Image Credits: Mitch Barrie (opens in a new window)/ Flickr (opens in a new window)under a CC BY-SA 2.0 (opens in a new window)license.
The mysterious and sudden death of Gerald William Cotten in Jaipur has given rise to a possibility that around Rs 1,000 crore in digital currency may disappear off the face of the earth.
First, let’s answer the question that’s on everyone’s mind - why can’t the money be recovered?
Bitcoin and other cryptocurrencies are digital form of currencies protected by unbreakable mathematical codes.
A bitcoin account has two types of keys: private key and public key.
Private key is similar to a password which is used to access the funds. An individual can access his bitcoin funds only with this private key. Owing to the highly secure nature of the bitcoin algorithm, without having access to the private key (which is a long string of random characters), there is no way to access the funds in an account.
The Public key, which is visible to anyone, is an address for transferring cryptocurrencies.
If a Bitcoin owner dies without sharing the private key, his heirs may be able to see the funds in his account (using his public key) only to realize that they will never gain access to the wealth inside.
Due to this system design, blockchain doesn’t allow any third party or bank to change or transfer the funds from an account without having the private key.
Hence, the bitcoin system trades flexibility for security. The table below explains this better:
What happened in Gerald William Cotten’s case?
Since anyone having the private key can directly access the funds in a bitcoin account, the owners of bitcoin prefer not to share it with anyone.
They typically don’t trust it to anyone else since anyone with access to the private key can access ALL of the money in the bitcoin account.
Since Mr Cotten didn’t share his private keys with anyone, the funds will remain inaccessible to anyone unless his private keys can be attained. Since the private key is 64 characters long, it would take even a modern computer 0.65 billion billion years to guess this.
Hence millions of dollars were rendered inaccessible because Mr Cotten passed away without making a digital will or sharing access of the key to anyone else.
Why traditional Will solutions do NOT suffice?
This problem would not have arisen if Mr Cotten had created a will with this bitcoin private key. But traditional will solutions will not work for cryptocurrencies.
Typing out the private key (password) in a will document is a bad idea because then it is easily readable (thereby making the funds accessible) to anyone who has a copy of the will. This will document is also more prone to physical theft, thereby defeating the original intention of securing your funds in crypto format.
Furthermore in certain countries, wills, after the owner’s death, become court documents and are generally public documents, accessible by anyone.
The Solution for this Problem
The main problem with traditional will services is trust and security.
One can trust someone until they break it!
Hence the person who is holding this Private Key/Passwords cannot share it with anyone for fear of compromising their security.
One must make use of a trustless Digital Will solution for their Digital asset otherwise, unlike banking and centralized authority, digital assets can only be passed on if the Keys or Authorization of that asset is shared.
Bitwill has created the most secure and ‘TRUSTLESS’ platform with which the digital and crypto asset’s legacy can be passed on from generations to generations. Our Bitwill legacy algorithm (patent pending) is based on a proprietary mechanism. This allows the user to keep their digital assets secured without worrying about any leaks and transfer the custody of the account in case of the user’s demise.