Kosign.xyz Wants to Solve Crypto’s Biggest Blind Spot: Inheritance

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Billions in Bitcoin are locked forever due to lost keys. Kosign, a newly launched open-source tool, thinks it has found a way to fix digital inheritance without sacrificing present-day security.

The story of crypto is littered with cautionary tales: hard drives tossed in landfills, seed phrases lost in fires, families shut out of fortunes because a single password died with its owner. Analytics firms estimate that 20% of all Bitcoin — worth more than $100 billion at today’s prices — may be permanently inaccessible because of lost or forgotten keys.

That isn’t just a crypto problem. As more of our lives move online, we accumulate not just coins but also passwords, 2FA codes, and identity credentials that our families may one day need. Yet the tools most people rely on — hardware wallets, password managers, even custodial services — weren’t designed for multi-generational continuity.

A new project called Kosign.xyz is launching with a different idea: social recovery for cold storage. It’s open-source, offline, and aims to solve the inheritance problem without creating new risks.


The Inheritance Paradox of Digital Security

Every major security tool today creates what the Kosign team calls a circular dependency trap:

  • Hardware wallets protect funds but rely on a single seed phrase. If that phrase is stolen, funds are gone. If it’s lost, recovery is impossible.
  • Password managers are excellent for everyday security, but the master password can’t be stored inside the vault itself. Store it elsewhere, and you’ve just created a second vault to secure.
  • Inheritance planning is almost nonexistent. If you share your keys now, you’ve already compromised security. If you keep them secret until death, there’s no guarantee your heirs will know how to access them.

This paradox explains why so much digital wealth vanishes: systems designed for maximum security today are hostile to long-term resilience.

“People assume a hardware wallet or a password manager is a complete solution,” a Kosign contributor explains. “They’re not. They’re fragile by design, because they rely on a single secret that can be lost, stolen, or destroyed.”


Kosign’s Model: Threshold Cryptography Meets Paper Vaults

Kosign takes a different approach. Instead of relying on a single key, it uses threshold encryption to split sensitive data into multiple encrypted “shares.”

  • Create Offline: Users disconnect their device, enter seed phrases, master passwords, or codes into the Kosign app, and generate an encrypted vault.
  • Print and Distribute: The vault is split into shares, which can be printed and stored in different safe places: a home safe, a bank deposit box, or with trusted relatives.
  • Recover by Quorum: To unlock the vault, a minimum number of shares (e.g., 3 of 5) must be combined. No single share reveals the secret, and losing one or two copies won’t break recovery.

In practice, this is like applying multi-sig logic to inheritance planning. Instead of requiring three signatures on a blockchain wallet, Kosign requires three physical shares to reconstruct your vault.

“Think of it as a safe deposit box that requires multiple family members to open,” the team said. “No one person has total control, but together, the system is durable.”


Why It Matters

The idea of social recovery has floated around crypto circles for years, most notably popularized by Ethereum co-founder Vitalik Buterin. But most implementations remain online, smart contract-based, and thus limited to on-chain assets. Kosign’s innovation is bringing social recovery offline and applying it to any kind of secret: Bitcoin seed phrases, email credentials, 2FA backups, even encrypted documents.

That shift addresses a problem traditional solutions ignore:

  • Hardware wallets protect coins but not passwords.
  • Password managers protect logins but not crypto seeds.
  • Custodial services protect inheritance but require trusting a company that might not exist in 20 years.

Kosign sidesteps all three by being offline, open-source, and non-custodial.


Beyond Crypto: The Broader Use Case

Although Kosign is launching with a clear crypto angle, the team emphasizes that it isn’t just about coins.

“Families need a way to preserve digital continuity,” one contributor said. “That could mean crypto, but it could also mean the login that controls a family business’s email, or the 2FA device for a bank account. These are things you don’t think about until it’s too late.”

By making it possible to split and distribute encrypted shares, Kosign could appeal not only to crypto users but also to lawyers, businesses, and families who see inheritance planning as a security gap.


Open Source, Simple Pricing

Kosign’s unlock tool is being released as open-source software under a permissive license, allowing anyone to audit or fork it. There is no subscription model or lock-in. The software is free to use, with printing of extra shares priced at $5 each. A five-share “family plan” costs less than most single hardware wallets.

That affordability, paired with an open-source ethos, may help Kosign gain traction in communities skeptical of custodial inheritance services.


The Road Ahead

Inheritance has long been a thorny subject in crypto, with many users preferring to “figure it out later.” But with digital assets now representing trillions in value globally, later may no longer be good enough.

By combining offline cold storage with social recovery mechanics, Kosign positions itself as one of the first serious attempts to tackle digital inheritance head-on.

Kosign.xyz is live now and available for anyone to try.

👉 Explore more at Kosign.xyz