What happens to the bitcoin after you die?

People want to get in on the ground floor of what is expected to be the next big investment trend. That means Web3, NFTs, and decentralized autonomous organizations, or DAOs, are on everyone's mind.

New crypto investors, on the other hand, aren't necessarily considering what would happen to their digital assets if they died suddenly. For many, this is bad news because there are currently no established methods for ensuring that crypto is handed on to the next of kin. Without a strategy in place, crypto investors may pass away, leaving their heirs without a vital source of financial assistance and no way to recover it. However, even those crypto investors who are trying to prepare ahead, as well as a few crypto-friendly tax lawyers and financial counsellors, are encountering practical challenges. They're now rushing to figure out how to make inheritance work in the age of bitcoin - a harsh reminder that crypto is still in its infancy.

Cryptocurrency's nature makes it difficult to pass along. Bitcoin is commonly held on the blockchain, which is a digital ledger created by a global network of computers that records transactions, including cryptocurrency exchanges. These transactions are normally carried out utilizing public and private keys. Public keys function similarly to bank account numbers, serving as an address for sending crypto to others. Private keys are built up of unique, incredibly long sequences of characters that unlock your crypto and work similarly to passwords. Private crypto keys, unlike other sorts of passwords, cannot be restored if they've been lost or forgotten. That means that people who are eligible to inherit their loved one's crypto will be unable to do so without those keys.

Because there is no established method of passing down cryptocurrency, investors are creating their own, often odd, procedures to ensure that their digital assets are passed down to their heirs. These arrangements could include anything from storing their keys in secret lockboxes to seeking professional help to manage their crypto for their heirs. Other cryptocurrency owners, on the other hand, are still undecided about what to do and have yet to discover financial advisers who are familiar with the technology or who can refer them to someone who is.

So what actually happens to crypto after you die?

In a technical sense, nothing. Cryptocurrency is once again kept on the blockchain, ensuring that there is a permanent record of it. That implies your cryptocurrency will exist for as long as the blockchain does, whether you're alive or dead.

How your loved ones will utilize that cryptocurrency is a separate topic, one that is mostly dependent on whether they are aware of it and how to use it. Some people have chosen a more traditional approach, writing their keys down on a piece of paper and leaving it where a family member can find it. Other cryptocurrency holders rely on exchanges such as Binance and Coinbase, which allow users to buy and sell cryptocurrency via the internet.

If you can show that you're legally entitled to your loved one's crypto assets, these platforms will pass over control in the same manner that a bank would. However, some cryptocurrency holders are wary about these exchanges, which are frequently targeted by hackers.