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Ripple board member and XRP Ledger co-creator David Schwartz has proposed a Bitcoin inheritance method that splits identical hardware wallets between relatives and their shared PIN between friends, requiring both groups to cooperate before funds can be recovered after his death.
Security experts note the approach relies on a duplicated recovery phrase rather than true multisignature security, meaning anyone with one wallet and the PIN could access the funds outright.
Schwartz suggested creating two identical bitcoin cold storage hardware wallets using the same 24-word recovery phrase and configuring both devices with the same PIN.
Each wallet would then be entrusted to two separate relatives, while the PIN would be shared with two trusted friends.
During the owner’s lifetime, neither relatives nor friends would possess enough information to independently access the Bitcoin. Following the owner’s death, both groups would need to cooperate before the assets could be recovered.
According to Schwartz:
“One way” to manage inheritance is to separate physical possession of the wallet from the knowledge required to unlock it.
The proposal deliberately divides physical custody from authentication, reducing the likelihood that any single individual could access the Bitcoin alone.
While the proposal appears secure on the surface, security experts note that this bitcoin cold storage arrangement should not be confused with a true multisignature wallet.
Unlike multisignature systems that require multiple independent private keys to authorize a transaction, Schwartz’s approach relies on duplicate copies of the same recovery phrase.
Consequently, anyone possessing one wallet and the correct PIN would gain complete access to the funds.
Estate planning company Unchained explains that standard two-of-three multisignature setups require multiple unique keys before Bitcoin can move, significantly reducing the impact of a compromised device or credential.
Schwartz’s proposal instead divides a single credential into two separate components—physical possession and secret knowledge.
The renewed discussion surrounding bitcoin cold storage follows the widely reported Coldcard firmware issue that weakened randomness during seed generation on affected wallet versions.
Wallet manufacturer Coinkite has already released corrected firmware, but previously generated recovery phrases cannot simply be repaired through software updates.
Users affected by the flaw must generate entirely new recovery phrases and transfer their Bitcoin to newly created wallets.
Researchers from Block’s security team traced the issue to a deterministic software fallback and limited reseeding process.
The researchers stated:
“We have not done full empirical testing to confirm exploitability.”
However, they also reported evidence suggesting active theft campaigns targeting potentially affected wallets, highlighting why securely generated recovery phrases remain the foundation of effective bitcoin cold storage.
Earlier blockchain analysis estimated that four suspected attack waves may have involved approximately 1,815.75 BTC across more than 5,000 addresses, although investigators caution these remain on-chain estimates rather than confirmed losses.
Security specialists emphasize that bitcoin cold storage alone cannot guarantee successful inheritance.
A comprehensive estate strategy should also include written instructions, documented ownership records, legally recognized wills or trusts, and clear recovery procedures that executors can follow during emotionally difficult circumstances.
Unchained advises Bitcoin owners to thoroughly document their custody model and ensure executors understand how wallet recovery procedures function before an emergency occurs.
The inheritance model also depends heavily on long-term trust. Lost devices, forgotten PINs, family disputes, premature disclosure, or unavailable participants could all prevent heirs from accessing the assets despite careful planning.
Schwartz never presented the proposal as a commercial product or audited framework. Instead, his suggestion serves as another example of how Bitcoin owners continue exploring practical inheritance solutions as self-custody adoption grows.
Many cybersecurity professionals recommend combining bitcoin cold storage with multisignature wallets, durable metal seed backups, professional estate planning, and periodic recovery testing using small balances before securing substantial holdings.
As Bitcoin ownership expands globally, inheritance planning is rapidly becoming just as important as asset protection itself.
Schwartz’s proposal reinforces one key lesson: bitcoin cold storage offers exceptional protection only when paired with strong operational security, legally sound estate planning, and carefully tested recovery procedures.
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