Do your bitcoins die with you?

[RobinW]

As a newbie I spent some time online trying to learn what I needed to know about bitcoins.
Naturally, people are concerned about security.  I found advice such as:
never store your bitcoins on a computer that is online
never write down keys, they could be read or stolen by others
never put keys on anything you could lose, such as usb drives etc.
All this makes sense and would appear to be sound.
However, it all leaves me wondering what happens to my bitcoins when I eventually pop my clogs.
Obviously it isn't safe to write down keys in your will.
If I gave a key to our daughter, she would either lose it, forget it, or abuse it.
So how would you leave your bitcoins to someone in your will?  There doesn't seem to be any way of doing this.
It follows from all this that when you die, your bitcoins die with you.
I have read that when bitcoins are lost, there is no way of retrieving them.  It's not as if someone could find them buried in a field in 50 years time.
Given that bitcoins will inevitably be lost for various reasons, it follows that the total number of bitcoins will decline steadily.  Given enough time, maybe they will all be lost................?
What do others think?

[DannyHamilton]

As a newbie I spent some time online trying to learn what I needed to know about bitcoins.
Naturally, people are concerned about security.  I found advice such as:
never store your bitcoins on a computer that is online
never write down keys, they could be read or stolen by others
never put keys on anything you could lose, such as usb drives etc.
All this makes sense and would appear to be sound.
However, it all leaves me wondering what happens to my bitcoins when I eventually pop my clogs.
Obviously it isn't safe to write down keys in your will.
If I gave a key to our daughter, she would either lose it, forget it, or abuse it.
So how would you leave your bitcoins to someone in your will?  There doesn't seem to be any way of doing this.

It is possible to encrypt the private keys in such a way that multiple passwords are necessary to recover them.  Then the encrypted password could be written down (perhaps in the will?). You could give each of several people that you trust one of the passwords.  It would require collusion/cooperation among several of them to access the private key.  You could choose how many passwords exist, and what percentage of them are necessary to decrypt the private key. (Example: 8 passwords, with any 4 passwords required for decryption)

I have read that when bitcoins are lost, there is no way of retrieving them.  It's not as if someone could find them buried in a field in 50 years time.
Given that bitcoins will inevitably be lost for various reasons, it follows that the total number of bitcoins will decline steadily.  Given enough time, maybe they will all be lost................?
What do others think?

No.  As more bitcoins move out of circulation, the remaining bitcoins become more valuable.  As bitcoins become more valuable, the quantity of bitcoins owned by any single person shrinks.  Therefore, as the quantity of bitcoins in circulation shrinks, the quantity that any individual can lose shrinks as well.

[Martijnvdc]

As more bitcoins are lost, the scarcity increases and thus the value of each bitcoin. (deflation)
Imagine if half of the total amount of bitcoins are lost every 10 years. It would simply take forever until all bitcoins are out of circulation.
I suppose you'd need a kind of "online wallet", a third person (bank) to take care of your bitcoins. Although that kinda goes against the whole idea of bitcoin...

[ch3weh]

Good topic this. I've recently been thinking about that myself. I think I'll be printing out a paper armoury backup and keeping it in a safe for my kids in the future!!

[DualSignal]

If you want your family to have access to your funds after you die you could store your private keys in a safety deposit box. Your family could gain access to your safety deposit box after you die by providing a death certificate.

[isho]

It is a good question. And I'm not sure what the best solution is, but there is a concept of M of N keys. Where you can encrypt a wallet with multiple keys such that you only need M out of a total of N keys to decrypt the wallet. So say M=2 and N=3 you would need only 2 of three keys to decrypt the wallet then you could distribute the keys to people you trust not to lose them (or put them in different safe deposit boxes) and then your will could detail how to retrieve the keys. That way getting access to enough keys to decrypt the wallet is unlikely to happen by accident but you are also protected if one of them gets lost.

Looks like DannyHamilton already posted a better (but similar reply) but I will post anyways since I need to verify my newbie account. 

[exstasie]

Good topic this. I've recently been thinking about that myself. I think I'll be printing out a paper armoury backup and keeping it in a safe for my kids in the future!!

This definitely will become more and more relevant these days.
Even outside of BTC, this is something that people are doing in the age of the internet and social media.  Many wills now suggest that you should put access to somewhere where they can your login and password for all of your social media sites, BTC wallets, etc. so that someone can manage your 'online identity'.

[spurtcoa2]

I never die.LOL!

[Slinker]

no I have a trusted back up someone in my family.

[zuerdemon]

Easiest is do not encrypt paper wallet and put it in safe box with other precious metals.

[Haiyan]

My wallet is mentioned in my will.  If I didn't have a will, I would simply tell whoever, that they would be left for them.  I have a safe deposit box at the bank and my encryption keys, gold, cash, vital documents etc., are all kept there.

[wachtwoord]

Yes, that is very likely.

[ivroer]

It is possible to encrypt the private keys in such a way that multiple passwords are necessary to recover them.  Then the encrypted password could be written down (perhaps in the will?). You could give each of several people that you trust one of the passwords.  It would require collusion/cooperation among several of them to access the private key.  You could choose how many passwords exist, and what percentage of them are necessary to decrypt the private key. (Example: 8 passwords, with any 4 passwords required for decryption)

Danny's on target here, I've seen a few other threads pop up on this subject.

So no, they only die with you if you want them to die with you. Just like other secrets 

You can be elaborate as you like with how you create the "dead man switch" to release your bitcoin when you die.

1. "Split" a private key or wallet password
e.g. Take a private key, write down the first 26 characters and give to your significant other, next of kin, etc.
Give the other 26 characters to your lawyer to be included in your will, with details on what exactly "it" is.
Once the will is read (after you die) the key is re-joined.
 
2. As DannyHamilton & isho suggested, either multi-signature or some other encryption that involves multiple keys/passwords. There's lot of talk about multi-signature addresses on this forum, have a search!

3. Some people have talked about time locked transactions, this is a bit complicated, personally I haven't tried doing anything like this myself. The transaction is to someone that you want to inherit some bitcoin from you, but it's crafted in such a way it can't be valid until a time in the future. When that time approaches, and you're still live 'n kicking, you move the funds to another address, and setup another time locked transaction, rinse and repeat until one day you expire, and so does the time lock...

Basically the way I see it, with time locks, it's probably a bad idea, imagine all the wasted memory on people's Bitcoin nodes if they were filled with millions of time locked inheritance transactions. Remember that these transactions won't be mined into blocks because they aren't valid "yet". You could always side-load the transaction to the recipient in a way they can store the signed transaction, and then broadcast it after your death.

But options 1 & 2, definitely sound a lot easier!

[massimies]

Bitcoin can't die. (Spam spam spam)