Death and Dying in the Bitcoin Age: What Will You Do With Your Coins?
November 11, 2018 by Evan Faggart
In recent years, people have began to wonder what they should do with their digital lives after they die. Now, since Bitcoin has become more popular in the mainstream, there is a new worry: what do you do with your crypto when you die?
Also read: Fork Wars: 66% of Bitcoin Cash Miners Now Backing Satoshi Vision
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What Happens to Bitcoin When You Die?
The issue of dealing with your bitcoin when you die can be confusing and frustrating. If you do nothing, your coins are lost forever, not accessible by your family or friends.
If you’re an enthusiast with a considerable stash, this should be of concern. Think about how much your coins are worth now, what if they’re worth double or higher when you die? They’ll just sit on your hard drive, and no one will be able to get to them. Eventually, they’ll end up in a landfill like countless other bitcoin have in years’ past.
Leaving your coins inaccessible after death has an even wider implication beyond what it could mean for you and your family. With your coins gone forever, there is a smaller amount of bitcoin available on the whole, meaning even less people can get to them.
While this would increase the value for holders, it would make it harder for newcomers to get their first satoshis, since even the smallest unit of bitcoin would be unattainable in a world where its value is sky-high, and there’s only a small chunk available for everyone.
So, you have two options. One is to do nothing, and possibly throw your coins away forever. The other is to prepare for the inevitable, and ensure your stash has use and meaning after you’re gone.
Deadman Files and Wills: Passing Your Hoard Down When You Die
A Deadman file is one relatively easy way to make sure your bitcoin won’t drift into the eternal abyss with you when you die. With Deadman, you can prepare any kind of documentation to be emailed to family, friends, or trusted third-parties when you die. The service works by sending you an email periodically to make sure you’re alive. If you don’t respond, Deadman will send your preprepared file to your chosen list of recipients.
With a Deadman file, you can create detailed instructions on how to access your bitcoin, and what to do with them once your beneficiaries get a hold of them.
If you don’t want to trust your crypto millions with an online service, you can still safely make postmortem arrangements for your coins through a traditional will.
The first thing you should do using this method is to make sure you do not put any passwords, private keys, or disclose any sensitive information regarding your bitcoin in the will itself. If you do, people other than your selected beneficiary can see that extremely important information.
Instead, put a document containing that information in a sealed, tamper-evident file or envelope and name a recipient for the file in your will. Make sure to demand in your will that no one other than the intended recipient opens the file. That way, the instructions get passed on, but no one except your intended bitcoin beneficiary will be able to see how to actually get your coins.
Some things you will definitely want to include in this sealed file are:
- The location of your coins (i.e., location of your hardware wallet, or the file location on a PC for a software wallet);
- Your private keys;
- Instructions on how to move the coins to a new wallet, or how to set up an exchange account and cash out your coins.
That’s just the basic information you need to make sure someone can find your bitcoin and move it. You will want to include more specific instructions if you have wishes on where you want your coins to go or how you want them to be used after you die.
Other options are available that you can research for yourself, but these basic ones are likely the most direct way to handle your coins when you pass away.
So there it is. Don’t let your digital nest egg fade into oblivion after you die. Make sure they are put to good use. That is, unless you want your crypto to die with you.
Do you have a plan for your bitcoin when you die? Let us know in the comments section.
Images via Pixabay
