Bitcoin provides a lot of value to people with or without access to existing financial services. But there comes a certain time when every single one of us will come face to face with their own mortality, and for some, that might happen sooner rather than later. Ensuring the Bitcoin wealth is transferred to family members or trusted parties when we pass away is not as straightforward as it could be. But there are some ways to ensure your Bitcoin testament is safe.
Also read: BitGo Launches Zero-Confirmation Bitcoin Transaction Service
An Automated Bitcoin Testament
While most people would prefer not to think about these morbid things, we have to face the harsh reality of our own mortality. Granted, in these exciting times of Bitcoin, digital currency, and blockchain technology, none of us hope to pass away anytime soon. But at the same time, there is no better time than now to consider how an automated Bitcoin testament would work.
The trouble most people face is how very little their family members or other relatives know about the world of Bitcoin. Or even if they are knowledgeable about the digital currency, how would they be able to access your funds if you’d come to pass away? Most people have their Bitcoin wallet protected with a password, or stashed away on a paper wallet. These things will often be forgotten about by relatives, as Bitcoin does not operate within the realm of traditional finance.
Granted, not every Bitcoin user will own millions worth of funds, but it is important to ensure these coins are not lost. Unlike traditional wills, a Bitcoin testament could prove to be quite a struggle. Do we create a paper wallet which is handed over to a notary for safekeeping until our time has come? Or should we create clear instructions for relatives on how to obtain the Bitcoin funds, in the hopes they will follow these instructions to the letter?
As morbid as these thoughts may be, there are several people on Reddit pondering about this issue. A Deadman’s Switch for Bitcoin information might be a step too far for most people right now, but it spurs a discussion developers have been putting off for quite some time now. If we die, what happens to our Bitcoins, and how can we ensure funds falls into the right hands?
One factor to take into consideration is how the person creating their Bitcoin testament needs to be able to modify the details on the fly when needed. Not just because the value of Bitcoin might change, but simply because one moves the funds to a different storage solution, or because a radical change in the technology has been discovered which renders previous instructions moot.
Smart Contract Technology, Or Something Different?
When dealing with actions that need to take place after a certain amount of time has elapsed, smart contracts seem to offer a way out. By employing this technology, Bitcoin users can lock funds for a certain amount of time. If the [lack of] corresponding action takes place within that time period, funds will be released to the other party in the contract.
However, this technology would only work to transfer funds to a new Bitcoin wallet, which still leaves a lot to be desired. While we all want nothing more than to see Bitcoin integration on a mainstream level in the next few years, there is no guarantee it will happen so soon. A proper solution has to be found sooner or later, preferably in a passive capacity that anyone can start to use without relying on third parties.
Source: Reddit
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