Bitcoin too faces the problem of Inheritance and there is no appeal
Feb 18, 2018 Posted / 11428 Views
Properties, finances and wealth always have faced one problem if one dies, who will inherit it. Similar stories grapple the Bitcoins inheritance too, which needs the answer of wealth ownership in case of owner’s death. You can experience the problem through this story- Five years ago, Matthew Moody died during an observational flight when the two-seater plane he was flying in crashed over a canyon in Chico, California. His father, Michael Moody, knew his 26-year-old son had been mining Bitcoins and at present, they are worth thousands of dollars each. However, his father had no idea as to how many bitcoins he had or how will he find them. Michael Moody has spent the past three years seeking the answers and he has got none.
“My son was actually one of the earliest people to mine it,” said Moody, a retired software engineer. “He used his computer at home to mine Bitcoins when you actually could do it that way and he had a few we think.”
Now the very characteristics that give the upper hand to Bitcoin had proven unfair to this father. The decentralized and unregulated nature of Bitcoin means that without the keys to access his son’s digital wallet, Moody has no way to access any of his funds. And it’s almost impossible to find out whether a person is sitting on peanuts or a fortune, as wallets can contain an unlimited number of unique addresses, or identifiers, with Bitcoins assigned to each. Without knowing every address, it’s not possible to locate every piece of currency.
Blockchain.info did not respond to requests for comment on this story. It seems like there is no authority that could be appealed to fix this and those coins would be lost forever. Moody says entrepreneurial young people, unfamiliar with emerging digital currencies, need to be better enlightened about the steps needed to be taken to ensure their investments are properly secured, both for themselves and for future heirs.
In the 1990s your digital legacy that might have just meant email accounts, but today extends to passwords, encrypted device backups, photo archives, personal data held by search engines, advertisers and social networks and now cryptocurrencies.
Issues around inheritance include initial coin offerings, the process of raising money from investors by offering them virtual “tokens” instead of shares. In 2017, about $3.5 billion was raised worldwide from ICOs, according to data compiled by CoinDesk.
The comparatively nascent practice of holding ICO means legislation is yet to catch up, meaning questions around what happens to a person’s rightful tokens when they die are numerous. But following a number oflawsuits, U.S. lawmakers will soon decide whether a token acquired from an ICO will be considered no different to a share bought through an IPO.
“My bet is that ICOs, when issued by a company, they’re going to be considered securities,” said Peter Henning, a professor at Wayne State University Law School and veteran SEC and Justice Department lawyer. “If they are securities, then just like stock or bonds you can put them in your will and pass them down.”
Some firms are beginning to make provisions. CoinBase is a custodial service, which holds a customer’s private keys, the kind that if lost would otherwise render any Bitcoins permanently inaccessible and as such is able to provide some level of security in the event of a person’s death. The company asks for documents such as a death certificate and will in order to transfer the assets.
It’s not a solution that some enthusiasts will be keen to use, as the idea of someone else being in custody of Bitcoins is antithetical to decentralized, user-controlled ethos that sparked an interest in the anonymous currency in the first place.
Bloomberg media says that when they approached CoinBase to answer back, they declined to comment for this story.
The safekeeping of a private key remains the bottleneck regarding the inheritance of Bitcoins. The startup Ledger SAS, which in January raised 61 million euros ($75 million) from investors makes electronic Bitcoin wallets. These use USB dongles to store passwords for accessing and spending cryptocurrency. Of course, if your heirs can’t find the dongle or don’t recognize it for what it is, the problem remains.
Ian Purton, CEO of the StrongCoin digital wallet service, said it’s an issue that has arisen as the industry matures, “and people start to consider family and what would happen to their digital assets.”
“When we first started out it was all about how we can best secure Bitcoin from hackers,” he said. “Now, our focus is also on protecting users who may be unfamiliar with cryptography.”
Applancer is an open platform for discussion on all things like Blockchain , Cryptocurrency and Ico news updates. As such, the opinions expressed in this article are the author's own and do not necessarily reflect the view of Applancer .
Hottest Blockchain Newsletter
For updates and exclusive offers, enter your e-mail below.