As cryptocurrency investment becomes more and more popular, long-term investors are increasingly concerned with the uncomfortable question: What happens to your Bitcoin (BTC) when you die? 

According to a 2020 study by the Cremation Institute, nearly 90% of crypto owners are worried about what will happen to their crypto after they pass away. Furthermore, despite a high level of concern, crypto holders are reportedly four times less likely to use wills for inheritances than non-crypto investors.

As explained in its white paper, Bitcoin is a purely peer-to-peer version of electronic cash, allowing online payments to be sent directly from one party to another without going through a financial institution.

As a distributed network, Bitcoin has no central authority to control user funds, so no one but the owners themselves can control their assets.

Consequently, millions of dollars in crypto is being lost each year through the deaths of its owners. Crypto insurance firm Coincover estimates that around 4 million Bitcoin, or $68 billion at publishing time, is out of circulation after access was lost, with a large portion likely caused by death.

But this doesn’t mean that cryptocurrencies like Bitcoin can't be bequeathed and will inevitably be buried forever with the deceased owner.

In fact, there are a number of ways for investors to bequeath their crypto to the next generation, but each method requires some decision-making and planning, as well as some general knowledge about how crypto works.

Sharing keys with trusted family members

Sharing keys with trusted family members is probably one of the most straightforward methods to passing on your crypto. Some of the most prominent people in the crypto industry have publicly claimed to use this method to ensure their crypto fortune gets passed on.

Hal Finney, an early supporter of Bitcoin and recipient of the first Bitcoin transaction from BTC creator Satoshi Nakamoto, willed his crypto holdings to his children by simply providing his keys. About a year before his death in 2014, Finney wrote:

“Those discussions about inheriting your bitcoins are of more than academic interest. My bitcoins are stored in our safe deposit box, and my son and daughter are tech savvy. I think they're safe enough. I'm comfortable with my legacy.”

This crypto inheritance practice is straightforward but may not be suitable for everyone in the crypto community. This way of bequeathing Bitcoin could be also considered risky, as shared keys come with the responsibility of keeping those assets secure. If you choose this method, be sure that your heirs are aware of the plan and some best practices for crypto security. 

Some exchanges can unlock crypto with a death certificate

Despite the Bitcoin network itself not caring about things like inheritance, some crypto services allow family members of a deceased client to access their crypto assets. Major United States-based cryptocurrency exchange and wallet service Coinbase, for example, allows the bereaved to gain access to a family member's assets after providing a number of documents including a death certificate and a last will.

Coinbase users can also name a beneficiary on their Coinbase account. However, the procedure is not supported directly through Coinbase but rather using the services of an estate planning attorney.

A spokesperson for Binance — the world’s largest crypto exchange — told Cointelegraph that the company has similar policies for providing access to crypto beneficiaries but did not elaborate on the process. “The beneficiary should contact customer support directly where one of our agents can guide them through the process,” the representative said.

Crypto inheritance services: Are they worth it?

There are also some projects that are dedicated to ensuring the inheritance of digital assets. For example, companies such as Safe Haven, Casa and TrustVerse are working on their own solutions that allow people to bequeath their crypto assets using blockchain technology and cryptography.

Officially launched in September, Safe Haven's digital inheritance platform Inheriti allows users to bequeath access not only to cryptocurrencies like Bitcoin but also to social media profiles like Facebook and Google+. Safe Haven's CEO, Dujardin Logino, said that neither Safe Haven nor Inheriti will ever store any digital assets themselves but rather provide a service to store encrypted information to the assets in question. “It is 100% your decision who gets a Safe Key since Safe Haven or the platform Inheriti has no idea what you are encrypting,” said Logino.

Logino told Cointelegraph that Inheriti has been gaining more traction amid the ongoing COVID-19 pandemic:

“In the last few weeks we have seen our platform grow to more than 1,000 unique users in the space. With the COVID-19 situation we are experiencing a huge demand from crypto and non-crypto people for our solution.”

While specialized services may offer a tailor-made solution to the crypto inheritance problem, they are generally in their early stages of development and also charge a fee. According to Logino, each backup share by Safe Haven costs about $20 to $40 in the firm’s native token, SHA. A standard edition solution also charges a $5 monthly subscription.