Cryptocurrency can be so secure that it’s impossible for anyone to gain unauthorized access to it. With this in mind, what happens to your assets if you die?
Due to their decentralized nature, nothing happens to your cryptocurrencies when you die. There are no managers checking up on dormant accounts, nor are there any automated services or checks happening. If you die, your cryptocurrencies are inaccessible.
Protect Your Cryptocurrencies
1. Use a Multisignature Wallet
Multisignature wallets are gaining in popularity. Providing you trust at least two other people, and you’re happy to rely on another person to make any transactions, then this simple solution ensures your assets are accessible no matter what happens to you.
By creating a multisignature wallet with three trustees, and requiring at least two signatories to allow any transaction, you can rest easy in the knowledge that your assets are accessible without you.
Should you move on in this life, the other two trustees can access your funds. Want to make a transaction? You’ll need approval from one other trustee. Some projects even allow withdrawal of funds without a counterparty approval through a minimum grace period, during which any trustee can approve or decline. After this window, you can withdraw funds. This can be useful in scenarios where any other trustee is unavailable.
Sure, it’s a bit of an inconvenience, but it’s worth it to protect your assets. You do need to trust your co-signatories.
2. Let Your Family Know How to Gain Access
Out of all the options presented here, this is the easiest. how you complete this task may vary. If you trust your family members, you could print a copy of your private keys for them to look after. You may need to include instructions on how to use them as well, depending on the technical knowledge of said members.
If you don’t trust anyone, you could create a last will and testament of sorts but for your crypto holdings. This could outline all your holdings and account details, along with any other information required to make a withdrawal. If you store this in your home, your family may discover it after your death.
Or, you could write it into your will. If you include your cryptocurrency assets as a legal stipulation, the executor of your will may oversee its correct distribution. Again, without access keys this is an impossible task, so make sure to include those as well. This is assuming you trust your executor, and they actually know how to withdraw funds. This is unknown legal ground, so many solicitors may not know what to do.
If you’re still set on a will, but don’t trust your solicitor, you still have a few options. You could leave a sealed written letter to your family as part of the will. Inside you can include details including access keys. You could also leave instructions in your will while leaving out specifics such as private keys.
3. Create Your Own Smart Contract
Smart contracts can perform almost any task you can imagine. Even daft things such as ordering pizza after a transaction. If you can imagine it, you can code it. Granted this idea requires a little coding know-how, but the trade-offs may be significant.
By creating a smart contract that requires you to check-in at regular intervals, you can in effect create your own emergency backup plan. Your rules may need you to log in to your wallet every two weeks. If you miss a check-in, the contract can transfer funds to another account, email details to a friend, or perform any other task.
You may want to build in a warning system, or multi-stage process first, to prevent any accidental triggerings when you’re having a mad week with the lads in Ibiza and don’t have any Internet. If you miss one check-in, the contract could go into a state of readiness. Miss another check-in while in this ready state, and then it triggers the contract.
If you’re interested in this post-death-project, then why not take a look at our ERC-20 cryptocurrency guide?
4. Use a Dead Man’s Switch Email Service
Many “dead man’s switch” email services exist. These email you at regular intervals and send an email if you don’t reply. Don’t worry about missing a single email – they often send more than one message and you need to miss several over the span of several days to several weeks.
One such service is Dead Man’s Switch. This free service lets you quickly and easily create your own dead man’s switch, including up to two recipients. You can pay for the premium service for an extended set of features, such as more than two recipients.
You may be wondering how you can trust such a service, and that’s a tough question to answer. For the most part, you have to trust them, but that doesn’t mean you need to risk anything. By using more than one service, you’ll have a redundancy should one disappear when it matters.
Now for the security. Sharing your keys with a random website is a bad idea, as is emailing them. To get around this, you could share half your keys with a family member, and have the dead man’s switch email them the other half. This way, no single party (other than you) has access to all your account details.
Have a Cryptocurrency Backup Plan
These services and backup plans highlight some of the possible options you have for your crypto after death. There are many more options available, or you could combine many of these services into a super amalgamation of post-death crypto recovery plans. In summary:
- Use a Multisignature Wallet: require more than one person to authorise transactions. Two or more account trustees can withdraw funds.
- Let Your Family Know How to Gain Access: share your account details in your will.
- Create Your Own Smart Contract: require a regular check-in to your smart contract. No check-in and your funds get shared with a designated account.
- Use a Dead Man’s Switch Email Service: Use an emergency email service to email account details on your behalf should you become unavailable.
What’s your emergency crypto recovery plan? Do you even want your family and friends to spend your funds if you die, or will you take your cryptocurrencies to the grave with you? Whatever service you use, make sure you learn how to spot a cryptocurrency scam first.
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