His father, Michael Moody, knew his 26-year-old son had been mining Bitcoins — today worth thousands of dollars each — but had no idea how many he had or how to find them. Michael Moody has spent the past three years seeking the answers.
“My son was actually one of the earliest people to mine it,” said Moody, a retired software engineer. “He used his computer at home to mine Bitcoins when you actually could do it that way and he had a few we think.”
The decentralized and unregulated nature of Bitcoin means that without the keys to access his son’s digital wallet, hosted by blockchain.info, Moody has no way of accessing any funds. And it’s almost impossible to find out whether a person is sitting on peanuts or a fortune, as wallets can contain an unlimited number of unique addresses, or identifiers, with Bitcoins assigned to each. Without knowing every address, it’s not possible to locate every piece of currency.
Blockchain.info did not respond to requests for comment on this story.
“There is no authority that could be appealed to fix this,” Nolan Bauerle, director of research at cryptocurrency analysis website CoinDesk, said of an individual’s Bitcoin stash becoming inaccessible after they pass away. “Those coins would be abandoned.”
Moody says entrepreneurial young people, unfamiliar with emerging digital currencies, need to be better educated about the steps needed to be taken to ensure their investments are properly secured, both for themselves and for future heirs.
In the 1990s your digital legacy that might have just meant email accounts, but today extends to passwords, encrypted device backups, photo archives, personal data held by search engines, advertisers and social networks — and now cryptocurrencies.
Issues around inheritance include initial coin offerings, the process of raising money from investors by offering them virtual “tokens” instead of shares. In 2017, about $3.5 billion was raised worldwide from ICOs, according to data compiled by CoinDesk.
The relatively nascent practice of holding an ICO means legislation is yet to catch up, meaning questions around what happens to a person’s rightful tokens when they die are numerous. But following a number of lawsuits, U.S. lawmakers will soon decide whether a token acquired from an ICO will be considered no different to a share bought through an IPO.
“My bet is that ICOs, when issued by a company, they’re going to be considered securities,” said Peter Henning, a professor at Wayne State University Law School and veteran SEC and Justice Department lawyer. “If they are securities, then just like stock or bonds you can put them in your will and pass them down.” […]