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What Happens To Your Cryptocurrency When You Die? - Business - Nairaland

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What Happens To Your Cryptocurrency When You Die? by TheSparrow: 11:11pm On Jul 19
Hello. I read this article and found it very enlightening. Thought to share with you��


Earlier this year, Ryan Klein had a near-death experience.

While cleaning out a gutter at his California home, the 32-year-old IT professional took a misstep and tumbled 10 feet off a ladder into a fortuitously placed wintergreen shrub.

Sprawled out on the ground, gazing up at the cerulean sky, a terrifying thought crossed his mind.

“I realized that my wife didn’t have access to my cryptocurrency,” he told The Hustle. “If I’d died that day, that money would’ve just disappeared.”

The following weekend, Klein took action: He wrote down his private keys and account passwords, typed up detailed instructions on how to access his holdings (~$77k worth of various coins), and entombed the information in a small safe in his closet.

Klein is one of a growing number of crypto investors who are beginning to give serious thought to the afterlife of their bitcoin.


If Klein had died that day, it’s likely that one of two things would’ve happened to his assets:

If he had a will, they’d be distributed to whomever he legally designated to be his successor(s).
If he didn’t have a will, a decedent (typically a spouse) would apply for probate, and then his state would’ve designated an administrator to dole them out according to a formula.

A will stipulates who gets what, but it generally doesn’t include a comprehensive list of a deceased person’s assets. It’s the job of an executor — someone designated in a will, or appointed by a court — to track everything down.

Traditional investments (say, a savings account at a bank) are relatively easy to find, access, and delegate with a death certificate and other legal documentation.

But crypto poses some unique challenges.

Unlike traditional bank accounts, which are registered under a legal name and subject to oversight, digital assets like Bitcoin and NFTs don’t have a central regulatory authority.

Crypto investors maintain their own assets using digital wallets that are only accessible via a password or a private key — a 256-bit long string of alphanumeric characters that is only known to the account holder.

Without these private keys, there is little hope of heirs ever accessing a dead loved one’s crypto holdings.

Had Klein died without sharing his private key with his wife, it’s likely his crypto holdings would’ve been stuck in permanent purgatory on the blockchain.

By one estimate, ~20% of all bitcoins are “lost,” meaning the wallets containing them haven’t been accessed in 5+ years. This works out to ~3.7m bitcoin, or ~$140B in capital (as of publication) — and that doesn’t include the 10k+ other cryptocurrencies on the market.

A significant percentage of this lost crypto is thought to be the result of investors dying without leaving behind a pathway of access to heirs.

There have been a few high-profile cases of this nightmare situation:

1. In 2018, Gerald Cotten, the CEO of the crypto exchange Quadriga, unexpectedly died at age 30, allegedly taking with him the private keys to $250m worth of his clients’ cryptocurrency.

2. Also in 2018, Mathew Mellon, a businessman who’d turned a $2m investment in the cryptocurrency Ripple into a reported $500m+, died without telling anyone where his private keys were stored. His wallets have yet to be located.

3. In 2013, a 26-year-old Bitcoin miner named Matthew Moody died in a plane crash, leaving behind no way to access thousands of dollars’ worth of crypto. Years later, his father is still trying to recover the funds.

Despite these tales, many crypto investors haven’t given much thought to the afterlife of their bitcoin.

In a survey of cryptocurrency investors conducted by The Hustle, nearly 40% of respondents reported having no plan in place to pass on their cryptocurrency to an heir.

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Re: What Happens To Your Cryptocurrency When You Die? by MrBrownJay1(m): 2:43am On Jul 20
if you die and nobody knows how to access your coins then you are shiit out of luck. havent you heard of Stefan Thomas, the dude who has lost his wallet access... wallet containing $321M, and there is absolutely NOTHING he can do about it.
Re: What Happens To Your Cryptocurrency When You Die? by SaintUlot: 5:38am On Jul 20
MrBrownJay1:
if you die and nobody knows how to access your coins then you are shiit out of luck. havent you heard of Stefan Thomas, the dude who has lost his wallet access... wallet containing $321M, and there is absolutely NOTHING he can do about it.

Will you feel safe disclosing your private keys in your will? If someone withdraw what you have in your wallet, you can't track the person.
Re: What Happens To Your Cryptocurrency When You Die? by TheSparrow: 5:46am On Jul 20
MrBrownJay1:
if you die and nobody knows how to access your coins then you are shiit out of luck. havent you heard of Stefan Thomas, the dude who has lost his wallet access... wallet containing $321M, and there is absolutely NOTHING he can do about it.

Hmmm
Re: What Happens To Your Cryptocurrency When You Die? by TheSparrow: 7:38am On Jul 20
SaintUlot:


Will you feel safe disclosing your private keys in your will? If someone withdraw what you have in your wallet, you can't track the person.

I still believe that cryptocurrency investors should make a secured pathway of access for their cryptocurrency assets to at least their next of kin.

Imagine when you pour in most of your wealth in crypto, and death, the inevitable, happens, you leave behind a family, wife and kids, who do not and will never have access to that wealth.
Re: What Happens To Your Cryptocurrency When You Die? by SaintUlot: 8:32am On Jul 20
TheSparrow:


I still believe that cryptocurrency investors should make a secured pathway of access for their cryptocurrency assets to at least their next of kin.

Imagine when you pour in most of your wealth in crypto, and death, the inevitable, happens, you leave behind a family, wife and kids, who do not and will never have access to that wealth.

So what's your suggestion on how to go about it?
Re: What Happens To Your Cryptocurrency When You Die? by MrBrownJay1(m): 10:05am On Jul 20
SaintUlot:
Will you feel safe disclosing your private keys in your will? If someone withdraw what you have in your wallet, you can't track the person.

a will that a lawyer will draft (aka lawyer could just copy the password and go away with the cash)?! a will that anyone at that law firm could have access to?! nah, just make sure you give all your password to that trusted friend in your life (and if you aint got that kinda friend in your life, then blame yourself!)

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