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Why should you care about Crypto and NFT Inheritance?
Vault12 Blog

Why should you care about Crypto and NFT Inheritance?


Summary

Traditional approaches to the inheritance of assets, when applied to digital assets, create complexity and risk. Among the biggest risks are

(1) creating an up-to-date inventory of digital assets, with failure resulting in inaccessible assets, and
(2) trusting the third party with credentials to access your digital assets. If you pick the wrong person, they
could lose the assets, pass them on to an unauthorized third party, or attempt to access them before they are entitled to do so

.

The risks in using a traditional approach to inheritance of crypto assets 

Traditional Approach

1. Select a beneficiary.

2. Write instructions on how this person can access your assets.

For each digital asset, these instructions should include the information on where the asset is stored and all the pin-codes, seed-phrases, and passwords applicable to the asset.

RISK - You incorrectly document assets and access codes or you simply omit some.

If two-factor authentication is enabled, link the authenticator on his or her mobile phone to your crypto wallet.\\

RISK - You have now given access to your assets to your beneficiary and anyone else who sees the instructions, and they are now able to access them

Talk to this person and make sure that your instructions are clear enough.

RISK - They don’t understand the instructions fully, or lose them

3. Keep instructions updated.

Your portfolio of digital assets is continually changing - you cannot rely on doing an inventory once, or for that matter continually, without assistance. With traditional approaches, you would need to amend your instructions each time you add a digital asset, together with all access details. Any errors or omissions could result in inaccessible assets, not to mention time wasted in documenting.

RISK - You forget to update the list of digital assets or the associated access information

4. Pay for a safety deposit box in a bank.

RISK - Safety deposit boxes are not completely safe or accessible (such as during pandemic bank closings), nor are they insured in the event of loss or theft

5. Make a written Will in order for this person to legally inherit the assets from the owner’s estate.

You also have to endure that the detailed (and continually changing instructions) are not accessed by staff or other unauthorized people. In fact, it is imperative that these instructions are protected from theft.

Personal Stories

There is a steady drumbeat of these stories happening with worrisome regularity:

In December 2018, Gerald Cotten, the founder of the bitcoin trading exchange, died (under somewhat mysterious circumstances) resulting in the loss of $250M and the exchange going bankrupt. Gerald was only 30 years old and had not created an inheritance plan, nor were instructions of how to access the centralized assets ever found.

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

  1. In April 2018, Matthew Mellon, heir to Mellon family banking fortune and former chairman of the NY Republican Party finance committee, and cryptocurrency proponent died. Prior to his death, he held an estimated $1B in Ripple (XRP) - all of this remains were inaccessible as he left no instructions, even though he protected the cryptocurrency via cold storage in multiple locations around the US in different people’s names.
    https://fortune.com/2018/04/17/matthew-mellon-crypto-billionaire/

In 2017, an unidentified young crypto investor in Colorado died with a small fortune in cryptocurrency held in a coinbase account. The family, however, had no access to the account and eventually had to petition Coinbase directly. Eventually, the assets were released after a lengthy process. If the account holder had not been a U.S. Citizen, this would have been a much more complicated process.​

Introducing Vault12 Digital Inheritance

​Our CEO and co-founder, having spent time working on early crypto industry deals at Andreessen Horowitz (one of the first VCs in the blockchain space), it became very clear there was no end-to-end solution for backing up and securing seed phrases and private keys, but also that in the event of death or incapacitation, there was no mechanism to directly pass on assets to a designated individual-- that is the genesis of Vault12.

One of the painful consequences of such “death events” in the crypto economy is that they permanently and forever remove large amounts of coins from circulation, reducing the total available resources for all future users. Left unchecked, this might develop into a far bigger issue for the crypto industry as a whole since right when the industry enters mainstream use in the coming years and decades, the supply of resources available to new entrants will continue to shrink.

Vault12 Digital Inheritance is the first solution to offer a simple, direct, and secure way to ensure all your digital assets can be accessed by future generations, for all types of investors.

  • Traditional approaches to the inheritance of assets, when applied to digital assets, cause complexity and risk.
  • Your portfolio of digital assets is continually changing - you cannot rely on doing an inventory once, or for that matter continually, without assistance.
  • This simple and direct approach reduces the uncertainty around assets not being available to the designated recipient. Avoids having to approach and petition each service individually during probate to gain access.

Introducing Digital Inheritance

How does Vault12 Digital Inheritance work?

  • Built by Vault12, an app for protecting, backing up and securing your digital assets, Vault12 Digital Inheritance enables you to designate a beneficiary who can then inherit your entire portfolio of digital assets stored in your Vault when the time comes - no need to continually update an inventory or issue updated instructions.
  • Digital assets, including cryptocurrency, financial login information, legal documents, medical records, and more can be added to a Vault12 digital Vault.
  • The Vault is protected by a network of Guardians - these are friends, family, and business associates - people you know and trust.
  • A beneficiary is designated by the Vault owner from amongst the Guardians and a declaration is digitally signed and transmitted to the beneficiary, and to lawyers as needed.
  • Upon the passing of the Vault owner, when the beneficiary is ready to access the digital assets, a designated number of Guardians approve the request and the assets are restored and transferred to the beneficiary.
  • Should the beneficiary attempt to access the assets prior to the owner’s passing, the owner can veto the request.

Vault12 Digital Inheritance has been designed to reduce the risks associated with managing digital assets and preparing them for future transfer:

  • Comprehensive Digital Asset Inventory: Designed to accept all forms of digital assets. When used to secure and backup an investor’s full range of assets, it provides an up-to-date inventory to be inherited.
  • Direct access for the designated individual: Offers a simple and direct way for the designated individual to gain access to digital assets without having to petition multiple services or financial institutions.
  • Privacy Protection: Ensures that, unlike with multi-sig solutions, information about the digital assets is kept private - even from lawyers.

Recover, Back Up, and Inherit Digital Assets

(including Cryptocurrency Seeds, NFTs and Art)

Every digital asset you own should be backed up, protected and remain accessible. Cryptocurrency in particular is difficult to secure. With natural disasters, hackers, to badly implemented security, you are always at the mercy of others.

Vault12 Personal Digital Asset Security helps you recover, backup and provide legacy inheritance for all your digital assets, including Bitcoin, Ethereum, NFTs, other cryptocurrencies, private keys, seed phrases, digital art and of course, your crypto wallets.


Learn More


Download Vault12 today – Try the free plan:

Recover, Back Up, and Inherit Digital Assets

Introducing Digital Inheritance

Pass on your Digital Assets to future generations

Vault12 Digital Inheritance is the first solution to offer a simple, direct, and secure way to ensure digital assets can be accessed by future generations. Digital Inheritance enables investors to designate an individual who will inherit their entire portfolio of digital assets stored in a secure Vault once the time comes, eliminating undue risk and the need to continually update an inventory or continually issue updated instructions.


Learn More


Personal Security for your Cryptocurrency and Digital Assets

Designed to be used alongside traditional hardware, software and online wallets, Vault12 helps cryptocurrency owners, ICO investors, professional cryptocurrency traders, and high net worth investors safeguard their digital assets without storing anything in the cloud or in fact any one single location. This increases the protection and decreases the risks of loss.


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Personal Security for your Cryptocurrency and Digital Assets

Easy to setup, easy to secure, easy to access.

A digital Vault containing your digital assets is assigned to trusted people or devices, known as Guardians. Your Guardians can be adjusted as needed in real-time so that the appropriate number are always guarding your digital assets. No one can access your assets and only you get access when you need.


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The Winklevosses came up with an elaborate system to store and secure their private keys. They cut up printouts of their private keys into pieces and then distributed them in envelopes to safe deposit boxes around the country, so if one envelope were stolen the thief would not have the entire key.

Nathaniel Popper, New York Times, December 19, 2017

20% of all Bitcoin is lost forever. That's $20B, in fact, in 2018 alone, $1.1B has been stolen.

Elliott Krause, The Wall Street Journal, July 5, 2018

The idea behind Vault12 is how do we essentially split that responsibility, make that problem of key control less a technological one by essentially making it into a social one with networks of people that they trust.

Terence Spies, former CTO, HP Enterprise, Data Security

Exchanges are the main target for hackers. Those are the biggest honeypots. So the number one rule in Crypto is, do not keep your money on an exchange, and if you're going to custody that money, you need to do it off of the exchange with a product like Vault12.

Joe DiPasquale, BitBull Capital

Security and usability are inextricably linked, the former cannot exist without the latter. Vault12 understands the need for end-to-end management of this experience as well as the importance of integrating into the prevailing crypto ecosystem

Sathvik Krishnamurthy, Founder and Managing Partner, Security Leadership Capital

As we move to a more open financial system driven by advanced blockchain technology and cryptocurrency, we need smarter ways to ensure that the system is trustworthy. Vault12 does this by addressing a foundational need -- ensuring that your crypto assets are not only protected by decentralized security, but also by your trusted inner circle. Your private key never exists in one place or with one entity, reducing risks from hackers as well as everyday accidents.

Vinny Lingham, Entrepreneur and Advisor

Security is the lifeblood of industry, commerce, and leisure. As more people use decentralized applications, they will need a way to back up their crypto wallets and exchange accounts. Vault12 provides a simple and natural way to reduce risks and combat the fear of forgetting seed phrases and private keys.

Jon Callaghan, co-founder of True Ventures

Get started now.

The Vault12 app is now available from iOS and Android app stores.