There's some more subtlety to this "what if you're too poor to initiate a recovery" idea. Suppose I know a person with $10k of crypto lost their key which requires a 50% escrow for recovery, but they haven't yet initiated a recovery. What stops me (a well funded adversary) from sending over another $490k of my own funds so that the recovery escrow amount is now $250k, well outside what the original owner can put down?
Other than that, I generally think it's a really bad idea to have a decentralised currency require constant checking in in order to keep your funds. I could imagine situations where users are being monitored by an adversary, and having to quickly intervene with a recovery action would compromise their privacy or anonymity. For me it to be even remotely sensible, the escrow time should probably be several years.
Also, it's much easier to make someone loose access to their keys than it is to make them tell you their keys. What if I just steal their laptop that I know contains keys? That's much lower risk thing than beating someone up for private keys. It's much easier to "accidentally" make someone lose their keys while making it look like it wasn't about crypto at all anyway. What if the person holding the crypto doesn't want to go to the authorities or the authorities don't feel that protecting crypto is important. This is a much, much lower bar than kidnapping.
Other than that, I generally think it's a really bad idea to have a decentralised currency require constant checking in in order to keep your funds. I could imagine situations where users are being monitored by an adversary, and having to quickly intervene with a recovery action would compromise their privacy or anonymity. For me it to be even remotely sensible, the escrow time should probably be several years.
Also, it's much easier to make someone loose access to their keys than it is to make them tell you their keys. What if I just steal their laptop that I know contains keys? That's much lower risk thing than beating someone up for private keys. It's much easier to "accidentally" make someone lose their keys while making it look like it wasn't about crypto at all anyway. What if the person holding the crypto doesn't want to go to the authorities or the authorities don't feel that protecting crypto is important. This is a much, much lower bar than kidnapping.