Topic: Am I the only one that thinks off-site pvt key storage is stupid? (Read 162 times)

You obviously have a trusting mind...  

John Doe runs a ponzi and scams millions.  Government gets involved.  They have the "Central Death Authority" in that country issue his death certificate.  Coins get transferred out to Escrow, who release them to government.

The idea is centralized, which goes against Bitcoin.  The point of failure is the online death database, which can be easily manipulated legally or illegally. 

Thanks for your thoughts.  The method described above would not allow the authorities to gain access to your assets, they would be fully encrypted and only openable and distributable through the random verifiers and random estate trustees and overseers on the network.  Please read through the above scenario again and give me your thoughts.  The Pvt keys are encrypted with random master node keys and the master nodes don’t even know they hold the keys until you die.  No authorities involved, only network participators. 

An article published on Fortune.com (http://fortune.com/2017/09/26/cryptocurrency-bitcoin-death/) tells a story of a dead man's family who tried to recover his bitcoins not knowing his private key from Coinbase. No names, no proof of success, so may be it's just Coinbase's paid article... 

I think you won't be the first to point this out (though perhaps maybe the first poster I've seen just calling it plain stupid haha). And this is precisely why the "solution" of having a user-oriented wallet service like Coinbase or storing coins on exchanges are extremely popular for newcomers to Bitcoin - despite the warnings and advice we'd normally tell them about keeping full and absolute control of their own private keys (and hence, their funds).

I cannot tell you just how many people I've tried to convince to move their funds out of an exchange or online wallet... even a simple SPV wallet can't convince them simply because they still want a way to recover a lost account by email or phone. And some people actually want to trust a centralized entity to safeguard their funds. And these people aren't my mother or grandfather either... these are my peers. Highly educated mostly, and white collar to the bone.

That allows authorities to get your coin.   

This is a major barrier to everyday people entering crypto.  This actually makes crypto more difficult to work with than using a bank.  A bank makes you go through KYC, takes a picture of your driver's license, and then opens up an account for you.  And if you die, your family can take your death certificate to the bank and get your money out.  With crypto, there is ZERO fail safe barring printing out your PRVT keys and leaving instructions in your will on how to find and open your wallets.  Roughly 55% of Americans do not have a will, the % is much higher in less developed countries.  So how does a family retrieve your keys when you die?  Or do your bitcoins just go... poof!  

No one is smart enough to conceive of all the scenarios that will occur after they die.  So leaving it to smart contracts or leaving it to each of us individually to do our own hair-brained estate planning doesn't work either.  There has to be some kind of a hybrid solution here where we build-in decentralized security and bounty incentivized trust through oversight. 

For example, a multi-key wallet with a dead mans switch that is scanning the Central Death Authorities of all the countries in the world.  If a users death certificate is found on the CDA's database, then a masternode network which has two responsibilities, 1) act as a typical masternode, hold coins-get paid, and 2) hold coins to get access to bounties which are a small % of a users estate but must verify that death certificates that come to them.  The masternodes were randomly chosen when the user added their last private key, they don't even know it until the death certificate is detected, so it makes the wallet virtually unhackable.  At least three masternodes have to verify the death certificate and only that will create a complete key to open the will and private keys attached to the wallets that the deceased held.  All the funds are then moved into a single currency into an escrow to be distributed to the beneficiaries of the will.  The wills executor will also be randomly chosen from the masternode network and require at least two approvals from two more random masternode overseers before money can be moved from the escrow to the beneficiaries.  This prevents collusion and eliminates fraud.  The same type of estate trustee system can be set up for testamentary trusts as well. 

This all has to be done in a frictionless and secure manner that people can rely on.  But, until a system like this is in place, crypto will be held back from mainstream adoption.  

I always like to put the mom test to these ideas.  Right now, my mom won't get into crypto for the simple reason that she doesn't know what will happen to her money when she dies... and asking anyone that isn't tech savvy, not just old women, to print out their keys, put them in a safe and make reference to them in their will... is more friction than opening a bank account.

I would love to hear all of your thoughts.