drgo on Nostr: Bitcoin time locks are fascinating. There are like 4 types of time locks and each of ...
Bitcoin time locks are fascinating. There are like 4 types of time locks and each of those 4 can have time be specified in 2 ways…
But what can you time lock in Bitcoin? Two things: 1) you can make a transaction that is invalid until a certain time condition is met and 2) you can set a spending condition on a utxo that doesn’t permit spending until time constraints are met.
1) is like post-dating a check…the issuer could drain the account before the check is valid and the recipient would get nothing in that case.
2) is like an inheritance from an old relative held in a trust that stipulates you can’t spend any of it until you turn 18 or 25 or whatever.
How best to use these for security purposes? Like for individual security and inheritance planning and stuff?
Well, having a very complicated password on your seed phrase might sound good while you’re alive, it might cost your family all your coins when you’re dead. There are two ways you could prevent this:
1) create an “just in case I’m dead” transaction sending all your coins to an address in the wallet corresponding to the seed phrase itself without the complicated password and time lock the transaction for a year or 5 and destroy the transaction should you live long enough for it to have become valid (or move underlying funds, more likely) and update the JICID transaction.
2) lock your coins in a multisig that states the coins may be spent by your key any time or by another key in the future.
But what can you time lock in Bitcoin? Two things: 1) you can make a transaction that is invalid until a certain time condition is met and 2) you can set a spending condition on a utxo that doesn’t permit spending until time constraints are met.
1) is like post-dating a check…the issuer could drain the account before the check is valid and the recipient would get nothing in that case.
2) is like an inheritance from an old relative held in a trust that stipulates you can’t spend any of it until you turn 18 or 25 or whatever.
How best to use these for security purposes? Like for individual security and inheritance planning and stuff?
Well, having a very complicated password on your seed phrase might sound good while you’re alive, it might cost your family all your coins when you’re dead. There are two ways you could prevent this:
1) create an “just in case I’m dead” transaction sending all your coins to an address in the wallet corresponding to the seed phrase itself without the complicated password and time lock the transaction for a year or 5 and destroy the transaction should you live long enough for it to have become valid (or move underlying funds, more likely) and update the JICID transaction.
2) lock your coins in a multisig that states the coins may be spent by your key any time or by another key in the future.