Episode 31 – What Will Happen To Your Crypto When You Die?
TITLE: September 2033
[ Robin appears under a white sheet – use old Radio 1 Simon Mayo true story music? ]
Hi. I’m the ghost of Robin. And you can’t see it, because it’s hidden behind my ghostliness, but I’m crying tears of surprise, regret and guilt.
Last week I died in a freak electric scooter incident. The cause seems to have been the banana I was eating, which was later found to have had a dangerous design. [Flashback – stunt?]
The reason I’m crying is that in the last ten years of vigorous graft, I managed to acquire 4 of the RAREST APES, and all NINE ALIEN PUNKS, as well as 87 BITCOIN, all together now worth a HUNDRED MILLION DOLLARS.
I was very pleased with my life’s work. Ready to join Elon Musk on a voyage to Mars. And then… then there was the incident with the banana.
And now… those apes, those punks, those 87 Bitcoin… are lost forever. Like tears in rain.
All because I kept my PRIVATE KEYS to MYSELF. Like I was supposed to, right?
It’s the first rule of crypto – never share your recovery phrase – with anyone.
If only I’d thought about DECENTRALIZED INHERITANCE. I could have passed on my punks to my kids, my apes to my wife, and maybe my bitcoin to you…
And that’s why I’m sending this transmission back in time, so that you – my friend – need not lose everything when the time comes, as it will for all of us.
Welcome to School of Block.
[rip off sheet?]
And if you like what we’re doing – please do like and subscribe, and help us help you find your financial freedom.
The problem with what happens to your crypto when you die was brought into sharp focus back in JANUARY 2019.
QUADRIGA was Canada’s largest crypto exchange, and its 30 year old CEO, GERALD COTTEN, had died in mysterious circumstances whilst on honeymoon in India.
In a well run business, this wouldn’t necessarily have been a disaster for investors and users of the exchange, but as it turned out – Cotten ALONE held the private keys for all the funds held on the exchange – more than a QUARTER OF A BILLION dollars.
So what happened to all of that money? That’s right… POOF. Gone.
Is Gerald really dead, or is this the exit scam to end all exit scams? That’s not in the scope of this film, but by all means google it and disappear down the rabbithole. It’s quite the story.
But this does raise a rather enormous question.
Right now the global crypto market cap is over 2 TRILLION DOLLARS. And, generally speaking, there isn’t an established system for what happens to these assets when the holders die.
Yes, the larger exchanges, upon production of a valid death certificate, will have procedures in place for managing the transfer of those assets.
But what about all the crypto in SELF CUSTODY, which of course is the SAFEST place to keep it?
A quick reminder on how this works – private wallets have PUBLIC ADDRESSES – much like the street address of your house, but they also have PRIVATE KEYS, much like your front door key.
The difference with this metaphor is that you wouldn’t give your neighbour a copy of your key, because in CRYPTO, ownership of the keys is legally ownership of the CONTENTS of the WALLET.
The same applies to your SEED or RECOVERY PHRASE, which, while sounding a little like the WINTER SOLDIER’S activation code [clip] – is a 24 word sequence which recreates your PRIVATE KEY.
HARDWARE WALLETS are the safest place to store your tokens, but you don’t need them to access your assets, as your RECOVERY PHRASE enable you to access your tokens from ANY wallet – and that’s why they’re meant to be kept secret and out of reach.
With financial freedom does come great responsibility. Because if you lose your private keys, or your recovery phrase – then your crypto is GONE FOREVER.
This does all lead us to a CONTRADICTION, doesn’t it?
How do you pass on your crypto wealth to your family if they’re never allowed access to the keys?
Without the ability to TEXT THEM from the OTHER SIDE, you’re kind of stuck.
But, fortunately – there are a number of NEW PROTOCOLS that have found INNOVATIVE SOLUTIONS to the problem.
TERNOA is one of them, it creates TIME CAPSULES whose opening and reception procedures are decided by their creators.
These time capsules are NFTs that function as DATA TRANSMISSION PROTOCOLS.
There are different ways of setting these up – for example, a DATE PROTOCOL, where you can set a smart contract that will transmit DATA to a given recipient on a DATE of your choice. This could be your private keys, for example.
Kind of a DIGITAL SAFE which can only be opened on a SPECIFIC DATE.
There’s also a DEATH PROTOCOL, where the time capsule is issued upon the death of its creator. To operate under the best conditions, this protocol is based on the APIs of LOCAL DEATH REGISTERS, so initially its function is limited to countries with compatible systems.
Another inheritance protocol is SAFE HAVEN – which distributes private keys or seed phrases between the OWNER and their BENEFICIARIES, whilst retaining control for the owner.
These SHARES are also managed as a legally binding document by a NOTARY. So in the event of the death of the owner, the beneficiaries can present the necessary legal documents and the private keys are released.
Sounds kind of complicated, so let me show you how it works:
ROBIN SAFE HAVEN DEMO
In general, crypto adopters are not yet of the age where we expect death on a regular basis.
And as a result, the world of CRYPTO INHERITANCE PROTOCOLS is still a new and developing space.
We can expect more solutions to emerge in the coming years, which may find creative and more user friendly ways of solving the problem.
But don’t hang around… It’s worth giving the issue some thought right now.
Because FREAK BANANA RELATED ACCIDENTS can and do happen. And what are you going to do if it happens to you?
You don’t want to end up like me in 2033, responsible for condemning those RAREST of PUNKS to an eternity in limbo. That’s a crime for which no punishment is sufficient.
You’ve been watching School of Block, presented by Ledger and the Defiant, demystifying decentralisation, one block at a time. Don’t forget to subscribe, drop us a like if that’s what you’re into, and as always – here’s to your financial freedom.