsibility as it needs sophisticated procedures when monitoring and managing.
How Various Crypto Institutions Implement Security
This is one of the few platforms that protect trader’s funds by storing funds in an offline cold wallet. Most importantly, Gemini thrives in adhering to all the guidelines set up by regulators. Gemini’s compliance to crypto watchdog rules puts them in front as one of the exchanges credible to ignite mainstream adoption of cryptocurrencies.
Voyager is also another exchange platform that secures its users from fraud and keeps the digital assets offline. The platform is compliant with all government-related processes that guarantee the safety of users’ personal information.
Celsius adopts the Know Your Customer feature, which solves issues concerning money laundering and financial crimes. The exchange works hand in hand with Onfido, a prominent company that processes KYC information. Among the documents needed for KYC, verifications include a national ID, a driver’s license, or a valid passport.
Despite the recent discrepancies, Coinbase has been regarded as one of the most secure crypto exchange platforms. The exchange stores a significant amount of investors’ funds offline – away from the internet. Moreover, its wallets and private keys are heavily guarded with AES-256 encryption, and a mandatory 2FA process is followed before opening an account.
Is There Any Viable Process of Setting Up a Crypto-Will
In the same way, even after billions of years, we’ve only explored less than 10% of the ocean; it’s the same way advancements on the blockchain have been so far. Similarly, no designated ledger lays out a plan to safely hand on digital coins in case of demise. Nonetheless, it is possible to pass on digital assets to your kin after death.
The process starts typically with indicating the type of cryptocurrency that the deceased invested in and their precise location. After that, show the wallet and exchange details that hold your digital coin along with the device used, whether it’s a mobile phone or a laptop.
The only risk inevitable is the issue of password logins. To avoid such a scenario, the deceased can formulate a separate document known as a memorandum, which will carry every private and sensitive detail like the login information. Remember, the memorandum information does not go to the public blockchain; therefore, it can be updated as days go by. Furthermore, a memorandum can be linked with the crypto will or left with authorized executors for safekeeping.
Since the crypto space is filled with newbies, the deceased should 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 loved ones have to easily access the coins to avoid frustrations during the retrieval process.
All in all, it all comes to the users alerting their friends and families (beneficiaries) about the cryptocurrencies in store for them and where and how to access the coins upon death.
No Bitcoins Left Behind…
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.
Brandon Na, the Co-Founder of Whenileave.com, when asked to comment on the matter, he had this to say:
Too many people leave our world unprepared. Many of us are procrastinators. However, the day you die, you will no longer be able to regret having waited, but your family will. And they may suffer as a result of you simply waiting too long. More close to two decades, we’ve been thinking, strategizing, and working on products that can solve this problem. It’s not an easy one, but I’m so glad we have some incredible entrepreneurs out there finally working on this most interesting problem.
Like other tangible assets–like cars and houses–cryptocurrencies are equally transferable after an individual’s passing. While there might have been limited options to ensure a successful inheritance of digital assets in the past, times are changing. Platforms such as safehaven.io have gone an extra mile to cover their users, including the time of their demise.
Should crypto exchanges and wallets set up a definite plan for crypto-wills? The answer is a big YES. Crypto is no longer for the Millennials and Gen Z folks. The Gen X cohort has also joined the party. More often than not, the time of death is something no one can be sure about. Therefore, we ought to be prepared for such moments. If you are a holder with a beefed-up 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.