Why We Don't Use Blockchain for Digital Inheritance (And Neither Should You)

Every few months, someone asks why Inheritfy isn't built on blockchain. The pitch sounds compelling: immutable records, no central authority, smart contracts that execute automatically. It seems like the perfect technology for digital inheritance. But after spending considerable time evaluating blockchain solutions, we concluded they're fundamentally wrong for this problem. Here's why.

The Immutability Problem

Blockchain's biggest selling point—immutability—is actually its biggest liability for inheritance planning. Life changes. You get divorced and need to remove an ex-spouse as beneficiary. You have another child. A trustee dies and you need to designate a replacement. Your relationship with a family member deteriorates. These aren't edge cases; they're normal life events.

On a traditional system, updating beneficiaries takes seconds. On a blockchain, every change requires a new transaction, which means gas fees, which means cost. More importantly, some blockchain inheritance schemes make changes genuinely difficult by design—that's the "trustless" part. But inheritance planning isn't a one-time event. It's something you adjust throughout your life as circumstances change.

Worse, mistakes on blockchain are permanent. Sent documents to the wrong address? They're gone. Typo in a beneficiary's wallet address? Irrecoverable. Traditional systems have customer support, account recovery, and human judgment for edge cases. Blockchain has cryptographic finality.

The Cost Reality

Let's talk actual numbers. Storing data on Ethereum costs roughly 20,000 gas per 256 bytes—that's the base cost just for existing on-chain. At typical gas prices of 20-50 gwei, storing a single kilobyte costs around $2-5. A megabyte would cost $2,000-5,000. A modest document vault with a few PDFs and images? Tens of thousands of dollars in storage costs alone.

"But you don't store files on-chain directly," blockchain advocates say. "You store them on IPFS and put the hash on-chain." True, but now you've just recreated the exact same problem blockchain was supposed to solve: your files live on someone else's infrastructure, and you're trusting that infrastructure to persist for decades. IPFS files that aren't actively pinned get garbage collected. The decentralized storage dream requires either paying ongoing pinning fees or hoping someone else cares enough about your files to keep them available.

There's also the transaction cost for every interaction. Deploying a smart contract, updating beneficiaries, triggering releases—each action costs gas. During the 2021 bull market, simple Ethereum transactions regularly cost $50-200. Even in calmer times, you're paying $5-20 per operation. Compare that to a traditional database where updates are essentially free.

The Oracle Problem

Here's the fundamental issue nobody in the blockchain inheritance space has solved: how does a smart contract know you're dead?

Smart contracts can only act on information that exists on-chain. Death certificates don't exist on-chain. Obituaries don't exist on-chain. The contract needs some external system to tell it "this person has died, release the assets." That external system is called an oracle.

But wait—if you need a trusted oracle to verify death, you've just reintroduced the trusted third party that blockchain was supposed to eliminate. Your "trustless" inheritance system now depends entirely on trusting the oracle. If the oracle is compromised, hacked, or simply goes offline, your inheritance system breaks. You've added blockchain complexity without gaining blockchain benefits.

Some projects try to solve this with dead man's switches—if you don't check in, assets release automatically. But that's exactly what we do, without blockchain. The check-in mechanism isn't the hard part. The hard part is building something reliable enough that it'll still work in 30 years.

Chain Longevity

Will Ethereum exist in 30 years? Probably. Will the specific Layer 2 chain your inheritance smart contract is deployed on? Much less certain. Will the bridge between that L2 and Ethereum mainnet still function? Even less certain. Will gas costs be reasonable enough for your heirs to actually claim their inheritance? Complete unknown.

The cryptocurrency space moves fast. Today's hot chain is tomorrow's ghost chain. EOS raised $4 billion and was supposed to replace Ethereum—now it's a footnote. Solana has had multiple extended outages. Luna collapsed overnight, taking $40 billion in value with it. These aren't obscure projects; they were top-10 cryptocurrencies.

We're asking people to trust their family's most important documents to a technology stack that might not exist, might be prohibitively expensive to use, or might have migrated to some other system entirely by the time it's needed. Meanwhile, HTTP has worked basically unchanged since 1991. S3 has been running since 2006 with 99.999999999% durability. Boring technology has a much better track record for "still working in 30 years."

The User Experience Nightmare

Picture this: you've died, and your 68-year-old mother needs to access the documents you left for her. In a traditional system, she gets an email, clicks a link, maybe enters a verification code, and downloads files. Sad but straightforward.

In a blockchain system, she needs to: install a wallet (but which one?), secure her seed phrase (without losing it), acquire cryptocurrency to pay gas fees (from where? with what?), connect to the right network (is it Ethereum mainnet? Arbitrum? Polygon?), find the correct contract address, and execute a transaction. If she makes any mistake at any step, her inheritance could be lost forever. There's no customer support. There's no "forgot password." There's just cryptographic finality.

The technical barrier isn't a minor inconvenience—it's a fundamental design flaw. Inheritance systems need to work for everyone, including people who have never heard of MetaMask and shouldn't need to learn about gas fees while grieving.

Smart Contract Risk

Smart contracts are immutable, which means bugs are forever. The DAO hack, the Parity wallet freeze, the Wormhole bridge exploit—hundreds of millions of dollars lost to smart contract vulnerabilities that couldn't be patched because the code is immutable by design.

An inheritance smart contract needs to be perfect at deployment, then remain secure against attacks that haven't been invented yet, for decades. That's not how software works. Every complex system has bugs. The question is whether you can fix them when discovered. Traditional systems can patch vulnerabilities immediately. Smart contracts require elaborate upgrade mechanisms that often reintroduce the central authority blockchain was supposed to eliminate.

And smart contract audits aren't guarantees. Audited contracts get exploited routinely. The audit only covers known vulnerability patterns at audit time. New attack vectors emerge constantly.

Regulatory Uncertainty

Cryptocurrency regulation is still being written. Different jurisdictions have wildly different approaches, and those approaches keep changing. An inheritance mechanism that's perfectly legal today might be problematic in five years. Your heirs might face reporting requirements, tax implications, or access restrictions that don't exist yet.

Traditional financial and legal systems, for all their flaws, have centuries of precedent. Courts know how to handle disputed wills. Banks know how to transfer assets to estates. Nobody knows exactly how courts will treat smart contract inheritances when the disputes inevitably arise.

What We Use Instead

Our approach is deliberately boring. Files stored on S3 with 11 nines of durability. AES-256 encryption, which has been studied for decades and shows no practical weaknesses. PostgreSQL database—technology that's been reliable since 1996. HTTPS for transport. Standard, proven, boring infrastructure that just works.

For client-side encryption, we use Shamir's Secret Sharing—a cryptographic technique from 1979 that's mathematically proven secure. Your key is split among multiple parties; a threshold must combine shares to decrypt. No blockchain required, no gas fees, no wallet management. Just math that works.

The check-in mechanism, death verification through trustees, and file delivery all run on traditional infrastructure. When something goes wrong—and eventually something always goes wrong—we can fix it. We can issue refunds, recover accounts, work with families through difficult situations. That human flexibility isn't a bug; it's a feature.

When Blockchain Does Make Sense

Blockchain isn't useless. It's genuinely good for cryptocurrency inheritance, where the assets are already on-chain. If you hold significant Bitcoin or Ethereum, you need a plan for passing on your private keys or seed phrases. We support that use case—you can store your crypto recovery information in your vault, encrypted and delivered to heirs through our traditional verification system.

But using blockchain to manage the inheritance process itself? That's using a hammer because hammers are interesting, not because you have a nail. The technology creates more problems than it solves for this particular use case.

The Bottom Line

Blockchain is optimized for trustless transactions between parties who don't know each other. Inheritance is the opposite—it's about trust, family, relationships that span decades. The technology's strengths (immutability, trustlessness, decentralization) become weaknesses when applied to something that needs flexibility, human judgment, and long-term reliability.

We want Inheritfy to work when your family needs it, even if that's 40 years from now. That means using technology with a proven track record, keeping costs predictable, making the system accessible to everyone regardless of technical sophistication, and maintaining the ability to fix problems when they arise.

Blockchain doesn't offer any of that. So we don't use it.