Bitcoin Dementia Progression

Procedural Knowledge Loss During Dementia

This memo is published by CustodyStress, an independent Bitcoin custody stress test that produces reference documents for individuals, families, and professionals.

Memory-Dependent Access Failure

Bitcoin dementia progression creates custody access problems distinct from sudden incapacity. Cognitive decline happens gradually over months or years. Bitcoin custody that depends on memory, complex procedures, or contextual understanding degrades alongside cognitive function. Access capability disappears before legal incompetence allows others to intervene.

The holder remains legally competent during early decline stages. They retain authority over their assets and can refuse assistance. Meanwhile, memory-dependent passwords are forgotten, multi-step recovery procedures become too complex, and documentation that once made sense becomes incomprehensible. The timing gap between custody failure and legal intervention creates a window where bitcoin becomes inaccessible despite the holder being alive and legally empowered.

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Memory-Dependent Access Failure

Passwords stored only in memory disappear during early dementia. The holder could reliably recall a complex passphrase for years. Mild cognitive impairment begins. The passphrase remains accessible most of the time but occasionally cannot be retrieved. The holder notices the problem but still has good days and bad days.

Partial memory creates dangerous uncertainty. The holder tries several password variations they think might be correct. Some seem familiar. None work. They cannot distinguish between passwords they used for different accounts and passwords they considered but never actually used. Multiple failed attempts may lock accounts permanently.

Seed phrases written in code or personal cipher systems become indecipherable to the person who created them. The holder used a substitution method they knew well. The method made sense when cognitive function was intact. Now they see the coded text but cannot remember the decoding system. The documentation exists but has become meaningless to its creator.

Multi-word passphrases fail during bitcoin dementia progression when word order cannot be recalled. The holder knows the five words but not their sequence. Five words have 120 possible orderings. The holder tries combinations but cannot remember which they tested. Fatigue and frustration compound the problem. The correct sequence exists in the holder's documentation but cannot be reassembled from memory.

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Procedural Knowledge Degradation

Complex custody procedures require executing steps in correct order. The holder set up a process involving hardware wallet, computer, and specific software. The process worked when practiced regularly. Months pass without use. Dementia begins. The holder wants to access their bitcoin but cannot remember the steps.

Written instructions exist but no longer make sense. The documentation assumes background knowledge the holder now lacks. Terms like "derivation path" or "recovery mode" were understood when written. Now they are meaningless technical jargon. The holder reads the instructions repeatedly without comprehension.

Physical actions become dissociated from their purpose. The holder knows they need to press buttons on the hardware wallet in a specific order. The order is forgotten. Trying random sequences risks locking the device. Fear of permanent lockout prevents experimentation. The holder has the device and the authority to use it but cannot remember how.

Conditional logic in procedures exceeds declining cognitive capacity. The instructions say "if X then Y, otherwise Z." The holder cannot maintain multiple possibilities in working memory long enough to evaluate the condition and choose the correct path. The procedure branches in ways the holder can no longer navigate mentally.

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Documentation Interpretation Collapse

Earlier versions of the holder created documentation for later use. The current holder is cognitively different from the person who wrote the notes. The writing assumes shared context between past and future self. That context has been lost to dementia.

Cryptic references made sense when written. "The blue folder in the second office" described a specific location unambiguously. The holder now owns three offices and multiple blue folders. The original context is gone. The documentation that was perfectly clear to its author is now a puzzle to the same person with reduced cognitive function.

Temporal references lose meaning. The notes say "after the move" or "before selling the business." These events anchored instructions in time when written. The holder no longer remembers when moves or sales occurred. The temporal markers that organized the documentation have become meaningless.

Handwritten notes become illegible to their author. The holder's handwriting has changed over years. Looking at old notes is like reading someone else's writing. Letter forms that were distinctive personal style now seem strange and hard to read. The notes contain the information but cannot be decoded by the person who wrote them.

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The Competency-Capability Gap

Legal competency is a binary determination. The holder is either competent or not. Cognitive capacity is gradual and variable. Bitcoin dementia progression creates a gap where the holder remains legally competent but functionally incapable of custody access.

Competency assessments test general cognitive function and decision-making ability. A holder might pass these tests while being unable to execute specific technical procedures. They understand the concept of asset management and can make investment decisions but cannot remember the twelve-character password needed to access their bitcoin wallet.

The holder retains authority over their assets during this gap. Family members recognize the problem and want to help. The holder refuses assistance, believing they can handle their own affairs. This belief is not irrational given their retained general competence. They do not recognize that specific technical demands exceed their declining capability.

Powers of attorney and guardianship require incapacity findings. The holder functions well enough in daily life that incapacity cannot be established. They grocery shop, pay bills, and maintain their home. Legal intervention requires proof of incapacity that does not yet exist despite custody access having already failed.

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Progressive Lockout Acceleration

Failed access attempts compound over time. The holder forgets a password and tries variations. Each failed attempt is forgotten. They try the same wrong passwords repeatedly. After ten failures, the account locks permanently. The holder caused the permanent lockout through repeated attempts they did not remember making.

Security measures designed to prevent attacks also prevent recovery during bitcoin dementia progression. Two-factor authentication requires receiving and entering a code. The holder gets the code but forgets it before entering. They request another code. The first code expires. They enter the expired code. The system locks after multiple incorrect attempts. The security feature intended to protect assets prevents access by the authorized user.

Device-based authentication fails when the holder cannot remember which device to use. Authentication requires a specific phone. The holder owns three phones. They try authenticating with the wrong phones, exhausting allowed attempts. The correct phone sits unused because the holder cannot identify it among their devices.

Backup recovery codes are stored safely but the holder forgets the storage location. The codes could restore access but finding them requires remembering where they were hidden years ago. The holder searches locations that seem logical now, missing the location that made sense when the codes were originally stored.

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Family Awareness and Intervention Timing

Family members notice cognitive changes gradually. Early signs might be dismissed as normal aging, stress, or distraction. By the time dementia is recognized as the cause, substantial decline has already occurred. Bitcoin custody may have already failed during the unrecognized decline period.

The holder conceals difficulties from family. They do not want to appear incompetent or lose independence. Questions about bitcoin access are deflected. The holder claims everything is fine while privately struggling with forgotten passwords and incomprehensible documentation. By the time the family learns the truth, the access window has closed.

Family intervention faces resistance even when decline is obvious. The holder becomes angry at suggestions they need help. They view assistance attempts as threats to autonomy. The family knows bitcoin access is failing but cannot legally intervene while the holder remains competent and refuses cooperation.

The intervention that could have saved access is postponed until crisis occurs. The crisis reveals the bitcoin cannot be accessed. At that point, custody has already failed. The intervention timing that would have preserved access occurred during the gap when the holder seemed functional enough that intervention appeared premature.

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Documentation That Assumes Stability

Custody documentation is created when cognitive function is strong. The documentation assumes future cognitive state will resemble current state. This assumption fails during bitcoin dementia progression. Instructions that were simple become impossible as the gap between creation assumptions and current reality widens.

The documentation describes a straightforward process. "Enter your password, verify the address, approve the transaction." These steps assume the holder can remember passwords, understand what address verification means, and recognize when approval is appropriate. Dementia eliminates these capabilities while the documentation unchanged keeps describing them as simple actions.

Contingency instructions fail to imagine relevant scenarios. The documentation includes "if you forget your password, use the recovery phrase." This contingency assumes the holder recognizes they forgot the password and remembers that a recovery phrase exists. Dementia can eliminate both the recognition that the password is forgotten and the memory that recovery methods exist.

Self-reference in documentation becomes circular as cognitive decline proceeds. "Remember the procedure you practiced" assumes the holder recalls practicing something. They do not remember any practice. The instruction is meaningless because it references experiences the holder has forgotten occurred.

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Exchange Account Degradation

Exchange accounts seem simpler than self-custody but fail similarly during dementia progression. The holder set up an account years ago. They used an email address they no longer check regularly. The password was memorable then but is forgotten now.

Account recovery requires answering security questions. The holder chose answers when cognitive function was intact. Now they cannot remember what answers they provided. They try guessing. The answers they would choose today differ from answers they chose years ago. Recovery fails because the holder has literally become a different person from the one who configured security.

Phone number changes block two-factor authentication. The holder no longer has the phone number linked to their exchange account. Account recovery requires contact through that old number. The number was disconnected years ago. The exchange security process has no path forward when the linked communication method no longer exists.

Email-based recovery fails when the holder cannot access the email account used during exchange signup. That email password is forgotten. The email provider's recovery process requires information the holder cannot provide due to memory loss. The chain of dependencies creates deadlock where each system's recovery depends on accessing another system the holder can no longer reach.

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Multi-Signature Coordination Collapse

Multi-signature arrangements require coordinating with co-signers. The holder's decline affects their ability to initiate and complete this coordination. They recognize they need to move bitcoin but cannot remember who the co-signers are or how to contact them.

The co-signers are not aware of the holder's cognitive decline. They receive unusual requests from the holder that seem confused or inconsistent. The co-signers become suspicious and delay signing transactions pending clarification. The holder cannot provide coherent explanation due to their deteriorating state. The protective skepticism of co-signers prevents transactions the holder legitimately needs to execute.

Communication with co-signers requires maintaining context across messages. The holder starts a conversation with a co-signer, forgets the conversation occurred, and starts another contradictory conversation. The co-signer receives conflicting instructions and refuses to proceed. The holder's inability to maintain consistent communication creates deadlock in the multi-signature process.

Time delays between signature requests and completion exceed the holder's working memory retention. The co-signer takes two days to review and approve. The holder forgets they requested the signature. The co-signer finally approves and waits for the holder to provide their signature to complete the transaction. The holder has no memory of the pending transaction and does not understand the co-signer's message about being ready to proceed.

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Professional Helper Limitations

Technical professionals can assist with bitcoin custody but cannot overcome memory-dependent authentication that only the holder knows. A family member hires a bitcoin expert to help access the holder's funds. The expert can navigate wallet software but cannot provide the password only the holder knows.

The holder gives the helper wrong information due to memory problems. They confidently provide a password they believe is correct. It is actually the password for a different account. The helper tries the provided password, fails to gain access, and reports the bitcoin cannot be recovered. Meanwhile, the holder has forgotten they have multiple accounts with different passwords.

Helper presence agitates some holders with dementia. The unfamiliar person creates stress and confusion. The holder becomes less functional in the helper's presence than when alone. Testing access with the helper present yields worse results than the holder might achieve alone on a good day when calm and unpressured.

The helper cannot distinguish between custody problems and cognitive problems. Access fails. The failure could be due to wrong credentials, technical issues, or the holder's confusion about which account contains the bitcoin. The helper has no way to determine which problem they face without the holder's reliable input, which dementia makes unavailable.

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The Estate Planning Disconnect

Estate plans address asset transfer after death. They do not address access loss during life. The holder has a perfect estate plan with all legal documents in place. Bitcoin dementia progression makes these documents irrelevant because the bitcoin becomes inaccessible before death triggers the estate plan.

Powers of attorney grant authority during incapacity. They do not grant knowledge of passwords or access to memory-dependent credentials. The attorney-in-fact has legal power but no practical ability to access bitcoin when the holder cannot provide the information needed to execute that power.

The estate plan assumes assets remain accessible until death. Bitcoin accessed through memory-dependent procedures violates this assumption. The asset functionally disappears during the holder's lifetime while all legal instruments remain properly executed and valid. The legal framework and the custody reality have diverged completely.

Beneficiaries inherit legal ownership of bitcoin that cannot be accessed. The estate transfers successfully according to legal documents. The inheritors receive valid ownership but cannot convert that ownership into actual bitcoin control because custody information was lost during the holder's cognitive decline. The inheritance is technically complete but practically worthless.

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Assessment

Bitcoin dementia progression eliminates custody access gradually through memory failure, procedural knowledge degradation, and documentation interpretation collapse. The holder forgets passwords, cannot execute complex procedures, and finds their own past documentation incomprehensible. This custody failure occurs while legal competency remains, creating a gap where intervention is impossible despite obvious need.

The timing gap between cognitive decline and legal incompetence leaves bitcoin inaccessible. Family intervention faces resistance from the holder who retains authority. Progressive lockout mechanisms accelerate as failed access attempts accumulate. Exchange accounts and multi-signature arrangements fail through coordination collapse and authentication deadlock. Professional helpers cannot overcome memory-dependent credentials they do not possess.

Estate planning documents remain valid and properly executed while underlying custody access disappears during life. Powers of attorney grant authority without providing the knowledge needed to exercise it. The disconnect between legal frameworks assuming asset accessibility and cognitive reality where access has been lost creates inheritance of ownership without control. Bitcoin dementia progression reveals custody's dependence on cognitive capabilities that the legal system does not track or address until after custody failure has already occurred.

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System Context

Examining Bitcoin Custody Under Stress

Hidden Bitcoin Custody Dependencies

Bitcoin Joint Custody Between Unmarried Partners

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