The Evolution of Inheritance: From Gold to Fiat to Bitcoin - How Bitcoin is Restoring Self-Sovereignty in Wealth Transfer
Yesterday's inheritance planning was as simple as handing keys to your heirs. No third parties involved.
Today's inheritance planning requires numerous intermediaries who will each take a cut on your legacy, leaving your heirs with a fraction of your wealth.
With Bitcoin, tomorrow's inheritance planning will be as simple as handing keys to your heirs. Again.
1. The Golden Age of Inheritance
Before the demonetization of gold that occurred during the 20th century, inheritance was easy.
At your death, your wealth would be passed down to your heirs directly, with no intermediary involved. Heirs were given the keys to the family vault, and they would gain access to their parents’ legacy.
As such, before the 20th century, there was virtually no inheritance tax. Families had freedom and sovereignty over their money. That meant no intermediaries taking a cut during inheritance.
2. The Fiat Era: When Middlemen Took Control
All of this changed with the arrival of the fiat system and its complex legal structures. After people were stripped away from their gold and given fiat paper currencies in exchange, everything started to become much more complicated.
The banking system became ultra-regulated and plagued with intermediaries. Families were stripped of their freedom and required to jump through dozens of hoops just to pass down their wealth to their heirs.
Not only that, but now the government could take a cut as well. There lies the magic of the fiat system: no control, no sovereignty, no privacy, and a lot of middlemen!
3. Bitcoin: A Return to Self-Sovereign Inheritance
Bitcoin changes this. With the return to sound money that you can truly own, individuals and families can easily and securely pass down their wealth, without any intermediaries involved.
It’s as simple as handing your keys to your heirs. No more third-parties, no more taxation.
Bitcoin gives sovereignty and agency back to families.
4. Distributing Keys: The Digital Architecture of Bitcoin Inheritance
Bitcoin ownership is all about owning Signing Keys. It follows that Bitcoin inheritance is all about securely passing down these Signing Keys to the heirs.
But here’s the catch: you can’t let anyone in on the Signing Keys but the heirs.
Whereas gold and physical keys are tangible objects, Bitcoin keys are pure information. Anyone who would get access to the signing keys could easily duplicate them and rob the digital vault.
Bitcoin holders need to create very robust vaults so that their security does not rely entirely on one only key, which could easily be compromised.
Instead, Bitcoin holders need to become architects and engineer robust vaults with multiple keys which are distributed among guardians and heirs in such a way that their wealth can safely be passed down to the next generations.
Enter multi-signature wallets. Multi-signature setups allow for multiple keys to be required in order to sign a transaction and make it valid.
For instance, a 2-of-3 multi-signature setup requires any two out of three Signing Keys to access the funds, providing both security and flexibility.
The tremendous increase in security multi-signature provides, coupled with the ability to distribute some of the keys to heirs and guardians, allows for the design of incredibly secure Bitcoin vaults that will ensure the heirs, and only them, will have access to your wealth.
5. Reclaiming Financial Sovereignty
Fiat money not only robs people of their purchasing power over time, it also robs individuals and families of their sovereignty.
Whereas a few centuries ago estate was passed down from one family member to another without any intermediary involved, today’s families lose part of their wealth between each generation.
Intermediation is inherent to the fiat system. Governments, banks, lawyers and estate planners are all taking a cut of people’s savings in one way or another.
But Bitcoin fixes this.
By taking back ownership of our money we can bypass all the parasites that live on the back of our inefficient and flawed fiat system. It’s on us Bitcoin holders to build multi-generational vaults that our heirs will inherit, without any third-parties involved.
Some argue that Bitcoin inheritance is too complex, but with the right tools, it's actually simpler and much cheaper than “conventional” methods.
I built a comprehensive protocol that will walk you through the process of designing your own multi-generational vault so you can eliminate the risk of loss and theft and ensure your Bitcoin wealth will be passed down securely.
It’s completely FREE and open-source. Find it here: protocol.thebitcoinbackup.com