Bitcoin after death...some thoughts to consider

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texasdiver
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Bitcoin after death...some thoughts to consider

Post by texasdiver » Wed Oct 17, 2018 1:05 pm

https://news.bitcoin.com/bitcoin-after- ... s-fortune/
There have already been several examples around the world of bitcoin investors who have died without leaving their keys for their relatives. In such cases, families must deal with a kind of “double funeral,” as they mourn the loss of their loved ones while coming to terms with the loss of an irretrievable fortune that might have been theirs.

This underscores how bitcoin’s main attraction — its safe remove from regulators and impenetrable privacy from regulation — can also become its fatal weakness. Users may enjoy immunity from high bank fees and taxes, but they miss out on the good side of the old system, such as help with the administration of their estates.

According to Chainalysis, about 25 percent of all bitcoins now in circulation (valued at roughly $23.5 billion) have already been lost forever. Death likely accounts for a good portion of these losses. But the recent example of [Matthew] Mellon, in particular, may encourage investors to start thinking beyond their own lives.

Mellon died in April at the age of 54. He passed away with up to $500 million in ripple stashed away in cold storage under fake names in banks across the U.S. But the secretive millionaire took his fortune with him, because he failed to name heirs to his wealth and did not provide information on how to access his crypto wallets.

Jack FFR1846
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Re: Bitcoin after death...some thoughts to consider

Post by Jack FFR1846 » Wed Oct 17, 2018 1:57 pm

My son has beat the crowd to this. In the very early days of bitcoin, he and a friend set up a mining operation and did indeed get some bitcoin into their wallet. They subsequently forgot their password or whatever it is they need. My son has a stack of disk drives because he knows it's in one of them, but doesn't know which one. With the rise of value of bitcoin, there's now about $2k worth sitting in that pile of drives.
Bogle: Smart Beta is stupid

randomguy
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Re: Bitcoin after death...some thoughts to consider

Post by randomguy » Wed Oct 17, 2018 3:06 pm

So if I leave my heirs a 500m dollar bit coin wallet but don't give them the key, how is that treated for estate tax purposes? What if they wait 20 years until computer power increases enough to break the encryption?:)

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car733
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Re: Bitcoin after death...some thoughts to consider

Post by car733 » Thu Oct 18, 2018 1:39 pm

randomguy wrote:
Wed Oct 17, 2018 3:06 pm
What if they wait 20 years until computer power increases enough to break the encryption?:)
20 years? that's very optimistic.

Unhandled
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Re: Bitcoin after death...some thoughts to consider

Post by Unhandled » Thu Oct 18, 2018 2:40 pm

If the encryption is able to be broken then the value of ALL bitcoins drops to zero because now anyone can break the encryption on anyone's wallet, not to mention it probably has all kinds of implications on the trustworthiness of the blockchain.

moneyman11
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Re: Bitcoin after death...some thoughts to consider

Post by moneyman11 » Thu Oct 18, 2018 2:44 pm

If the encryption that bitcoin is based on is brute force cracked by this mythical soon-to-come computing power, the cracking of bitcoin will be dwarfed in significance to the cracking of encryption protecting US Dollar and Euro based financial systems.

Valuethinker
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Re: Bitcoin after death...some thoughts to consider

Post by Valuethinker » Thu Oct 18, 2018 4:09 pm

moneyman11 wrote:
Thu Oct 18, 2018 2:44 pm
If the encryption that bitcoin is based on is brute force cracked by this mythical soon-to-come computing power, the cracking of bitcoin will be dwarfed in significance to the cracking of encryption protecting US Dollar and Euro based financial systems.
It's not mythical, it's called Quantum Computing.

And yes, it threatens a lot more than bitcoin. If it finds large scale practical application then that technology will upend a lot of arrangements.

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BolderBoy
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Re: Bitcoin after death...some thoughts to consider

Post by BolderBoy » Thu Oct 18, 2018 4:21 pm

Valuethinker wrote:
Thu Oct 18, 2018 4:09 pm
moneyman11 wrote:
Thu Oct 18, 2018 2:44 pm
If the encryption that bitcoin is based on is brute force cracked by this mythical soon-to-come computing power, the cracking of bitcoin will be dwarfed in significance to the cracking of encryption protecting US Dollar and Euro based financial systems.
It's not mythical, it's called Quantum Computing.
I've been reading a lot of technical stuff about QC and the wonks are saying that the public press is being waaaaaay overly optimistic that QC will destroy the crypto world as we know it.

Add to that the fact that many crypto experts are also QC experts and are writing crypto code that QCs can't break either.

There is little to fear from QCs and much to appreciate.
"Never underestimate one's capacity to overestimate one's abilities" - The Dunning-Kruger Effect

moneyman11
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Re: Bitcoin after death...some thoughts to consider

Post by moneyman11 » Thu Oct 18, 2018 5:27 pm

Valuethinker wrote:
Thu Oct 18, 2018 4:09 pm
It's not mythical, it's called Quantum Computing.
I know what Quantum computing is. That's not the myth I was referring to ....

If it finds large scale practical application ....

That is.

Mordoch
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Re: Bitcoin after death...some thoughts to consider

Post by Mordoch » Thu Oct 18, 2018 6:04 pm

moneyman11 wrote:
Thu Oct 18, 2018 2:44 pm
If the encryption that bitcoin is based on is brute force cracked by this mythical soon-to-come computing power, the cracking of bitcoin will be dwarfed in significance to the cracking of encryption protecting US Dollar and Euro based financial systems.
I would point out that all you really need is truly severe enough flaw to suddenly show up with SHA256 to potentially compromise bitcoin specifically in the future. Other financial products (or even other cryto-currencies) might be fine, with them mostly having to switch to something other than SHA256 for key implementations in the future, but the risk is your bitcoins could potentially become valueless or be effectively stolen.

Now you can argue that the risk of this happening is not that large, but it is an inherent issue with basically all crytocurrencies while banks etc can switch to different encryption schemes quickly in a true emergency and even take steps to briefly block transactions if absolutely necessary to prevent theft in the meantime.

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MP123
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Re: Bitcoin after death...some thoughts to consider

Post by MP123 » Thu Oct 18, 2018 10:01 pm

BolderBoy wrote:
Thu Oct 18, 2018 4:21 pm
Valuethinker wrote:
Thu Oct 18, 2018 4:09 pm
moneyman11 wrote:
Thu Oct 18, 2018 2:44 pm
If the encryption that bitcoin is based on is brute force cracked by this mythical soon-to-come computing power, the cracking of bitcoin will be dwarfed in significance to the cracking of encryption protecting US Dollar and Euro based financial systems.
It's not mythical, it's called Quantum Computing.
I've been reading a lot of technical stuff about QC and the wonks are saying that the public press is being waaaaaay overly optimistic that QC will destroy the crypto world as we know it.

Add to that the fact that many crypto experts are also QC experts and are writing crypto code that QCs can't break either.

There is little to fear from QCs and much to appreciate.
Agreed there's lots of good things in QC (hopefully) to come.

But when someone figures out an efficient way to prime factor large numbers we'll all be the last to know...

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