Bitcoin Life Insurance

[tread93]

There is a serious need for "Bitcoin Life Insurance" In the coming years we are going to see so many cases of "Lost Coins", these will be coins that are not accessible because the surviving heirs are unsure of the password to the ledger or trezor, or whatever cold storage wallet they have, or they just won't have copies of the private keys.

I am not aware of any such policy or service that is trusted to mitigate the transfer of ownership of crypto assets to heirs in the event of one's death. Is anyone familiar with a company that does this? If so, what measures do they take to ensure that the crypto is indeed successfully transferred?  Is it a Trust, or some sort of financial advisory board? If someone signed up, how could they ensure that the companies products/services are to be trusted?

I'm sure this subject has been brought up. I have just finished up my CEs for my 215 license to continue selling life insurance/ health insurance and it got me thinking. What are your thoughts on this?/ is anyone aware of a company that provides said service?

Best,

TREAD

[Upgrade00]

There is a serious need for "Bitcoin Life Insurance"

There is no need for a centralized system which helps people to save guard their bitcoins.
Owning Bitcoin means being responsible for your passwords and more importantly, your keys and seedphrases, which always gives you access to your funds.

If someone signed up, how could they ensure that the companies products/services are to be trusted?

You can not. They can claim to be audited by an independent body and have transparent files, but centralized systems are beyond your control and can get breached, hacked or even have an internal body compromise the security of your funds.

There are decentralized means to ensure your funds get you your heir.

[tread93]

There is a serious need for "Bitcoin Life Insurance"

There is no need for a centralized system which helps people to save guard their bitcoins.
Owning Bitcoin means being responsible for your passwords and more importantly, your keys and seedphrases, which always gives you access to your funds.

If someone signed up, how could they ensure that the companies products/services are to be trusted?

You can not. They can claim to be audited by an independent body and have transparent files, but centralized systems are beyond your control and can get breached, hacked or even have an internal body compromise the security of your funds.

There are decentralized means to ensure your funds get you your heir.

Okay yes great points and I agree, but honestly, for most coin holders how many people do you think have the proper safeguards set up ensuring that their heirs would be able to safely locate the location/keys to their holdings properly anticipating a sudden death? I would argue to say that most folks who own keys to coins do not, simply because they don't expect to die anytime soon, especially if they are millennials or younger generation. If they die the discovery of said coins is left completely up to chance, unless they made sure their significant others/family knows the whereabouts/that they even owned the crypto/NFTs, etc.

So for that reason, there has to be some sort of round about way that heirs could find this and that it could get distributed evenly. Because lets face it the first person in the family who finds this stuff gets it, and basically from that point forward it is up to their own discretion to distribute evenly, etc. So any person who owns coins and has a will set up, none of what they wished to have happen to their coins would actually happen, unless they were to procure the right service.

Honestly at this point I say a treasure map would take the cake!!! hahahhah But seriously there has to be a way, some roundabout way to achieve this......

[n0ne]

When something positive about the market is being taken,they get into panic than understanding the real situation of the people. Everyone doesn't want to reach home to have rich. Rich always have an idea set to learn. Letting them to the learn the true prospects will make life better. An insurance system is required to keep the people on the risk free space.

[Ndabagi01]

Okay yes great points and I agree, but honestly, for most coin holders how many people do you think have the proper safeguards set up ensuring that their heirs would be able to safely locate the location/keys to their holdings properly anticipating a sudden death?

Nobody expects to die today. People's lives are full of hope, even when they are dying. It would be impossible to pass on the seed phrase to relatives in order to ensure access to it. Even the living today do not completely trust their loved ones, let alone adding their names to their wallet for access after death. Essentially, this is impossible because it contradicts the bitcoin framework's decentralization.

Honestly at this point I say a treasure map would take the cake!!! hahahhah But seriously there has to be a way, some roundabout way to achieve this......

Oh yeah, and it will take a long time to figure out something that will work in this manner. However, I believe it will breach the bitcoin network's decentralization.

[uneng]

Centralized services can't guarantee your heirs will receive your coins after your death. Imagine they simply scam your coins at some point, giving any excuse like they were hacked or operational costs of their platforms have surpassed the profit they make?

The problem with crypto services is the lack of guarantees for customers. This is a present and recurrent issue, having become more evident last year with so many huge and cynical scandals/thefts.

It's quite ironical crypto companies can provide insurance services, when they can't insure their customers at first point.

[DaveF]

Or, just have it as a standard loss policy. If coins cannot be retrieved then it's no different then if your house gets broken into and something stolen, or you dropped that priceless piece of art.
There is the potential for fraud, but there is always the possibility for that with any kind of insurance.
The question would be can you make it cheap enough that people would be interested, but expensive enough to generate a profit for the company otherwise nobody would offer it.

-Dave

[Welsh]

Insurance is mostly just legalised scams, you pay a monthly fee or annually for something that's unlikely to happen. Hence why, insurance companies are normally massively profiting. Alright, some insurances are nice to have admittedly, and the government backed scheme of guaranteeing your money if your bank falls through, is quite nice. However, that goes against Bitcoin's principles, and there's no realistic way of doing it. Who, in their right mind would insure something that can't be proved to be lost? Unless, you gave your insurance company all of your Bitcoin, and they controlled the private key there's no way of doing it, and it should go without saying, but that's a big no, no.

[Upgrade00]

<snip>

Creating a treasure map or subscribing to some centralized service would not be that much easier than following a couple of guidelines to set up a locked transaction for a determined period of time and giving the seedphrase to the receiving wallet to the person you want to get the bitcoins when the transaction is confirmed.

One just actually needs to set out to do it

[AverageGlabella]

If you trust your partner to handle all your other assets or you have a joint bank account then I think you can trust them to have access to your seed. You might want to make sure that it is secure and that they can only access it under extreme situations to prevent knee jerk reactions but securing your btc in case of your death is pretty easy to do.

[sheenshane]

I am not aware of any such policy or service that is trusted to mitigate the transfer of ownership of crypto assets to heirs in the event of one's death. Is anyone familiar with a company that does this? If so, what measures do they take to ensure that the crypto is indeed successfully transferred?  Is it a Trust, or some sort of financial advisory board? If someone signed up, how could they ensure that the companies products/services are to be trusted?

I heard about it before but it wasn't working because of the Trust issue.
People who understand the decentralized nature of Bitcoin always doubted trust in any centralized companies that offer a service like this, because it's prone to scams or any fraud activity ahead, you'll never know when they will become a scam.

You can't mix up decentralized and centralized ones, the importance of storing Bitcoin is a seed phrase that you can keep and transfer to heirs when the time comes you'll pass away.  There's no need for a centralized company to ensure the security of your Bitcoin.

[franky1]

nothing stops anyone from making 1000 backups of their key in multiple methods

EG pencil on paper, etching metal, phone with wallet, pc with wallet, usb stick backup. trezor. tattoo on arm. rfid implant. NFC stickers

endless solutions to not forget

..
to avoid any one member from raiding the inheritance early and running off to exotic island to never talk to siblings again.. solution is simple.. multisig

they can all save their key a millions different ways but they dont have access to siblings keys.. to merge the keys to create the multisig

you can then have a method where the main investor of the family keeps his key a secret where family only get to know it upon his death where a solicitor/lawyer store the 'last Will' containing said key. but they obviously cant steal funds because they dont have the other keys of the multisig

people can create their own encryption which is only valid to decrypt data after 6 months.
people can have it where it monitors the blockchain and only allows decryption where there is a valid block height that is higher than 26250 blocks higher than when the algo was made
(using blockheight is better than just having unix tme (which someone can simply change the system clock/calender date to fake it being 6 months later))

and thus use the blockchains height as a timestamp to authorise decrypting data
thus not need a lawyer, and instead just the main investor of the family adjusting the "death switch" which if he doesnt update to be 25000 blocks later than update, must be becasue he died and cant update it. thus family will get to unlock within 6 months

other things are available like nlocktime to prevent a transaction from being spent(included in block) until after X

[AverageGlabella]

nothing stops anyone from making 1000 backups of their key in multiple methods

The more copies of your private key the more chance of it being stolen. More backups does not make it more secure and could do the opposite because there is no way someone could make a 1000 backups and secure all of them equally. If it was all backed up in their house then there would not be enough room for enough safes and putting them all in one place would be pointless for creating backups.

[franky1]

nothing stops anyone from making 1000 backups of their key in multiple methods

The more copies of your private key the more chance of it being stolen. More backups does not make it more secure and could do the opposite because there is no way someone could make a 1000 backups and secure all of them equally. If it was all backed up in their house then there would not be enough room for enough safes and putting them all in one place would be pointless for creating backups.

i think you took my numbers too literally..
its more of the mindset that people think they should only have 1 back up.
yet nothing stops them having more

as said before if your worried about a sibling then there are many different ways for you to encode your key

you are not locked to only relying on a trezor or a paperwallet(one option to be stuck with) you have freedom of choice of options. thus can create your own cunning methods to back up your key to evade snooping siblings

plus sibling needs all keys of all relatives to then be able to steal funds. so just finding one siblings key is as useless as not finding 1 siblings key in a 5 of 6 multisig because he needs to find atleast 5 keys hidden by 5 people in x number of different ways.

thus its not a case of just needing to steal 5 trezors. you have freedom to back up in many ways

EG tell family you have key on a trezor. and let them waste years sneaking around he house trying to locate your trezor. when actually you etched it on the inside of a metal ball point pen grip which then needs to be sha256 hashed 10 times with a salt nonce of a special number to reveal the private key or some encryption..
(theres a world of options)

[dansus021]

There is no need for a centralized system which helps people to save guard their bitcoins.
Owning Bitcoin means being responsible for your passwords and more importantly, your keys and seedphrases, which always gives you access to your funds.

Agree, one of bitcoin biggest quote is "be your own bank" so the security is at your risk.

Although I found some crypto insurance but it never gets redeemed before and it usually covers the smart contract which means only the specified EVM chain that available to cover and usually it cover DeFi solution not bitcoin

you can search in here https://coinmarketcap.com/view/insurance/

well know

• Nexus Mutual
• InsurAce

[Hispo]

What about a decentralized solution instead trusting one's coins to a third party?
There must a way for a wallet to be emptied and those funds be sent towards another address after a certain period of inactivity is reached, if that is achieved somehow, the heirs would only need to keep their personal private keys and take care of them until the transaction is deployed.

[franky1]

trusting coins to 3rd party is not insurance.
its the worse form of protection
(not-your-keys-not -your-coin)
it actually becomes putting funds in 3rd party, where you THEN need financial insurance to counter the risk of the third party

in short its the custodian that needs insurance.

if its about your own funds.. be your own custodian and secure your funds in the many many ways available using features of a full node such as the many ways to multisig funds and then separate out keys to relatives where they then can backup keys anyway they like to evade sibling attack

however putting funds into a business custodian. you then need financial insurance to protect you if said business was to go bankrupt/abscond with value due to 'not-your-keys-not-your-bitcoin

[peter0425]

Always remember that our money is our responsibility and keeping it safe is our obligation so why need to let others or third party to act on this when we are the one who must do this for our own funds.

Insurance can be good for everything but for crypto? I am not sure if we can be willing to let others keep our funds? or we will do the better for its safeties?

also why not let our love ones help us keep it ? than letting someone do it for us.

[Fundamentals Of]

I think this doesn't sound interesting because it goes against the idea of Bitcoin. Bitcoin frees you. With Bitcoin, you don't have to trust anybody, whether to take care of your money or to take care of how it is stored or to make sure it goes to the right heir when you die. All of this is removed with Bitcoin. You take care of your own money. That's 100% yours and your 100% responsible for it and for whatever will happen to it after you die.

If you're unsure about its safety or how to make sure it is properly inherited, do something. But you don't have to let a third party intervene.

[Hydrogen]

There is a serious need for "Bitcoin Life Insurance" In the coming years we are going to see so many cases of "Lost Coins", these will be coins that are not accessible because the surviving heirs are unsure of the password to the ledger or trezor, or whatever cold storage wallet they have, or they just won't have copies of the private keys.

Part of the reason baseball cards, sports memorabilia and collectibles appreciate in value over time. Involves many cards, collectibles and memorabilia being lost or destroyed, resulting in deflation and scarcity of assets.

The same principle could apply to bitcoin. As coins are lost, deflation and scarcity increase. Which naturally would contribute towards the price being driven upwards steeply over the long term.

Lost coins would contribute towards bitcoin becoming a more exclusive and rare asset. Like mining rewards halving it would drive the price of bitcoin upwards, under natural market mechanics.

Speculation and volatility are the unknown variables. If it were purely a matter of market forces and trends, bitcoin's value could be expected to appreciate at a linear rate as coins are lost and become defunct.