Bitcoin: What Happens When You Die? - Business Insider
A vertical stack of three evenly spaced horizontal lines. * Copyright 2019 Insider Inc. All rights reserved. Registration on or use of this site constitutes acceptance of our Attendant holds bitcoin sign during the opening of Hong Kong's first bitcoin retail store A young man died suddenly in Colorado this year, leaving his family the burden of sorting out his estate. Little did they know their loved one had been investing in Bitcoin, the digital currency that cost as little as $13 in 2013 and recently climbed as high as $5,000 . The grieving family stood to inherit a small fortunethat is, if they could only find and access the cryptocurrency. Bitcoins are a virtual form of money protected by unbreakable cryptography. This attribute makes it a secure way to store wealth but also creates the risk that when Bitcoin owners die, their digital fortune will be out of reach forever. That's a major problem for the relatives of tech-savvy individuals who have invested in a market currently worth about $70 billion. Bitcoins are stored in a virtual wallet. Each wallet uses a string of random characters called a "public key," visible to anyone, as an address for sending and receiving the cryptocurrency. A separate "private key" allows the owner access to the wallet's contents. If a Bitcoin owner dies without passing on the private key, his heirs may discover his wallet only to realize that they will never gain access to the wealth inside. To prevent this, the owner simply has to ensure that someone gets a copy of the private key by writing it down, storing it on a flash memory drive, or entrusting it with a commercial service that manages them. But some of these methods come with their own perils. Suzanne Walsh , a wills and estate attorney with Murtha Cullina, says executors and Continue reading >>
Considerations In Estate Planning For Bitcoin, Ethereum, And Other Crypto-currencies
Home Considerations in Estate Planning for Bitcoin, Ethereum, and other Crypto-Currencies Considerations in Estate Planning for Bitcoin, Ethereum, and other Crypto-Currencies Posted in Estate Administration , Estate Planning , Estate Tax While success in crypto-currency investing is far from assured, death, sadly, is. Accordingly, it is vital that investors in Bitcoin and other crypto-currencies are prepared for the unique estate planning factors that apply to digital assets. The following are five estate planning factors that should be addressed immediately by crypto-currency investors to ensure that their digital assets are effectively passed on to their heirs or beneficiaries. Custody of Private Keys and Other Information to Access Digital Assets Unlike bank accounts which can be accessed post-mortem, digital assets typically require a variety of private information to be accessed. This information (and an investors digital assets) may be lost forever if an investor fails to record it or share it with a trusted third party before they die. To avoid this, it is crucial that investors physically record the following private access information and provide for custody of this information in their will: Private Key: Most crypto-currencies use a public-private key system to ensure that transactions are valid. While the public key is made public every time the investor buys or sells crypto-currency, only the investor knows the private key. Private keys are essential to verify ownership and access digital assets, and should be recorded. Gaining access to a private key is similar to gaining ownership of a bank account, so it is vital that private keys are kept safe. Creating a physical copy of your private key and securing it in a bank safety deposit box insulates your priva Continue reading >>
5 Bitcoin Stocks That Have Gained 200% (or More) In 2017
5 Bitcoin Stocks That Have Gained 200% (or More) in 2017 One bitcoin stock is up better than 19,000% since the year began. This year definitely went to the bulls, with all three major U.S. stock indexes flying to dozens of new all-time highs. From cloud computing to marijuana stocks, most industries delivered healthy gains for investors. But when the calendar finally turns on 2017, we'll likely be kneeling in reverence to the amazing gains delivered by cryptocurrencies. From the beginning of year through Dec. 11, the aggregate market cap of all cryptocurrencies has grown from $17.7 billion to $458 billion, a gain of nearly 2,500%.By comparison, the stock market typically returns about 7% annually for investors, inclusive of dividend reinvestment and adjusted for inflation. The kingpin among all virtual currencies continues to be bitcoin, the world's most popular and first tradable cryptocurrency. As of Dec. 11, 63% of the aforementioned $458 billion global market cap for virtual currencies belonged to bitcoin. And although it's up by "only" 1,600% this year, which trails the aggregate incline in market cap noted above, I doubt that its investors are crying the blues. When it comes to bitcoin, a confluence of factors have led its seemingly unstoppable charge higher. First, there's the potential for blockchain technology. Blockchain is the digital and decentralized ledger that underlies most virtual currencies and logs transactions without the need for a third-party intermediary, like a bank. Blockchain offers the potential to process transactions considerably more quickly (especially cross-border transactions) and more cheaply since there's no third-party involvement. Bitcoin investors are also enamored with its potential as a payment platform. In addition to the handfu Continue reading >>
Bitcoin - Risky Bubble Or The Future?
These are external links and will open in a new window First, full disclosure - I am a beneficiary of the Bitcoin bubble. Back in April 2016, while working on a story about the cryptocurrency, I bought 0.17 Bitcoin for $87, which was then equivalent to about 60. Over the 18 months since, I confess I have opened my Bitcoin wallet on my smartphone with increasing frequency, staring with mounting disbelief at my balance which stands today at $1,713 - getting on for 1,300. All along, this has felt like the latest, maddest speculative bubble, a tulip fever for the hi-tech era. On its helter skelter ride towards $10,000, there have been plenty of occasions where Bitcoin has seemed in trouble - splits in the community over how it should be governed, robberies at exchanges, warnings from regulators. But every time that pundits have warned the bubble is about to burst, the currency has stuttered for a few days and then gone charging higher. Along the way, it has lost one of the core features of a currency in that it is no longer much used as a means of exchange. A couple of years ago, there were all kinds of stories about ways you could spend Bitcoin - a pub in Shoreditch accepted it, a newsagent in Swanage boasted that a customer had bought a Kitcat with it, I even ordered a pizza paid for with the currency. Now, nobody who owns Bitcoin wants to spend it - why would you when it will be worth more tomorrow? Neither is it quite as easy and cheap a way of moving money around the world as its backers once claimed, with fees for exchanging it into fiat currencies rising and law enforcement agencies on the lookout for evidence of money laundering. But the biggest shadow over Bitcoin's future is the growing evidence that it is hugely wasteful in terms of energy use. By one estimate, Continue reading >>
Bitcoin Should Be Part Of Estate Planning, Too
Bitcoin Should Be Part of Estate Planning, Too Cryptocurrency investors who are preoccupied with the ever-changing value of their virtual fortunesparticularly after bitcoins 28% drop in January may be forgetting to ensure that this wealth can be passed down to their children and grandchildren. The secretive nature of cryptocurrency, not to mention its digital format, means virtual currency investors with large holdings have to record their account details preferably on paperor risk losing everything for their heirs should something unexpected happen, experts say. People need to document that they own it, where they bought it, and how someone can get access to it, says Kevin Ruth, head of wealth planning and personal trust at Fidelity Investments' Private Wealth Management. Wealth managers and estate planning attorneys have only recently begun to grapple with the issues thrown up by their wealthy clients who have started dabbling in bitcoin and competing cryptocurrencies. Unlike other investments, you can sign up to buy virtual currencies on an exchange today and not even use your own personal information, Ruth says. This could change, of course, if regulators begin to require identification, as is beginning to happen in South Korea . But for now, your heirs may not know if you have a cryptocurrency account if you havent told them, or more importantly, written down where it is and the private digital key needed to access it. Even though it exists in this virtual world of 1s and 0s floating around, it is property, says James Lamm, an estate planning attorney with Gray Plant Mooty in Minneapolis who specializes in digital assets. Complicating matters, the exchanges that exist, like Coinbase and Bitstamp, do not ask account holders to name a beneficiary, which is common wi Continue reading >>
There's Little Value In Bitcoin Stocks -- Even If Bitcoin Rises | Investorplace
Home > Trading > Trading Advice > Theres Little Value in Bitcoin Stocks Even if Bitcoin Rises Theres Little Value in Bitcoin Stocks Even if Bitcoin Rises So far, there's no good play in the equity markets on the cryptocurrency trend For what its worth, Im rather skeptical of cryptocurrencies, including bitcoin. I am sure however, that investors should stay away from bitcoin stocks. While, there may well be some value in bitcoin and offshoots like Bitcoin Cash the technology of the blockchain no doubt has utility trading in bitcoin stocks at this time would be repeating the past mistakes of the dot-com bubble. As is always the case with investing, price matters. And from here it seems increasingly difficult to justify the prices paid for cryptocurrencies like bitcoin and ripple, let alone those created by smaller initial coin offerings (called ICOs). Value matters for bitcoin, in particular, because its simply a terrible currency , as I wrote earlier this month. Of course, thats just one mans opinion. But what has to be a concern for cryptocurrencies themselves is the clear irrationality in the equity markets towards stocks exposed (however lightly) to the space. Theres literally zero argument at this point for any investor to buy bitcoin or even blockchain related stocks. And the huge moves in those plays, as many people have noted, are reminiscent of the dot-com bubble. As someone who worked in a brokerage house at the peak of that bubble, I too see the similarities. And no matter what bitcoin itself does, bitcoin stocks are likely to end up the same way their dot-com predecessors did: at zero, or close. The most recent beneficiary of the crypto craze is Eastman Kodak Company (NYSE: KODK ). The company announced a new KodakCoin and is also offering a financing deal fo Continue reading >>
Death & Bitcoin: How I Prepared My Familys Digital Inheritance
Death & Bitcoin: How I Prepared My Familys Digital Inheritance As a writer who earns bitcoin and saves as much as I can with a family of four, Ive recently begun preparing my familys digital inheritance. When I pass, my wife will take over all of my assets, and this includes bitcoin. Preparing another person to gain access to their bitcoin private keys before death is necessary. Getting old is something we cant stop, but we can prepare our loved ones for when we leave the earth. Recently, I have been making somewhat of a digital will for my wife for when I die so she will be able to access all my online accounts and bitcoin access. If I were to unexpectedly die it would be tough for my wife to manage our bitcoin assets without help and guidance. This issue is something bitcoiners should consider. Some people are not married and may even have to disclose this information to a family member or close friend. Since before bitcoin, digital inheritance has been a problem to solve for people worldwide. If a friend or family member cannot gain access to your passwords and some personal information, then things like online bank accounts, email, and social media can be lost forever. Additionally, this also applies to cryptocurrency with passwords, PINs, and 12-24 word mnemonic phrases (seed). If you dont leave this information behind somehow, then stored bitcoins could be lost forever. Steps I Used to Ensure My Wife Gets My Bitcoin When I Pass This past month I have been preparing my digital inheritance that will be given to my wife when I complete it. Its nothing technologically innovative but merely a small notebook of handwritten information on how to access my online accounts and cryptocurrency. Access to our bitcoin is important because it could help with future living expe Continue reading >>
How Do You Pass On Your Bitcoin When You Die?
How Do You Pass on Your Bitcoin When You Die? By Adam Hayes, CFA | November 29, 2016 1:45 PM EST Bequeathingassets in the form of inheritanceis a long standing wish for many individuals, whether it is to their children or grandchildren, to a university, or to a charity. When it comes to bank accounts, investments, or property, there are established rules, laws and protocols that are followed such as the use of wills, life insurance, trusts, and probate. How does one, then, transfer ownership of Bitcoin to their heirs? Bitcoin addresses, also known as " wallets ," represent public keys, but can only be accessed if one also has possession of the corresponding private key. Since there is no way to reverse engineer a private key given a public key hash, if the private keys are lost, so too are the bitcoininside one's wallet. Here are some ways that people are now using to ensure that upon their death, the bitcoin they own doesn't simply get lost in the ether: Perhaps the simplest way to effect a transfer of your bitcoin is to keep your private key stored on a piece of paper, and then place that paper in a safe or safety deposit box as you might do with any other asset that you intend to bequeath. Once your beneficiary has access to both the private and public keys, they can pair them on any number of wallet services, such as blockchain.info. Of course, anybody who comes in to possession of that piece of paper will be able to access it. A further step could be to remove all the bitcoin from a digital wallet and into a "cold wallet," where you erase all traces of the private key online and only keep it locked away in the safe. (For more, see: What is Cold Storage for Bitcoin? ) Nobody knows when they will ultimately perish, but using Bitcoin, you can prepare to send them to Continue reading >>
What Happens To Your Cryptocurrency After You Die?
No one knows how long cryptocurrencies will last, but its a decent bet they might outlast you. Passing your digital holdings on to loved ones after your death isnt as simple as bequeathing cash or other property, though, particularly since wills arent designed for confidential information. Because a private key is all thats necessary to transfer funds from a wallet, including it in your will might be a terrible idea .I would strongly advise against anyone putting any information they consider private into their will, says estate planning attorney Gordon Fischer . Wills, after your death, become court documents and are generally public documents, accessible by anyone. A private key is like an unchangeable password, which is generated when you create a new cryptocurrency wallet. It should always be kept as safe and secure as possible. Although a will might not enter public records immediately, its unwise to risk exposing the keys to your crypto wallets at all. Your family might not recognize the significance of a private key right away, and by the time they do, your digital wealth could be pilfered by crafty crooks or other unsavory characters. Fischer notes that trusts, however, are generally private documents. With conventional assets, theres an established procedure for claiming them through probate court, but with cryptocurrencies the process is less certain. Complicating matters is that many cryptocurrency exchanges dont let their customers name beneficiaries. Coinbase, the largest trading platform, puts the burden on the heirs to claim any assets left by the deceased (so, hopefully your family knows which exchange you use). Another major bourse, Gemini, declined to comment for this story. Of course, the problem isnt confined to the cryptocurrency world: Popular sto Continue reading >>
Bitcoin's (btc) New Record Price Of $6,000 Means Satoshi Nakamoto Is Worth $5.9 Billion Quartz
Bitcoin recorded a new high today, hitting $5,991 on the benchmark CoinDesk price index. On major exchanges like Bitfinex and Bitstamp, the price briefly crossed $6,000 intraday. While bitcoin bulls celebrate yet another milestone for the cryptocurrency, there is one major beneficiary to what has essentially been a nine year-long rally: bitcoins inventor, Satoshi Nakamoto. The pseudonymous creator is estimated to own 980,000 bitcoins , amassed from mining the cryptocurrency in its early days. The stash has remained untouched for years. What is that worth today? At $6,000 a coin, Satoshi would be worth $5.9 billion. That would put him/her/they at number 247 on Forbes list of the worlds richest people . Satoshi is just below Wal-Mart heiress Ann Walton Kroenke and Samsung scion Jay Lee; and above Alibabas Joseph Tsai and Mara Asuncin Aramburuzabala, who inherited the Corona brewery fortune. Thats a good return for writing a piece of nine-year-old, open-source software. And arguably, even $5.9 billion is too small a reward for inventing magic internet money . Continue reading >>
Why Can't Gold Compete With Bitcoin?
Opinions expressed by Forbes Contributors are their own. Whenever Geopolitics takes center stage we are used to seeing VIX rise and Gold rise. While that relationship still exists, it seems as though more and more, Bitcoin is the beneficiary of any global turmoil. Since May 1, we have had 4 noticeable increases in volatility. Bitcoin responded much more acutely than gold did to each of those rises. Now, almost six months later, Bitcoin is up over 15.5% while gold is only up 1.6%. It could be that these spikes in volatility were quite low on an absolute basis (VIX barely reached 16 the entire summer), so gold, the more mature product didn't need to react much? That explanation would be the best from the perspective of gold holders. Is it because so much wealth has an easier time accessing cryptocurrencies than gold? That the belief that cryptocurrencies is not as burdened by borders and physical location as gold? That is a possibility and one that would undermine the use of gold going forward. Is it just because there is so much more going on with cryptocurrency adoption rates that alternative reasons dwarf any geopolitical concern? This seems the most plausible explanation to me. It would alsofit into a scenario where those who want to own gold already own it, limiting new flows, while bitcoin is still a nascent 'product' to be used as a potential hedge? I think the last explanation is the best and it leaves the door open to the ongoing debate - of whether cryptocurrencies can deliver on their hype - or they will disappoint and turn out to be another in a long line of bubbles. For me, the jury is still out on the long term future of Bitcoin, but it is clear, at least in the U.S. that speculators willing to trade bitcoin are hampered by the lack of a 'mainstream' vehicl Continue reading >>
How Do I Set Up A Beneficiary For My Bitcoin In The Inevitable Case Of My Death ?
How do I set up a beneficiary for my Bitcoin in the inevitable case of my death ? New comments cannot be posted and votes cannot be cast I've been working on inheritance and crypto for a few years now. Do NOT leave details about private keys in your will. In many jurisdcitions wills become public documents and it's likely your coins will get stolen before your family can move them. Here's a template that you can use so that your loved ones can actually access your bitcoin if/when something happens: Here's an article outlining 7 steps for do-it-yourself estate planning: If you prefer video, I talked about how to do your own Estate Planning (tech & legal) in Zurich earlier this year (scroll to the bottom of the page); 5 points 1 year ago edited 1 year ago just send your main hodlings to a smart contract that allows withdrawal in two ways: to some key owned by someone else you trust from your family, etc after certain date then it's just a matter of rotaing the smart contract lock time and move the funds each time. if for some reason you are not able to update the lock, your family will have access to the funds. It may be a hassle but you don't require any TTP. very succesful app imo. 10/10 would like to see an app that automates the process. edit: each time you spend from the smart contract locked funds you'll need to send the change to the same or an updated contract. edit 2: you could also specify multisig for the second withdrawal option, so you could specify more than one relative. expensive contract tho. I assume you're talking about smart contracts using the bitcoin network. Eventually wallets will roll out functionality to do this sort of hierarchical multisig with time locks in bitcoin, but I'm not aware of any in production yet (if you've got one please let me k Continue reading >>
Estate Planning With Cryptocurrency
Estates & Estate Planning , Taxes & Finance , Wills, Trusts & Estates A cutting edge issue in traditional estate planning is cryptocurrency. Cryptocurrency ( as defined by Investopedia ) is a digital or virtual currency that uses cryptography for security. A cryptocurrency is difficult to counterfeit because of this security feature. A defining feature of a cryptocurrency, and arguably its most endearing allure, is its organic nature; it is not issued by any central authority, rendering it theoretically immune to government interference or manipulation. The most common, and for now the unofficial standard for cryptocurrency (AKA altcoin) is Bitcoin . But the market is getting increasingly more crowded with others including Ripple , Dash , Litecoin , and Zcash to name just a few. (For the purposes of this article, well focus on Bitcoin, but these points could be applied to cryptocurrencies in general.) Many posts could be written about cryptocurrency, its benefits and its challenges, but this post is focused on how to account for Bitcoin in your estate plan, as opposed to a standard currency, like the U.S. Dollar. The IRS has determined, at least for the time being, virtual currency is treated as personal property for federal tax purposes . So, virtual currency transactions are most definitely not the same as, say, online banking through your local community credit union. Instead, for general tax purposes, Bitcoin is treated like tangible property you own, like a painting or a car. Unlike a checking or saving account. there are no beneficiary designations on Bitcoin accounts. In fact, quite the opposite Bitcoin is anonymous. Therefore, if you were to die without communicating that you have Bitcoin, it will die with you. For security reasons, of course you wont want ever Continue reading >>
5 Things Bitcoin Owners Must Do When Estate Planning
5 Things Bitcoin Owners Must Do When Estate Planning Jeff Vandrew is a licensed attorney, a Certified Public Accountant and aCertified Financial Planner. Based in New Jersey, he restricts hispractice to two areas: estate planning and tax planning. Here he explainsthe steps bitcoin holders should take when planning their estates. When it comes to estate planning, very little has been mentioned about bitcoin. While bitcoin is subject to wills and revocable living trusts like any other asset, there are some special considerations. Most seasoned holders of bitcoin are aware of IRS Notice 2014-21 . For those unaware, the notice holds that for US tax purposes, bitcoin is to be treated as property rather than currency. The notice is wrongheaded, foolishand probably was issued with intent to slow down bitcoin adoption. Nonetheless, were stuck with it until bitcoin adoption increases to the point where the IRS recognizes it as a currency. Much ink has been spilled about the more obvious consequences of bitcoins classification as property, namely: Whenever bitcoin is spent on goods or services, the spender must recognize taxable income or loss on the difference between tax basis (usually the price at which he acquired the bitcoin) and the fair market value of the bitcoin at the time spent. Bitcoin miners must recognize ordinary income equal to the fair market value of the bitcoin mined at the time of mining. If your employer pays you in bitcoin, such payments must be reported on your W2 and are subject to tax withholding in US dollars. Beyond these more obvious consequences, however, there are some hidden estate planning traps when it comes to the death or incapacity of a bitcoin account holder. To avoid these problems, here are five steps you need to take now in your estate pla Continue reading >>
Bitcoin Futures: What You Need Toknow
Written by: Lukas Schor of The Argon Group Wall Street can finally participate in the bitcoin game. Cboes bitcoin futures (XBT) trading makes it possible for institutional investors to benefit from price fluctuations in the cryptocurrency, without actually buying bitcoins themselves. With additional bitcoin futures contracts being launched by the worlds largest regulated FX marketplace CME in less than a week, a new era begins for the digital gold. Futures contracts allow two parties to exchange an asset at a specified price at an agreed upon date in the future. Both the CBOE and CME futures are cash-settled, meaning there is no actual exchange of bitcoins involved but rather theres only a cash payment between the agreed upon price and the actual market price at this future point of time. For example, Bob buys a 6-month BTC futures contract from Alice with a $15,000 settlement price. Lets assume that on that day 6 months from now, the actual price of BTC is $18,000. Instead of Alice fulfilling the contract by selling Bob a bitcoin for $15,000 and Bob taking it to an exchange to sell it for $18,000, Alice will simply give Bob the $3,000 difference. Sunday, when the first bitcoin futures started trading in the USA, there were considerable delays on the Chicago Board Options Exchanges (Cboe) website. The web servers could no longer cope with the rush of visitors. At times the website was no longer accessible. Two hours later it was announced that, despite the technical problems, over 800 contracts had already been sold. (Its more than 5000+ now!) The Cboe surged as much as 26 percent from the opening price in their debut session, triggering two temporary trading halts designed to calm the market. One interesting insight we could already see after few hours of trading is t Continue reading >>