As the value of cryptocurrencies rise and more investors decide to allocate funds to the digital asset, the question of inheritance is an important one.
Unlike investment classes that have been around for years if not centuries, cryptocurrencies like Bitcoin have some unique qualities that can make passing them onto heirs challenging.
Firstly, there’s the anonymity. Technically Bitcoin is not anonymous, but investors can use various methods to make their crypto-holdings less obvious than some other assets – and their heirs may not be aware of the investment at all.
Then, there’s the issue of the private key which must be used to unlock the wallet containing the coins. Without this, accessing the coins is highly unlikely.
Securely storing the private key with a financial institution, lawyer or trusted friend may be one way to solve the issue but that’s not possible or desirable for all investors.
Enter DigiPulse, a company based in Latvia which claims to be the world’s first digital cryptocurrency vault.
The firm’s co-founder Dmitry Dementyev-Dedelis came up with the idea during a period of illness when he realized that his cryptocurrency holdings may be lost forever if he were to die.
His co-founder Normunds Kvilis, a former analyst at a European bank, explains how the digital vault works.
“Cryptocurrency wallets consist of a public address and a password. If you lose either one of them, your assets are stuck in internet limbo. We offer, firstly, a way for you to pass your assets on, with an inheritance service, and secondly, a failsafe solution – in case your PC gets lost or your house burns down. You can still access everything that you have stored,” he said.
He added that the service is built on Ethereum blockchain technology which is practically impossible to hack.
The DigiPulse system uses what is often known as a ‘dead-man’s-switch’ in connection with the customer’s smartphone, social media account or emails. If these are not accessed for the agreed period of time – between one day and 18 months – DigiPulse will automatically contact the rightful inheritor.
“We are seeing a great deal of support from the crypto community because they are in need a product like this. As people begin to use cryptocurrencies for a broader range of applications and hold significant crypto assets for investment, we must ensure that their families receive their belongings if the worst does happen,” Kvilis said.
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