What Happens to Your Crypto When You Die?
Market Meditations | September 14, 2021
? Dead Man’s Switch
“Where’s my money? Where’s everyone’s money?”
☠️ Hidden in Plain Sight
Trustless systems are a double-edged sword: on the one hand they provide you maximum security as only you can access your assets, but that responsibility comes at a price. While there are some who would rather take their crypto to the grave than hand over their keys, many others want to ensure loved ones can locate, access and extract their store of value when they pass to the other side. And to do that requires some preparation, as:
- According to some estimates, more than 3 million Bitcoin are considered lost or inaccessible, with a significant number assumed to be due to holders dying without leaving a trace
- According to a survey by The Hustle, only 44% of cryptocurrency investors have a will, and only 22% of those include their crypto assets
? Coffin Up
If you do want people to find your hidden stash they’re going to need some clues. Here are some things you can do:
- Keep a list of the location and/or addresses of all of your crypto holdings, so there is a starting point. Include URLs and usernames, but don’t keep your passwords or keys in the same place
- Arrange a ‘Dead man’s switch’, which is based on a smart contract that sends your chosen recipient the ‘secret information’ when you fail to respond to a regular message.
- Create a trust or assign a digital executor, such as Casa or Clocr, that specialises in the inheritance of digital assets and will work within the existing legal framework of your country.
?☠️ Vest in Peace
You’ll notice that there is an increasing degree of centralisation and/or security risk in the options above. Smart contracts and companies can be hacked and for most it may be a simpler first step to just keep an offline file at home.
So let’s assume you’ve done that – how will your relatives know how to convert your crypto back to fiat if they need to? With the rise of staking and yield farming, and the limited number of exchanges that allow fiat off-ramps, it’s probably a good idea to leave a guide.
Here at Market Meditations we’ve put together a simple Excel template that you can download and adapt as you see fit. It is based on a few simple questions:
- Where is my crypto stored?
- How is it currently being used?
- How do I move it to a fiat off-ramp?
Link ? here.
Why not take a look? And as always, we appreciate feedback from the community if you think this tool can be improved.