Gift the Gift of Low Time Preference

Here are some ideas for gifting bitcoin this holiday season

As we all know by now, the real value of bitcoin comes from holding for a long period and time horizon, at least five years. Gifting bitcoin can be valuable if your recipient has that ability, so here are some simple tricks to gift bitcoin and discourage selling.

Keep the key yourself

The easiest solution is to gift the bitcoin but keep the key. When the time comes, the recipient can request the key from you, which you can furnish if you want. Since you have the key, in a sense you're not gifting the bitcoin at all since you're not granting the ability to spend the bitcoin. But who cares? Most people will be happy to receive the bitcoin and hear about their new bitcoin address and about the bitcoin that is locked in there. The nice thing about this is you can impose whatever incentive scheme you like to get the key in the future. For example, for kids, it could be "win the middle school chess tournament,” or “become valedictorian,” or “generate your first $1 million in revenue in your startup.” You just need to be disciplined not to spend the bitcoin yourself.

Keep part of the key

To give more of a sense of ownership, you could give half of the key to your recipient and keep the other half yourself. For example, you could give them 12 of the 24 seed phrases. This way they feel like they have more ownership, even though they don't.

If you wanted to make this more of a challenge, you could give them 20 out of the 24 seed phrases and then see if they can crack the private key. When you give enough seed phrases, this is computationally feasible by brute force. They would just need to figure out how to do it. What better way to incentivize learning to code? Proof of work!

Lock the Bitcoin in a Multisig

You could give them bitcoin into a multisig address and give them one key while you keep the other. This is easier than using and splitting the seed phrase above. Giving them one key gives them a sense of ownership, and you could keep the remaining keys and use any of the incentive structures above. For example, this would work if mom and dad each had one key, and they each got to set their thresholds for when to reveal the other key to the kid.

Write a time-locked transaction