Your Wealth Dies With You !! Sad Thing About Decentralization.
Very well !! People losing their cryptocurrencies and wallets due to carelessness, loss of properties, theft and various reason should be a major concern for investors.
Imagine, we have a bitcoin millionaire who have up to 100 BTC in his wallet but unfortunately died. Has a major concern for security that he couldn’t reveal his passphrase to anyone including his family due to fear of losing it to unauthorized parties. Now, he left his family stranded of generational wealth.
How can we stop this nightmare ? The purpose of this article is not to find the solution but analyze the various case it can be optimized.
- Regulating Digital Asset Legally — This has been a common solution for physical properties and money, such as real estates, funds in banks, businesses, corporation and other physical Assets. Some digital asset can also be legally willed due to centralized nature and regulation examples are collectibles and rewards gotten from platforms that includes Next of Kin details for users.
Digital assets like Cryptocurrencies are completely decentralized and mostly unregulated which can lead to difficulties when trying to legalize wills.
However, Keeping passphrase or private keys to a known and regulated Legal Practioner to pass will to assets after death is not a best advise. Can a Legal practitioner be trusted ?
This question needs to be researched to get ultimate solution. Blockchain is yet to reach it potential yet, so hopefully there will be other blockchain technology that can wipe this nigh mare.
Advantages — Legal regulation of assets, Easy will distribution and access.
Disadvantages — Trust, Centralization, Access to asset by Government, Regulatory Restrictions
2. Centralized Exchange
This seems like a very best option as it is easy for this exchanges to add a next of kin to asset inheritance due to its centralized nature. Perhaps, majority of transaction are done on Web 3 and Decentralized Applications. This can include Node validators, Liquidity providers, Locked funds, Escrow funds like Ripple tokens and various transaction on decentralized exchange that isn’t available on centralized exchange.
Moreover, investing, trading and staking few cryptocurrencies can be done on centralized exchange which can attracts only investors and traders only.
Advantages — Easy to will and transfer access, More legal validation
Disadvantages — Centralization, Asset security depends on exchange
3. Ledger and Cold Wallet
This seems sensible but it still doesn’t give any solution because of transparency. Cold wallets also has its own personal encryption by its user. This is a limitation.
But Ledger wallets can be compromise to meet this need for solution. By adding additional encryption and feature. This features is yet to be done and much research is still needed.
This is a very serious discussion and problem in the growing Blockchain space. Let me know what you think in the comments below.
Is there any best solution to this ?
