[bitcoindev] BIP idea: Timelock-Recovery storage format

'Oren' via Bitcoin Development Mailing List
2025-12-28T14:59:50Z

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Reposting here from BitcoinTalk
<https://bitcointalk.org/index.php?topic=5569543.0>:

After a short talk with Ava Chow during BTC++ Taiwan, I'm starting this
thread to discuss whether my idea is BIP-worthy.

Motivation for Timelock-Recovery plans:
Storing seeds for recovery & inheritance is scary.
Pre-signed transactions to a secondary-wallet/custodian, are safer to
handle and backup due to their immutability.
A single pre-signed transaction with a future nLocktime requires "renewal"
when the nLocktime deadline is getting close, which could be annoying (i.e.
if the seed is split over multiple geographic locations).
Covenants/Vaults are still being debated, and could scare less-technical
Bitcoiners.

Solution:
Pre-signing a pair of transactions:
• Alert/Initiate Transaction: A consolidation transaction that keeps most
funds on the original wallet (except for a minimal amount that goes to
anchor-addresses, for CPFP acceleration)
• Recovery Transaction: A transaction that moves the Bitcoin from the
consolidated UTXO to the secondary-wallet(s), with an nSequence
relative-locktime that gives the user enough time to move the funds
elsewhere (assuming they noticed that the Alert transaction was mined, and
still have the seed or signed an alternative transaction in advance).

Similar to a single pre-signed transaction with a future nLocktime,
Timelock-Recovery plans will not include new funds that are added to the
wallet, and will be revoked even if a tiny amount is spent. This mechanism
is intended for wallets that are going to remain untouched for a long time.

An example implementation can be found in the Timelock Recovery plugin that
I've implemented for Electrum <https://electrum.org> (merged since Electrum
v4.6.0b1). Details and demo videos can be found at:
https://timelockrecovery.com.
The plugin creates a UI for signing the two transactions, then saving them
either in a PDF file (with detailed manual instructions for
less-technological Bitcoiners how to broadcast them), or in a *JSON format*.

The BIP will be about the JSON format, which includes not only the raw
transactions themselves, but also user-information (i.e. name, description,
destination-labels, wallet-name, wallet-version), and data about the
transactions (i.e. txids, amounts, fees, input-utxos, anchor-addresses,
relative-locktime).
A standard JSON format will allow implementing a compatible feature on
other wallets, as well as apps/servers for monitoring & initiating
timelock-recovery plans - such as the one being developed by RITREK.com
<https://ritrek.com> (disclosure: I'm one of RITREK's founders).

Let me know what you think!

Oren

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