A crypto wallet could be understood as a software program which contains unique public and private keys, property of the owner the crypto assets held and managed therein. A crypto wallet should be able to interact with a blockchain in order to buy, sell, transfer and control the balance of cryptocurrency.
In my own words, a crypto wallet could be compared to a traditional bank account where you keep access to your crypto currency and could be opened: 1) through a private company known as a centralized exchange, such as Binance, for example, (in my example, compared to a bank), or 2) through a decentralized exchange, such as Uniswap, with no private owners or central authority (the closest example that I could find could be a partnership without legal personality of its own).
It is also important to mention that there are two main ways to hold crypto assets: through a hot wallet (which means, through an online service rendered by a centralized or by a decentralized exchange) or through a cold wallet (which means offline, through an external hardware that you keep in your safe and that is connected to an exchange when there is a need to operate the crypto currency). The reasons why a person chooses a hot or a cold wallet and a centralized or decentralized exchange could be discussed in another article, but believe me, there are many.
In all cases, the crypto currency holder, needs keys and passwords to access to its crypto currency, which could vary depending on the type of exchange chosen; but what every wallet holder needs regardless of any choice taken to hold crypto assets, is the famous “12- word seed phrase”.
The “12-word seed phrase” is your key to unlock access to a crypto wallet and is also the ultimate recovery tool for wallets on the blockchain. For example, if someone passes away, such information is used to recover the wallet in any device.
The 12-words seed phrase is so important, that is someone shares such information to anyone, the full balance of the wallet could be sent irreversibly to another wallet without any restriction; and that is why I mentioned that such phrase should be kept in a safe or, if the wealth is worth, in a private bank’s safe.
But, ¿what happens if, after the crypto assets-owner passes away, the executor of the estate loses the 12-word phase, or worse, commit fraud with such information? ¿Who should be the person to trust in such cases? Because, literally, the person who has such information could empty the wallet which could contain a seventy-million-dollar NFT, among other assets, for example.
In my last publication, I made reference to the use of wealth vehicles to hold crypto-assets, such as those who could serve as a way to reach an ordered succession, in this case a Trust.
Trusts were born in Northern Europe, when landlords needed a trust-worthy party to temporarily hold and manage their estate (for example, their land) while they fight in some war (for example, the crusades).
A trust is an agreement could be of many types; but in this case, I will refer to a trust settled for wealth managing purposes. In this case, a trust could be defined as an agreement through which the owner of a property (a settlor), contributes such property to the Trust, which is managed by a trustee (could be a regulated institution that is obligated to execute the settlors’ will when a given event occurs) and where beneficiaries, who could be the same settlor or anyone else (regularly their children) receive the property and its profits, if any, at the time of execution of the trust. In many cases, the execution of a trust is carried out when the settlor passes away.
Now that we understand what a trust is, let me propose an idea: ¿What if this individual with the 70 million NFT in his/her wallet, incorporates two trusts, to which 6-words seed phrase are contributed to each trust and where a third trust is beneficiary of the 12-words seed phrase?
Of course, the third trust has as an objective, the distribution of the crypto-assets held in the wallet that could be recovered by the 12-word seed phrase and have as beneficiaries the settlor’s children.
Problem solved.
When the individual passes away, each Trustee would deliver the words seed phrase to third trust, and this trust will manage and distribute the crypto currency or the NFTs to the Beneficiaries’ wallets. In such case, the individual did not need a sole person to trust and deliver such an important part of his/her wealth, but a committee designed by the individual will make such distribution.
Maybe sounds a it complex, but if the wealth is important, I believe the individual would sleep like a baby until the end of his/her happy life.