Analysis: $2 billion worth of Crypto are permanently lost each year due to accidental death. How can we ensure safe inheritance?

Approximately 10 million cryptocurrency holders pass away each year, and it is conservatively estimated that at least $2 billion worth of cryptocurrencies are permanently taken out of circulation due to unknown private keys. How can we plan for the inheritance of crypto assets in a decentralized manner? This article is based on an original piece by Pix, organized, translated, and written by Foresight News.
(Background: DWF Labs was hacked by North Korean hackers for $44 million but has kept it secret until now! ZachXBT: Not surprising at all)
(Additional context: Balancer issues a “final ultimatum” to hackers, 96 hours to return the money: otherwise, all means will be used to find you)

People in the crypto space often say, “Not your keys, not your coins.” This phrase sounds powerful, and it is indeed true. But behind this saying lies an inverted logic — “Only your keys can give you control over your cryptocurrencies.”

If no one else knows how to access your wallet, then at the moment you stop breathing, your crypto assets are essentially “non-existent.” Of course, this doesn’t mean they literally disappear; they still exist on the blockchain ledger, but from an economic perspective, they are no different from being destroyed.

So, how large is the “death buyer” market?

Today, most crypto holders are quite young, with the majority between their late twenties to early forties.

There are very few holders beyond retirement age, which makes the issue of “cryptocurrency loss due to death” easy to overlook. But even so, the data is still quite startling:

• About 60 million people die worldwide each year (based on a global population of approximately 8 billion);
• There are roughly 500 million crypto holders worldwide (meaning 1 in 16 people holds cryptocurrencies);
• Since crypto holders tend to be younger than the global average population, their mortality rate is also lower, with a conservative estimate of about 0.2% annually;
• Based on this, approximately 1 million people (500 million × 0.2%) die each year among holders.

Currently, most cryptocurrencies are still held and managed by individuals, and few have estate plans in place. Even if only 10% of wallets belonging to deceased individuals become inaccessible due to unknown access methods, about 100,000 wallets would become invalid each year. Assuming a conservative average balance of $20,000 per such wallet, approximately $2 billion worth of crypto would exit circulation annually. Moreover, this number will continue to grow over time — after all, the younger generation will gradually age.

Percentage of total crypto “destroyed” annually due to death

This leaves us with a key question: since the advantage of self-custody is the removal of intermediaries, how can we pass on these assets without reintroducing intermediaries?

Inheriting assets not originally designed to be “transferable”

Most current solutions tend to be at two extremes: either simple but fragile, such as storing seed phrases in a bank safe (easy to lose, easy to steal); or secure but so complex that no one is willing to use them. Neither approach is ideal, so I have adopted a compromise — a simple three-step inheritance method that is easy to remember, hard to crack, accessible anytime and anywhere, and guarantees 100% non-custodial (i.e., no reliance on intermediaries). The specific steps are as follows:

Step 1: Build a dedicated single-page website

Create a single-page website using a “rare domain name” composed of 3-4 words — these domain names are not easily found in search engines but should have special significance to you for easy recall. Pay for hosting for more than 10 years in advance and set up automatic renewal to ensure long-term accessibility.

Step 2: Encrypt and convert seed phrase into a string of numbers

Choose a book you like, find the publisher that publishes it most frequently, and buy 10 copies (ensuring each book has identical page numbers and formatting). Then, convert each word of your crypto wallet seed phrase into a number string: find the position of each word in the book, and record “page number – line number – word position in line.” For example, “112, 3, 5” means “page 112, line 3, the 5th word.” Convert all seed phrase words into number strings using this method.

Step 3: Upload the number strings to your dedicated website

Simply publish the converted number strings as a list on your created website, in a format like this:

[Insert example format here]

By the way, this is a real seed phrase corresponding to a number string linked to $500 worth of crypto. However, the website domain is fictional, and the actual seed phrase is hidden inside a certain book. Here’s a hint: I love good detective novels very much. Happy “treasure hunting” to everyone!

I know this might sound a bit “over the top,” and some may think it’s unnecessary, but this method can indeed make asset inheritance more flexible while ensuring security.

You can further enhance security, such as storing the position information in a rare or self-printed book; of course, you can also keep it simple — just place a hardware wallet (Ledger) and a metal plate engraved with the seed phrase in a safe. Otherwise, your crypto might ultimately be “donated” to the blockchain (permanently inaccessible).

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