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Home»HACKING NEWS»Why should you care about NFTs and cryptocurrency inheritance?
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Why should you care about NFTs and cryptocurrency inheritance?

By Crypto FlexsNovember 28, 20236 Mins Read
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Why should you care about NFTs and cryptocurrency inheritance?
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summary

Applying traditional approaches to asset inheritance to digital assets introduces complexity and risk. Among the greatest risks

(1) Create an up-to-date inventory of your digital assets, failing which your assets will become inaccessible.
(2) Entrusting your credentials to access your digital assets to a third party. If you choose the wrong person, that person
You may lose your assets, transfer them to unauthorized third parties, or attempt to access them before you are authorized to do so.

.

Risks of Using Traditional Approaches to Inheriting Crypto Assets

traditional approach

1. Select a beneficiary.

2. Write instructions for how this person will have access to your assets.

For each digital asset, these instructions must include information about where the asset is stored and any pin codes, seed phrases, and passwords applicable to the asset.

Risk – Assets and access codes are incorrectly documented or some are omitted.

If two-factor authentication is enabled, connect your phone’s authenticator to your cryptocurrency wallet.\\

Risk – You have now given your beneficiaries and anyone viewing your instructions access to your assets, and now they can access them.

Talk to this person to make sure the instructions are clear enough.

Risk – instructions not fully understood or instructions lost.

3. Keep your guidelines up to date.

Your digital asset portfolio is constantly changing. You can’t rely on doing inventory once or on an ongoing basis without help. The traditional approach required modifying instructions each time a digital asset was added, along with all access details. Errors or omissions can make assets inaccessible and waste time documenting them.

Risk – You forgot to update your digital asset list or related access information.

4. Pay for a safe deposit box at your bank.

Risk – Safe deposit boxes are not fully secure or accessible (e.g. during pandemic bank closures) and are not insured in case of loss or theft.

5. Create a written will so that this person can legally inherit the assets from the owner’s estate.

It must also be tolerated that detailed (constantly changing instructions) cannot be accessed by employees or unauthorized persons. In fact, it is important to protect these instructions from theft.

personal story

We are hearing these stories consistently, happening with worrying regularity.

In December 2018, Gerald Cotten, the founder of the Bitcoin trading exchange, died (under somewhat mysterious circumstances), resulting in a loss of $250 million and the exchange going bankrupt. Gerald was only 30 years old, had no estate plan in place, and had not discovered any instructions on how to access centralized assets.

https://www.nytimes.com/2019/12/17/business/gerald-cotten-death-cryptocurrency.htm

  1. In April 2018, Matthew Mellon, heir to the Mellon family’s banking fortune, former New York Republican Finance Committee chairman and cryptocurrency advocate, died. Before his death, he held approximately $1 billion in Ripple (XRP). Even though he had cryptocurrencies secured in someone else’s name through cold storage in various locations across the United States, he was unable to access all of these artifacts because he left no instructions.
    https://fortune.com/2018/04/17/matthew-mellon-crypto-billionaire/

In 2017, an unidentified young cryptocurrency investor in Colorado died with a small fortune in cryptocurrencies held in a Coinbase account. However, the family was unable to access the account and eventually had to petition Coinbase directly. Eventually, after a long process, the assets were released. This process would be much more complicated if the account holder was not a U.S. citizen.​

Introducing Vault12 Digital Inheritance

​After spending time working on early cryptocurrency industry deals at Andreessen Horowitz, our CEO and co-founder (one of the first VCs in the blockchain space), it became very clear that there was no end-to-end solution for backup and security. The origin of Vault12 is that there is no mechanism for transferring assets directly to a designated individual in the event of death or incapacity, let alone a seed phrase and private key.

One of the painful consequences of these “death events” in the cryptocurrency economy is that large quantities of coins are permanently removed from circulation, reducing the total resources available to all future users. Left unchecked, this could develop into a much larger problem for the cryptocurrency industry as a whole as the supply of resources available to new entrants continues to shrink as the industry enters mainstream use in the coming years and decades.

Vault12 Digital Inheritance is the first solution that provides investors of all types with a simple, direct, and secure way to ensure that all digital assets are accessible to future generations.

  • Applying traditional approaches to asset inheritance to digital assets introduces complexity and risk.
  • Your digital asset portfolio is constantly changing. You can’t rely on doing inventory once or on an ongoing basis without help.
  • This simple and straightforward approach reduces uncertainty about assets being unavailable to the designated recipient. You do not need to approach and petition each service individually to gain access during probate.

Introduction to Digital Inheritance

How does Vault12 digital inheritance work?

  • Built by Vault12, the app for protecting, backing up, and securing your digital assets, Vault12 Digital Inheritance lets you designate beneficiaries to inherit your entire portfolio of digital assets stored in your Vault when the time comes. No need for constant updates. Check inventory or issue updated guidance.
  • You can add digital assets including cryptocurrencies, financial login information, legal documents, medical records, and more to your Vault12 Digital Vault.
  • The Vault is protected by a network of Guardians – friends, family, and co-workers you know and trust.
  • Beneficiaries are designated by the Vault owner among the Guardians, and the declaration is digitally signed and sent to the beneficiaries and, if necessary, their attorneys.
  • When the Vault owner dies and the beneficiaries are ready to access the digital assets, a designated number of guardians approve the request and the assets are restored and transferred to the beneficiaries.
  • If a beneficiary attempts to access the assets before the owner dies, the owner may deny the request.

Vault12 Digital Inheritance is designed to reduce the risks associated with managing digital assets and preparing for future transfers.

  • Comprehensive digital asset inventory: Designed to accommodate all forms of digital assets. When used to protect and back up an investor’s entire assets, it provides them with an up-to-date inventory to inherit.
  • Direct access for designated individuals: Provides a simple, direct way for designated individuals to access digital assets without the need to petition multiple services or financial institutions.
  • Privacy Protection: Unlike multi-signature solutions, information about your digital assets remains private, even to your attorney.
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