E202 Bitcoin Risk of Theft vs. Risk Loss

<p>Bitcoin and cryptocurrencies are currently a popular topic. Here, we are discussing the risk of theft verses risk of loss with these types of funds, specifically why that matters in the context of estate planning. We are by no means experts in this subject, but we’ve done our homework.</p> <p><a href= "https://anthonyspark.com/estate-planning-for-bitcoin/">Estate planning for Bitcoin</a> can feel like you are in a Divinci Code movie, with secret codes and memorized phrases. It can feel like a treasure map, compared to your traditional banking.</p> <p>There is so much advice out there online telling you to take some extreme measures to prevent hackers and thieves from plundering your stash. However, you have to make sure you don’t overboard, at the expense of increasing your risk to another type of catastrophic loss, simply losing your Bitcoin!</p> <h2>Estate Planning for Bitcoin</h2> <p><img class="aligncenter size-medium wp-image-9485" src= "https://anthonyspark.com/wp-content/uploads/2021/01/Estate-planning-for-bitcoin-300x200.jpg" alt="Estate planning for bitcoin" width="300" height="200" /></p> <p>One of the most common ways of holding your cryptocurrency is on “hardware wallets.” That means that you have a device, not connected to the internet, that has access to your key (the fancy word for your secret password). One way to look at it is that it’s like your ATM pin. The only difference is that you can visit a bank to reset your pin, but when it comes to cryptocurrency, no one can help you recover it. We’re not talking about a simple passcode with 7 to 8 letters; we’re talking a combination of 24 words that will allow you access to your bitcoin (also called a seed phrase).</p> <p>In terms of security, you don’t want to leave this phrase accessible to anyone. The internet goes to great lengths to tell you how to keep this secure. They suggest never taking a photo, which is typically stored on your computer, phone, or cloud. This also goes for storing it on your computer. Again – hackable.</p> <p>They sugge