Cryptocurrencies are the future of money. A sensible crypto investment is an investment into the future. One major concern lots of investors have in the crypto space is wealth transfer. In recent news, a whale — someone who holds a large amount of bitcoin (holds over $2B worth of Bitcoin) was reported to have died at 41 years old leaving his crypto fortune behind.
The question is; what will happen to his crypto asset?
The truth is, it’s gone — forever.
Well, if he read this article today and implemented it, his family could have regained access to his portfolio.
In this article, you’ll learn how to transfer your crypto asset to a successor. Just the way you’ll do with your regular wealth.
First off, we’ll get a little technical, don’t fret, I’ll show you all you need to know to follow along. With the way crypto works, it’s not a good idea to just take your crypto keys and hand them over to an organization that promises to insure your crypto. Not even the bank. Your coin could be wiped without a trace.
So, what should you do?
Keep reading to discover what to do.
First, we’ll start with encryption. Let’s encrypt it.
Encrypting your crypto secrets
Encryption is the process of hiding information by converting it into another form in such a way that it can only be accessible to someone who has the secret code or decryption key. But hey, I am not going to talk about cryptography here and no maths either.
We need to use a very good encryption tool to encrypt our keys. First,
- copy your private keys and recovery phrase/mnemonics from your wallet
- Write a simple instruction on how to restore your coin in a wallet —- write it assuming that the reader has no knowledge of crypto.
- And put all the information in a text file or in different text files and put them in a directory. That’s the file/folder we are going to encrypt.
Download Veracrypt, it’s going to be our encryption tool. It’s open-source and it’s secure. You can download Veracrypt for your machine from the official website. And then install it. As of this writing, there is no mobile app version. And be careful, don’t download it from another website.
Now, it’s time to use it.
I’ve created a file for an example:
That’s the file we’ll encrypt.
Now, open your Veracrypt and create a volume.
Follow through with the wizard to create a standard volume.
Finally, enter the name of the file. When you click the “Select File” button a box will pop up where you can specify where the volume will be created and what name you want to call it.
Next, it will ask you for the encryption option. Just choose the default option and move on since you are not so experienced with cryptography.
Next choose the volume size. Usually your volume size should be less than 2m just check the size of the file you are going to encrypt.
Now create a password for your encryption, use a strong password. A combination of Upper case, lower case letters, numbers, and characters such as .,?’[)\` this will be an added security to it.
And finally, format the drive:
After this step, your drive will be created.
Now, it’s time to add the encrypted file to our new encrypted volume.
Open Veracrypt and select the Veracrypt volume file we just created. Mine is located on my Desktop:
You’ll be prompted to enter your password to open the file. If your password is correct the volume will be opened. Click on it.
You’ll see an empty directory. Move the file that has your coin details into it:
You can delete the unencrypted version from your system and from the Recycle Bin.
That’s it. Your coin has been encrypted.
Where to store your encrypted file and next steps
Where do you keep this encrypted file, you asked?
Put it in two or three Drives, CD, Flash, or Hard Drive.
You don’t want to use a drive you’ll use again for something else. This drive should be dedicated to saving your crypto only. Get a good one.
Do you have a Safe Deposit Box in the bank?
Yeap, that’s a good place to put it.
Get a lawyer and draft a will.
State in your will the person who will inherit your asset when you are gone.
Only with this document can your asset be released to this person when you are no more.
You can discuss with your lawyer about how to handle your password.
Remember that the password is useless without the encrypted file and the encrypted file is useless without the password.
Crypto inheritance transfer shouldn’t be difficult. I believe this is a good way to get started exploring this space. How would you transfer your asset? If you’ve got a different perspective, I’d like to hear it, let’s all learn. Please, share in the comment section.
Software Developer | Blockchain
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