Timelock Recovery Storage Concept Discussion

Had a chat with achow101 at BTC++ Taiwan and thought I’d share this idea about Timelock-Recovery storage. Is it BIP-worthy? So, the motivation is simple: most people freak out about storing recovery seeds. Using pre-signed transactions to move funds to a backup wallet is a safer bet since they can't be changed easily. But hey, if you have a transaction set to open up in the future, you have to keep renewing it, which can be a headache, especially if you’ve split your keys. And with covenants and vaults still being debated, this seems like a solid solution.

This is similar to what I was thinking for my wallets but haven’t really implemented yet. Using pre-signed transactions that won’t leak even if someone sees them is a smart way to manage recovery without too much risk. Share them with trusted folks but always keep a careful eye on your original keys.

I’m really into this idea! It addresses the issue of families struggling to access wallets when something happens to the owner. A friend of mine had an accident and his family is still locked out of his wallet. With this, loved ones could access the wallet if things go south. Your work could save a lot of heartache!

Just so you know, my plan for a similar system is a bit different on the technical side. I was thinking of using a taproot address with two spending paths: one for my original key and another time-locked key for recovery. Something like this: tr(K1,and_v(v:pk(K2),older(one year))). It’s a bit complex but allows control over transactions.

Liana Wallet can actually handle the taproot script you mentioned. Their recovery feature is pretty handy for businesses and people who move funds a lot. Like, you can set up a strict 4/5 multisig for urgent access and a looser 2/5 multisig for later access. Plus, they send out reminders to refresh UTXOs that sit idle.

Thanks for the heads-up about Liana Wallet! I have my offline wallet setup, not a hardware one, so it’s different from standard wallets. Still, I believe a standardized BIP format is needed for this kind of recovery plan. It could really help reduce mistakes and streamline the process for heirs when they need to recover coins.

True, but Liana binds recovery options tightly to their system using a hierarchy of keys. The way you laid out your renewal idea could work with any wallet, which is pretty cool. I like that flexibility.

Initial draft of the concept is here: https://github.com/oren-z0/bips/blob/new-bip-timelock-recovery-storage-format/bip-%3F.mediawiki