The end of the world is nigh! With traditional currencies there is a saying “you cannot take it with you” but believe it or not with Bitcoin you can.
It occurred to me that when the world ends in the upcoming apocalypse tomorrow on the 21st 2012 you can use a BrainWallet to take your fortune to [fill in your appropriate afterlife location] with you. Once there you can connect up to the local blockchain and you are ready to go, complete with your earthly wealth.
On a more serious note, often when someone new comes to me to get setup in the mining game they are not truly dedicated geeks like myself and are only getting into the “bitcoin game” as a speculative measure to diversify their portfolio (i.e. they are in it for the money). They don’t want to run a Bitcoin Daemon, keep their own copy of the block chain or run a deterministic wallet, they just want a safe and secure way of storing their bitcoins without the need to write down their private key. I usually get them to create a BrainWallet to deposit their funds into.
A BrainWallet is a surprisingly simple bit of technology, the idea is that you come up with a pass phrase and use it to create a bitcoin private key by performing a quick SHA256 operation. The bitcoin public key (or bitcoin address) is then decoded from the private key and you are good to go, you just have to transfer your funds to the bitcoin address you generated and you are in effect storing your bitcoins in your brain.
For example, if they created a new brain wallet using the pass phrase “MineForeman.com is the best bitcoin blog in the universe” the public key, or bitcoin address would be;-
And the Private key would be;-
Now they could transfer their funds into the generated public bitcoin address above and at any time from next monday to the end of time (before next monday apparently) they can use the private key that was generated to retrieve those funds. All they have to do is remember their pass phrase and they can regenerate the private key.
If you are like me and cannot do SHA265 hashing functions in your head their are plenty of sites on the internet that can do those calculations for you on the internet such as bitaddress.org and brainwallet.org, even Jon Matonis over at Forbes Magazine wrote an article on BrainWallets earlier this year.
So there you are, now you CAN take it with you.
A word of Warning: Chose your pass phrase carefully, the one I chose above has very limited entropy meaning there are only a total of 19 different characters in the phrase (“abceFgilmMnorstuv.” and space) so when you create your pass phrase try to use a mix of capitals, punctuation and special characters (*&\^%\$#@!) to increase your entropy, and never use something that is written down somewhere else (e.g. in a book or a web page).
Another Warning: Whatever you do, make sure you are able to remember your pass phrase correctly with all of the punctuation, capitalisation and special characters, if your forget it, or even just cannot remember it exactly your bitcoins are lost.