By the end of 2022, there may be one billion crypto users worldwide, up from 295 million in December 2021, according to a forecast by Crypto.com. Most cryptocurrency traders and HODLers are still in their teens and haven’t given death or inheritance any thought. Few people have a strategy to distribute their possessions to their loved ones after they pass away.
An estimated 4 million Bitcoin has been lost over time, sitting dormant in unreachable wallets. It’s assumed that a significant chunk of those Bitcoin belonged to HODLers who passed away without giving anyone access to their wallets. Some even contend that the 1 million Bitcoin created by Satoshi Nakamoto haven’t been touched in years because no one has access to them.
The Drawback Of Self-Sovereignty
With self-sovereignty in mind, cryptocurrencies like Bitcoin provide owners total control over their assets. The not-so-old proverb states, “Not your keys, not your coins.” Without a mediator, cryptocurrency places your wealth in your hands. Anyone with your public key can access the assets stored on the blockchain.
Your private keys—a long string of characters—serve as passwords. Your crypto is controlled by the person or thing who has access to your private keys. The private keys are irrecoverable once they are misplaced or forgotten.
Most wallets feature a 12- or 24-word recovery phrase that serves as a human-readable version of your private key to make things simpler for users. After you pass away, your loved ones won’t be able to access your crypto if they can’t find the private keys. Furthermore, there is a chance that they will steal all of your cryptocurrency before you pass away if you provide them with your login information while you are still alive. The problem is that.
Establishing A Plan
Most HODLers devise unique strategies to guarantee that their heirs inherit their assets when the time comes. Some people record the addresses of their wallets, their private keys, and their seed phrases on paper and store them in locked safes. Even though paper wallets are frequently used, they could be mistakenly thrown out as trash if they are not noticed for a while.
Others use blockchain products like Serenity Shield for their safety and well-being. Through its encrypted and entirely decentralized method, Serenity Shield enables users to build a virtual safe called an inheritance StrongBox. Inheriting cryptography and protecting your private keys from loss are two functions that StrongBox performs.
Due to their simplicity of use, centralized exchanges like Coinbase and Binance have become more well-known. For instance, Coinbase permits a family member to access a deceased relative’s account after providing the necessary paperwork, such as the last will and a death certificate.
Conclusion
It’s becoming more crucial for HODLers to make sure that their loved ones can access their private keys – and consequently, their crypto assets – after their passing due to the increased use of cryptocurrencies and users’ desire for self-custody.