“Not your keys? Not your coins.”
Wallet security is vital if one is to retain one’s cryptocurrency assets. Wallets, by virtue of their construction and keys required are extremely secure. The weak link in the chain is invariably human in that keys are exposed or left insecure or forgotten or wallets are lost or stolen. On the other hand sometimes it is necessary to make the wallet assets available to others such as in leaving a Bitcoin Inheritance.
Sometimes security itself can be the cause of a lost fortune as in the case of an individual who was killed in a plane crash in California. A 26 year old Matthew Moody left behind a small fortune in Bitcoin as he was one of the first to mine it in the early days. The father and family are now struggling to crack open his wallet and retrieve the small fortune recorded in his wallet.
“My son was actually one of the earliest people to mine it,” said the father, Michael Moody, in a Bloomberg interview recently. “He used his computer at home to mine Bitcoins when you actually could do it that way and he had a few we think.”
During his attempt to recover the cryptocurrency, Moody, a retired software engineer, discovered his son had used Blockchain’s web wallet, but due to the encryption of the private key he was unable to access the asset contained therein. This is by design of course and illustrates the philosophy of the system to, “be your own bank.” But being able to pass the important information on how to access the funds in your crypto wallet onto your heirs is just as important if they are not to be lost forever.
So there are two aspects to address. Having a secure wallet and making that wallet available to one’s heirs in the event of one’s deathwhere you want to leave some Bitcoin in your as an inheritance.
Much has been written about securing ones wallet. The best wallet to use of coursed is a cold hardware wallet. These are rather like a USB in that it is independent and only connected to the internet when trading or updating is done. Otherwise it can be kept in a safe place such as a Safe or somewhere secure. The encryption key to any wallet, such as a hardware or paper wallet, should be kept in separate places but provision should be made so that those who you would like access can locate it.
In other words, access is granted by you on your terms, not through anyone else’s terms.
Pamela Morgan, an attorney specializing in cryptocurrency recently stated, “[W]ith self-controlled assets, ignoring our own mortality comes at a cost to our descendants, dependents, community groups, and political causes because our keys, and therefore access to the assets, could die with us.” She correctly pointed out, “Humans die. Cryptocurrencies don’t.”
Morgan, has published a handy “Letter to Loved Ones” template that investors can use to help heirs, including those without experience using cryptocurrency, access these assets and, if desired, liquidate them. This letter is not a substitute for a will and does not legally replace a will but it does enable one to pass one’s crypto assets to one’s heirs.
This way, security can be maintained and access can be granted when you decide it should be and leaving some Bitcoin inheritance not as heartache for your loved ones.
This article is for information purposes only and is not to be construed as financial information for any purposes such as investment or speculation and it is the responsibility of the reader to perform proper due diligence before acting upon any of the information provided. We recommend that you consult with a licensed, qualified investment advisor before making any investment decisions.