Blockchain technology has enabled a completely new asset class, with bitcoin having kick-started a decentralised revolution that is only beginning. Many of the advantages of cryptocurrencies over fiat currencies include lightning fast transactions, anonymity, censorship resistance, no need for third-party or authorities, and very close-to-zero fees.

But with great assets comes great responsibility. Some of these very advantages can be a double-edged sword, as doing away with custodians means individuals take benefits and risks into their own hands. In particular, dark-minded people’s favourite features, anonymity and censorship resistance, can create certain complications in the case of an owner’s unexpected death.

We’ve already written about how mishaps or mistakes have resulted in millions of bitcoins lost forever. As a result of one Matthew Mellon’s death alone, around $500M in crypto have been lost. What share of the circulating supply is forever lost due to unexpected death is unknown, but with a new crypto summer gaining momentum, the value of this number is sure not getting smaller.

Despite the regulatory uncertainty that still surrounds cryptocurrencies in many countries, various ways to avoid such an unlucky scenario exist already. That is, so long as you actually plan before your death.

Scenario #1: do nothing and then die

The worst scenario for everyone (including the deceased), and unfortunately still quite a common one. The case of Matthew Mellon proves that if you don’t prepare accordingly for your eternal sleep, your bitcoins will follow you like the chariots, lamps and vases stacked in the tomb of Tutankhamun; a pointless waste.

Even with the world’s combined computing power today, it’s nearly impossible to brute-force a private key without wasting a few lifetimes. There have been hacks of exchanges in the past, like the notorious Mt.Gox heist, but no one (at least publicly) has yet managed to hack a cryptographic private key by brute-forcing it.

If your recklessness results in your beneficiaries not having access to your key, their only hope would be that by the time of your unexpected demise quantum computers will be strong enough to solve Shor’s Algorithm.

According to the most optimistic calculations, quantum computers with 3000 qubits (theoretically capable of cracking it) may be around in just a couple of years. However, these are merely guesses, as it still might take decades. And even if it does happen, there are no guarantees - quantum-resistant cryptography is a hot topic, with developments that may invalidate the whole thing.

All in all, try to avoid this scenario as much as possible.

Scenario #2: pass on your keys before passing away

The simplest scenario of all. Find a person you trust and hand them your private key so when it’s time to meet your ancestors, this trusted person will be able to access your cryptocurrency stash.

There is one (potentially major) flaw in this plan: finding a person that you actually trust. This means trusting that they won’t just steal your coins before you die AND that they know enough about crypto that they won’t just lose it all.

That’s easier said than done, as money is known to turn even close family members against each other. Also, at least while crypto UX still resembles rocket science, handing your private keys to that tech-averse cousin might be a bad idea.

Plus, what happens if the person dies at the same time as you?

If you’re a crypto whale, you’d better be extra vigilant and think ahead.

Scenario #3: split the key amongst many heirs

An alternative to hedge against the risks of the second scenario, this option solves the problem of having to trust a single individual and putting all your eggs in one basket. Following your death, the people you have provided with parts of your private key can come together and have a great farewell party with your bitcoins. Sounds good, no?

The advantages are obvious, as no single piece can be used to access the actual key. You spread the risk and won’t have to worry about one of the people you have given part of the key breaking bad and going to Mexico with your life’s savings. You’d have to have everyone cooperate to take your stash before the time. And let’s face it, if your whole family conspires against you, you probably deserved it in the first place.

Unfortunately this has also a couple of drawbacks. The first has to do with splitting up the key. Various algorithms exist which allow you to break the 256-bit key in two or more pieces. The more the merrier since a potential attacker will have to find them all and hack them one by one in order to access your bitcoin, right?

The reality is different as “breaking” a key will result in making it more vulnerable to hacks. The more pieces are known to anyone trying to steal from you, the easier it is to brute-force it. And it’s not like “half the key, half the time” easier. Each known bit exponentially reduces the time by a factor of two, potentially leading to actually hack-able time frames.

Moreover, another implication has to do with your heirs coming together to share the inheritance fairly. You don’t need to be Michael Jackson or J. Howard Marshall so that there are disputes over your inheritance. Leaving behind even a single bedroom flat in downtown nowhere can result in the heirs clashing in court.

Imagine the prize being a 100 BTC wallet and one of the beneficiaries having a veto power over the others. So if you are after this option, try splitting the key among collaborative and altruistic people.

Scenario #4: custodians and trusted third parties

If a third party custodian (like an exchange) is holding your coins, they will have their own internal policy for the case of death. Most likely they will require a death certificate, proof of authorisation, or both so that your heirs can inherit your holdings.

Using a reputable end-of-life middleman, like a solicitor or notary, is the time-tested traditional approach. It’s been the go-to solution for centuries, and it can potentially be a straightforward way for your beneficiaries to access your coins. All you need is to find an executor get your will done, including your digital belongings.

But there are some drawbacks from relying on the legal system.

For exchanges and other custodians, legal evidence might be needed to be presented before a court of law - which for global services can quickly escalate into a big headache. Documents may need to be translated and validated, depending on jurisdictions. Your heirs may even need to hire a local attorney. So make sure to read carefully the terms and conditions before choosing to leave your holdings in the hands of these services.

Having a will might make it less painful, but involving a third party and going through the courts can have other unforeseen consequences.

In many legal systems, with the British one home to the most famous case, a will or other documents that can be presented in a court of law are considered public documents and anyone can access them. Therefore, be very careful not to mention what your private key is or where it is located as in that case, as your crypto assets may end up in someone else’s wallet.

Also, it may not be exactly easy to find an executor that is familiar with cryptocurrencies, so watch out.

Scenario #5: smart contract inheritance

Luckily technology is here to help. Keeping true to the blockchain ethos, some solutions offer a more trustless path.

TrustVerse, an innovative AI wealth management and digital asset planning protocol, is one such solution. It uses smart contracts to facilitate inheritance while still maintaining some of the legal requirements. Thanks to this combination of smart contracts and an oracle, TrustVerse offers a life scheduling services that contacts your beneficiaries when you haven’t been active for a while. It can be used not just for your coins but also your emails, online storage accounts and websites among others.

In order to prevent fraud and identity theft, TrusteVerse leverages a Proof of Death consensus solution. When all legal conditions are met the smart contract will be executed and your digital belongings will be passed to the designators of your choice - execution is guaranteed.

But one of the most interesting solutions created so far is Last Will, an open-source solution created by Karol Trzeszczkowski and introduced via the Reddit bitcoin community. Its codebase is hosted on Github can be reviewed by anyone. Last Will creates time-locked smart contracts that enable beneficiaries to claim the inheritance after a given interval - unless the creator checks in and resets the clock to prove they are alive.

To create a smart contract using Last Will you simply have to name a beneficiary, or beneficiaries, entering their cold wallet address. They don’t even have to know anything about it unless they choose to verify it. Then you just set the amount you wish them to inherit - and that’s it.

Every six months you will have to refresh your contract, otherwise Last Will shall assume you met the creator and will contact them to receive the inheritance. Last Will looks quite promising, but so far it only works for bitcoin cash.

There are many other similar ideas out there, both being built and under development. Since the whole concept of inheriting digital assets is fairly new, we advise you to tread carefully, as most solutions have not been fully tested in the wild. As time goes by and cryptocurrencies become more widespread, new and better products will appear while the existing ones improve.


Human beings are strange creatures. Even though death is the only certain part of life, we tend to believe that somehow we’ll manage to live forever (or at least die of very old age).

Granted, thanks to technological advances in medicine, 73.3% of the male population and 81% of the female population will live to be above 65 and the trend is going up. Nevertheless, as our very own existence is based on risk, nothing is ever certain. We’re always one slip-in-the-shower away from an unexpected end. So wish for the best, but plan for the worst.

If you read the article you know by now what you can do so that your family or friends can access your bitcoins after your demise. So if you haven’t already, pull up your socks and prepare your bitcoins for your death. Or at least give it some thought.

Mar 1, 2020
Crypto 101

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