I was having lunch with a friend yesterday and we were discussing virtual currency. In between bites of my pastrami stacker on a pretzel bun, I asked him, “What if you walked out onto the street and got hit by a bus, would your wife know how to access your thousands of dollars in virtual currency?” He replied, “No. I figure she’ll just call you.” To which I replied, “How in the world am I going to help her access your virtual currency? I don’t know your password, login, exchanges where you hold money, wallets you hold money in, or your seed phrases.” He looked at me and shrugged. This post is a public service announcement for all the virtual currency owners in the world.
First, if you are not familiar with the basics of virtual currency, check out my prior posts. Otherwise, continue reading for some tips on ensuring your virtual currencies are not lost in the event of your unexpected death.
Tip #1 – Write down your login information and store it in a fireproof container or safe deposit box.
The first line of defense is to ensure that you have written down your login name and password for each virtual currency wallet and exchange where you are storing virtual currency. Next, give the login information and password to someone you trust, or if you have no one you trust, then your safe deposit box. Your friend who happens to also own virtual currencies is not going to be able to access your virtual currency locked in a wallet or exchange if you have not provided him with your login information and password, unless of course he has access to your seed phrase.
Tip #2 – Write down your seed phrase and store it in a fireproof container or safe deposit box.
When you open a virtual currency account or wallet, you should have received a recovery seed phrase. The length of the seed phrase is usually 12, 18, or 24 words. This seed phrase is your last line of defense in the fight against losing your virtual currency. Think of your seed phrase as a way to restore access to your virtual currency from any place in the world even if you’ve forgotten your password, forgotten your login information, died, or had your hardware wallet stolen (provided the thief did not quickly send your virtual currency from your address to a different address).
This seed phrase should be written down and stored in a secure, fireproof, flood-proof location. You should also tell a loved one where to find the seed phrase. If you want to learn more about seed phrases, check out this link.
Tip #3 – If you keep your own private keys, write those down too.
If you have your own private keys, write those down and store them in a fireproof, waterproof, and bombproof safe. If you don’t know what a private key is, go here.
Tip #4 – Educate your spouse or someone you trust one on virtual currency.
So you have provided your spouse with your login information, password, private keys and/or seed phrase, now what? Time to teach a little virtual currency 101. They could start by reading my prior post on the basics of virtual currency, or you could sit down and teach them a bit of what you’ve learned. You need to explain to your confidant the basics of blockchain, wallets, private keys, seed phrases, exchanges, and accounts so in the event of your passing they know how to access your virtual currency and transfer the virtual currency to a new account/wallet at the proper time.
In short, make sure you plan for the unlikely scenario where you are no longer around. Who knows, maybe your virtual currency will be worth millions some day, in which case, feel free to instruct your loved ones to contact me to obtain my Bitcoin address.