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Another modern-technology problem: how do you pass on your cryptocurrency wealth when you die? Wills, trusts, estate law, and legal force are meaningless if you

by sowbug 9y ago

Another modern-technology problem: how do you pass on your cryptocurrency wealth when you die? Wills, trusts, estate law, and legal force are meaningless if you've forgotten to provide your private keys to next of kin.

WorldMaker 9y ago
You can print out private keys (and passwords, etc) and put them in Trust. If you are feeling paranoid that you can't trust your Trustees, you can use something like Shamir's Secret Sharing algorithm [1] to give individual Trustees only a portion of the private keys (or passwords, etc). I explored at one point if there was a market for an app to automate that last part, but so far such noodling keeps winding up at a less generally useful Keybase. [1] https://en.wikipedia.org/wiki/Shamir%27s_Secret_Sharing https://en.wikipedia.org/wiki/Shamir%27s_Secret_Sharing
- sowbug 9y ago
  Trust is only part of the problem. It's also competence on the part of the recipients to combine the Shamir parts, correctly pick Segwit vs Legacy chains, not send BCH to a BTC address, not email their private keys to the Geek Squad, and then not get it all swiped on their malware-infested PC.
  - WorldMaker 9y ago
    The joke answer is "At that point, what do you care, you're dead?" The long answer is that's all part of setting up a Trust for your estate, picking Trustees that can execute your Trust responsibly/competently when the time comes, and picking recipient heirs as well that can benefit from your property. All of that is a long conversation to have between you and your lawyer and your heirs. (In that way, Shamir's Secret Sharing is simply a modern technical/mathematical equivalent to bequeathing your heirs a puzzle box with a safety deposit key in it. If your heirs can't solve the puzzle box, do they deserve the contents of that safety deposit box?) That said, there probably is a role for some of the cryptocurrency exchanges to play as possible Trustees in an estate, just as banks large and small play into many estates for the transfer of wealth. It could be a feature the exchanges could offer whereby they help liquidate a cryptocurrency as a part of executing a Trust. (I would also not be surprised if there was at least one person building a Rube Goldberg machine in Ethereum smart contracts where on proof of their death the contracts execute transactions to an exchange sell order with forwarding instructions to Western Union telegraph the money to a loved one's postal address.)

by sowbug 9y ago

WorldMaker 9y ago

You can print out private keys (and passwords, etc) and put them in Trust. If you are feeling paranoid that you can't trust your Trustees, you can use something like Shamir's Secret Sharing algorithm [1] to give individual Trustees only a portion of the private keys (or passwords, etc). I explored at one point if there was a market for an app to automate that last part, but so far such noodling keeps winding up at a less generally useful Keybase. [1] https://en.wikipedia.org/wiki/Shamir%27s_Secret_Sharing https://en.wikipedia.org/wiki/Shamir%27s_Secret_Sharing

sowbug 9y ago
Trust is only part of the problem. It's also competence on the part of the recipients to combine the Shamir parts, correctly pick Segwit vs Legacy chains, not send BCH to a BTC address, not email their private keys to the Geek Squad, and then not get it all swiped on their malware-infested PC.
- WorldMaker 9y ago
  The joke answer is "At that point, what do you care, you're dead?" The long answer is that's all part of setting up a Trust for your estate, picking Trustees that can execute your Trust responsibly/competently when the time comes, and picking recipient heirs as well that can benefit from your property. All of that is a long conversation to have between you and your lawyer and your heirs. (In that way, Shamir's Secret Sharing is simply a modern technical/mathematical equivalent to bequeathing your heirs a puzzle box with a safety deposit key in it. If your heirs can't solve the puzzle box, do they deserve the contents of that safety deposit box?) That said, there probably is a role for some of the cryptocurrency exchanges to play as possible Trustees in an estate, just as banks large and small play into many estates for the transfer of wealth. It could be a feature the exchanges could offer whereby they help liquidate a cryptocurrency as a part of executing a Trust. (I would also not be surprised if there was at least one person building a Rube Goldberg machine in Ethereum smart contracts where on proof of their death the contracts execute transactions to an exchange sell order with forwarding instructions to Western Union telegraph the money to a loved one's postal address.)