Have you ever wondered where our digital assets go if they get lost? Have you ever thought about the destination of NFTs, cryptocurrencies, or any type of digital property that, just like physical and tangible assets (a watch, a car, a ring), we can literally lose? Although it might not be a frequent question, it is far from trivial, given the ongoing process of digitizing our properties. Users demanding increasingly secure systems are finding themselves in situations where, paradoxically, they are unable to recover passwords, recovery keys, or third-party backup codes due to the very security measures they requested. The same issue arises, as addressed by the Milan Court in a first instance on February 9, 2021, in cases of digital inheritance: what happens when there is a need to manage the transfer of digital inheritance from a deceased person to a rightful heir (for example, a wallet with valuable NFTs passed from a deceased father to a daughter)? Can digital assets be inherited? And if so, how can heirs access these tightly secured digital properties in an almost impregnable wallet, especially if, due to unfortunate circumstances, the access keys were not transferred? What happens to these unrecoverable digital assets?
To grasp the magnitude of the issue, consider that, according to on-chain analysis firm Cypherock, we have already lost 6 million Bitcoins to date (and as of May 1, 2024, the value of a single Bitcoin is around €53,000.00, so you can do the math and assess the economic, reputational, financial, and multidimensional impact). Furthermore, according to various analysts, we are likely to lose another million Bitcoins in the next 100 years, exacerbating not only the economic loss for the owners but also the urgency for everyone to become aware of not just the immediate financial performance, but also the after, the ifs, the wheres, and the hows to protect, safeguard, access, secure, and recover our vulnerable digital assets.
From Bitcoin, let’s now turn to NFTs. Since the first experiments in commercialization in 2014, through the boom and the pandemic epilogue, newspapers and magazines worldwide have questioned whether the rampant demand for these assets would translate into a consolidated collecting tradition or a flop. Today, almost a decade after the first artist NFT sale (Quantum by Anil Dash and Kevin McCoy in 2014), there have been various and polymorphic developments and responses. A case in point is the famous first tweet in history, typed and published by the social media CEO, Jack Dorsey, which simply read: “just setting up my first twttr.” This simple string of words, due to the pioneering significance of the social network, was sold for £2.3 million—a record that shocked the world and fueled the mad rush for other digital ‘firsts’ (such as those from Facebook, Instagram, and other social networks). However, a subsequent investigation into the value evolution of various NFTs conducted by VICE revealed that, just two years after the sale of this NFT (2021>2023), its value now stands at only £1,200, sending a clear signal about the predicted fate that hovered around NFTs. Another investigation by The Cryptonomist into the iconic Bored Apes also reported that from the peak in 2022 (when the company owning them, the BAYC project, was valued at $4 billion) to today, their value has decreased by 90%, reinforcing the idea that some icons of the last five years of 3.0 economy have not yet provided a positive answer to the question. And just like tangible assets that often lose value and are therefore resold, stored away, or simply lost, what is happening to these digital meteoric properties? To once again get a sense of proportion, consider that there are over 420 million crypto owners active in the world—roughly the population of the entire European Union. Imagine how many digital properties might circulate in a demographic block as large as our Union: thousands, millions… And if we pair this data with the estimate from Privacy HQ, which, in a survey confirmed by other sources, reported that “half of the respondents lost their access keys to the wallets where they stored their NFTs,” the scale of the problem is euphemistically enormous. We are talking about thousands, and likely millions, of lost digital properties. Virtually unrecoverable. Forever.
Having identified the volumes, let’s focus on the law, contextualizing the resolution of a case by the Milan Court (specifically the trial held on February 9, 2021, on the inheritance of a post-mortem wallet), which in the first instance had to address the limits and novelties of such a case. The court ruled that, being analogous to a work of art due to its unique and non-fungible value, the NFT possesses the necessary properties to be inheritable—inheritability that was indeed granted to the heirs in the case. However, not having access to the wallet containing them, the process of acquiring legally absorbable digital properties (NFTs and likely residual cryptocurrencies) could not be completed. Unlike other channels such as social media, email, or miscellaneous site registrations, which remain somewhat dynamic in the event of lost and restored access keys, the wallets that lock down our digital properties are instead sealed, impervious, and virtually impregnable without the keys. And it is here that the maximum security guaranteed by these sophisticated systems could turn— as it did—into a limit, a dead end, a cul-de-sac that consigns thousands and millions of digital properties to a digital hyperuranium, practically unknown.
Talking about a ‘digital graveyard’ or ‘necropolis’ is, therefore, neither far-fetched nor distant from what is happening; we are accumulating a dense, complex, and parallel repertoire of NFT artworks and ‘digital numismatics’ of the numerous cryptocurrencies that, for our future generations, has all the makings of a real archaeological scene to dig up, unearth, and re-contextualize the sealed yet fragile society we are building.
Market and Data
_old_Become an author
Wallet
