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TL;DR
As a bad-case-scenario backup, you can create a signed transaction that's only valid several years in the future, and sends your funds to an unencrypted wallet under your control.
If you ever need it, all you have to do is wait until you can broadcast the transaction.
Long version
I'll start by quoting myself:
Note: I haven't used this yet for a real application, it's only meant as a proof of concept.
Example
Address: 1GiL5Chm7qM9aV7xXWiAVKp7VnKPps13x8 (Balance:
) (HODL storage)
Private key: KxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxHw
This is the address in super secret private storage that only I can access.
Locktime Recovery Sheet
The following information including images is printed on the Locktime Recovery Sheet, together with it's private key and QR-codes. Whoever gets access to this paper after the Locktime expired, gets access to the funds. So keep it safe!
** start locktime recovery sheet **
Address: 1Kx5kYqStfhPQntRv185pTuyafLoaYLrV7 (Balance:
) (Recovery)
Private key: L3YR5E2NrGVXViKNBUGeBjmHxEFgEHkg5QJ9XS67YZJ6f1EyZFny
Signed Recovery Transaction
This transaction is valid from Block 600,000 (slightly less than 50 days from now).
** end locktime recovery sheet **
(to create this example, I ignored all proper security measures and used Bitaddress.org and Coinb.in online. That's why I only used 0.0001BTC for this example. This is very bad practice to do for anything with value. Take precautions!)
Precautions
Create this on an offline system that won't go online again afterwards. Use for example Ubuntu or Knoppix from a LIVE DVD without ethernet/Wi-Fi, and use a dumb printer that doesn't store anything.
Don't use an online website to generate QR-codes.
It's probably wise to leave some instructions for whoever is going to use your Locktime Recovery Sheet in the future. He or she should understand the importance, so it's not just dismissed by someone who doesn't know anything about Bitcoin.
Verify the signed transaction (offline!) to ensure it does what you want it to do.
Different versions
Since you don't know how long it will be before anyone needs this, you can quite easily create a few different versions with different Locktimes. A couple of months before each one of them would become valid, you can simply burn the paper and the next one takes it's place.
Risks
You should only do this if you know what you're doing! It's meant for long-term HODL funds, and you should know the pre-signed transaction becomes invalid the moment you move any of the input funds. You should also know any newly added funds won't automatically be added to your Locktime Recovery Sheet. You have to keep track of this by yourself.
We can't predict transaction fees in the future, so you'll have to take a guess there. There's no need to make it very high, because the receiver can always use CPFP if needed. It shouldn't be under the minimum though.
Don't accidentally set a Locktime many centuries ahead!
You may miss out on possible Forkcoins that use proper replay protection.
Giveaway
Another use I could think of, is when you give away some amount of Bitcoin for some occasion. Let's say a family member gets a baby, and you want to give the kid $100 in Bitcoin, but you don't want to risk it never being used. You can fund a good looking paper wallet, and give the parents the instruction to give it to the kid when he/she turns 18.
You keep a Locktime Recovery Sheet with Locktime 25 years in the future, and if the kid doesn't use the funds (by then hopefully worth a small fortune), you'll take it back after 25 years.
If you don't trust the parents not to touch it, you can give them a Locktime Recovery Sheet with a Locktime 18 years in the future, and keep one with a Locktime 25 years in the future for yourself. That way (when properly generated), nobody can access the funds earlier.
No spam
Please
On-topic posts are welcome!
As a bad-case-scenario backup, you can create a signed transaction that's only valid several years in the future, and sends your funds to an unencrypted wallet under your control.
If you ever need it, all you have to do is wait until you can broadcast the transaction.
Long version
I'll start by quoting myself:
~why would you give your family access to your Bitcoins? If it's meant for the "hit by a bus scenario", there might be another option. I've been thinking about this for a while now, but haven't actually used it:
1. Print a normal paper wallet.
2. Sign a transaction to send funds from your cold storage to the normal paper wallet, but add a Locktime so it's only valid from a block far far in the future. Say 1 million block count or even more (but not so far none of your family members will still be alive). Or while you're at it: create a few versions (1 million blocks, 1.5 million, 2 million) and print them on different sheets of paper.
3. Print the transaction and store it with the paper wallet.
4. If you're still alive a couple of months before the first transaction becomes valid: burn it, the next one becomes your new fail safe.
If your family ever needs it, all they have to do is wait a few years, broadcast the transaction, and the paper wallet becomes valuable.
I brought this up in another topic, and received more support than I expected. Hence the dedicated thread 1. Print a normal paper wallet.
2. Sign a transaction to send funds from your cold storage to the normal paper wallet, but add a Locktime so it's only valid from a block far far in the future. Say 1 million block count or even more (but not so far none of your family members will still be alive). Or while you're at it: create a few versions (1 million blocks, 1.5 million, 2 million) and print them on different sheets of paper.
3. Print the transaction and store it with the paper wallet.
4. If you're still alive a couple of months before the first transaction becomes valid: burn it, the next one becomes your new fail safe.
If your family ever needs it, all they have to do is wait a few years, broadcast the transaction, and the paper wallet becomes valuable.
Note: I haven't used this yet for a real application, it's only meant as a proof of concept.
Example
Address: 1GiL5Chm7qM9aV7xXWiAVKp7VnKPps13x8 (Balance:
Private key: Kx
This is the address in super secret private storage that only I can access.
Locktime Recovery Sheet
The following information including images is printed on the Locktime Recovery Sheet, together with it's private key and QR-codes. Whoever gets access to this paper after the Locktime expired, gets access to the funds. So keep it safe!
** start locktime recovery sheet **
Address: 1Kx5kYqStfhPQntRv185pTuyafLoaYLrV7 (Balance:
Private key: L3YR5E2NrGVXViKNBUGeBjmHxEFgEHkg5QJ9XS67YZJ6f1EyZFny
Signed Recovery Transaction
Code:
010000000126063a71fecd0c76fa7d31a561cbe95bf2c7e5da01ae04fed6a6e9dfbc80953e010000006a47304402201a16d89264518baca8f4959b446372c6ce91e8d1fbc0b7b48618aeb76113df33022040eb804bf7cd6519d01709066658251cef1822ff49fd07707e058a07b27b42f9012103f78766b4346bcec0f2ae92d7e132e6b321c47627f14356a704b3ce57169dcb4e000000000116260000000000001976a914cfdd1b997472bd0b668e7472d9708305f116994d88acc0270900
This transaction is valid from Block 600,000 (slightly less than 50 days from now).
** end locktime recovery sheet **
(to create this example, I ignored all proper security measures and used Bitaddress.org and Coinb.in online. That's why I only used 0.0001BTC for this example. This is very bad practice to do for anything with value. Take precautions!)
Precautions
Create this on an offline system that won't go online again afterwards. Use for example Ubuntu or Knoppix from a LIVE DVD without ethernet/Wi-Fi, and use a dumb printer that doesn't store anything.
Don't use an online website to generate QR-codes.
It's probably wise to leave some instructions for whoever is going to use your Locktime Recovery Sheet in the future. He or she should understand the importance, so it's not just dismissed by someone who doesn't know anything about Bitcoin.
Verify the signed transaction (offline!) to ensure it does what you want it to do.
Different versions
Since you don't know how long it will be before anyone needs this, you can quite easily create a few different versions with different Locktimes. A couple of months before each one of them would become valid, you can simply burn the paper and the next one takes it's place.
Risks
You should only do this if you know what you're doing! It's meant for long-term HODL funds, and you should know the pre-signed transaction becomes invalid the moment you move any of the input funds. You should also know any newly added funds won't automatically be added to your Locktime Recovery Sheet. You have to keep track of this by yourself.
We can't predict transaction fees in the future, so you'll have to take a guess there. There's no need to make it very high, because the receiver can always use CPFP if needed. It shouldn't be under the minimum though.
Don't accidentally set a Locktime many centuries ahead!
You may miss out on possible Forkcoins that use proper replay protection.
Giveaway
Another use I could think of, is when you give away some amount of Bitcoin for some occasion. Let's say a family member gets a baby, and you want to give the kid $100 in Bitcoin, but you don't want to risk it never being used. You can fund a good looking paper wallet, and give the parents the instruction to give it to the kid when he/she turns 18.
You keep a Locktime Recovery Sheet with Locktime 25 years in the future, and if the kid doesn't use the funds (by then hopefully worth a small fortune), you'll take it back after 25 years.
If you don't trust the parents not to touch it, you can give them a Locktime Recovery Sheet with a Locktime 18 years in the future, and keep one with a Locktime 25 years in the future for yourself. That way (when properly generated), nobody can access the funds earlier.
No spam
Please
On-topic posts are welcome!