Bitcoin: A New Kind of Digital Inheritance - Boyum Law
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Bitcoin: A New Kind of Digital Inheritance

Real estate, family heirlooms, and savings accounts are some of the first things that come to mind when picturing an inheritance. Thanks to advances in technology, new types of inheritances are springing up in the form of digital assets. Digital assets are online accounts, such as Facebook profiles, email addresses, and iTunes accounts. Nebraska has a state law that makes it legal to transfer digital assets to a personal representative upon an individual’s death. This law is especially important since virtual currency, such as Bitcoin, is becoming more popular. Read on to discover what Bitcoin is, where to buy it, and how to pass it on to your heirs.

What is Bitcoin?

Bitcoin is a digital payment network where Bitcoin currency is stored and transferred. The Bitcoin network is run by a system of computers around the world and is not owned by a single company or individual. Since there’s no specific company keeping track of Bitcoin transactions, the virtual currency has been linked to illegal activity in the past. However, many Bitcoin transactions occur because of the currency’s value. The computers that run the Bitcoin system track Bitcoin transactions. Tracking Bitcoin transactions is an important part of determining the value of Bitcoin currency.

How does Bitcoin currency work?

Bitcoin currency is called a Bitcoin. A Bitcoin is a type of digital token that you can send to someone electronically. However, Bitcoins do not come in set amounts like physical currency does. A Bitcoin can be divided into eight decimal places. So, the smallest amount you can send someone is 0.00000001 Bitcoins, according to the New York Times.  Additionally, the value of a Bitcoin changes similarly to the way the value of stocks change based on bidding. The value of one Bitcoin as of October 9, 2017 is $4,802.95 in U.S. currency.

How do you buy Bitcoins?

Several companies are set up to sell you Bitcoins in exchange for regular currency. Many people in the U.S. choose to use a company called Coinbase. Coinbase links to your bank account and has a multi-step verification process for safety. Once purchased, Bitcoins are stored in a virtual wallet. Virtual wallets are set up to send and receive Bitcoins with a public key, which is a random string of numbers and letters. However, you need a private key to access the Bitcoins in your wallet. Additionally, most virtual wallets are also password protected to ensure the safety of their contents.

How do your heirs inherit your Bitcoins?

The value of Bitcoins has been steadily rising. It makes sense to pass on your Bitcoins to your heirs the same way you would pass on your stocks. In order to pass your Bitcoins on as inheritance, your heirs need the password and private and public keys to your virtual wallet. The private key to your Bitcoins is especially important because without it, your heirs will only be able to see the value of your wallet but will be unable to access its contents. You can pass on your private key by writing it down, storing it in a flash drive, or entrusting a company to give the information to your family after your death.