Cryptocurrency is digital money which uses encryption techniques to generate currency and verify the transfer of funds. It has been designed to be quicker, cheaper and more reliable than our regular government issued money, removing the middleman in all transactions. Through specialised exchange sites you can buy and sell cryptocurrency i.e. Bitcoin, using traditional currency (GBP). Acting in the same way a traditional ‘pocket’ wallet would, these exchanges have inbuilt virtual wallets to store your purchased cryptocurrency.
One of the many advantages of cryptocurrency is that ownership can be pseudonymous, meaning its possible to send and receive cryptocurrency without giving any personal information. This means that there is no way of knowing when someone owns cryptocurrency and in order to gain access to someones wallet you will need to know the public and private keys. These keys are the code, or passwords, that log you into your virtual wallet to buy and sell the cryptocurrency from the exchange.
Each cryptocurrency 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 money in the wallet. If an owner dies without passing on the private key, the wallet may be discovered only to realise that they will never gain access to the wealth inside. To prevent this, the owner has to ensure that someone knows about the currency and gets a copy of the private key.
In both instances of an intestate or testate estate, the owner must share the private key for others to access the wealth in the wallet. If a Will is written, the cryptocurrency will be distributed as per the wishes written. If there is no Will and the private key is known, the cryptocurrency will be added in with the total value of the estate and distributed following the rules of intestacy.
Writing a Will and keeping it up to date is the best way to ensure your estate, including digital currencies, are distributed as per your wishes.
Does your Will take account of your online and digital assets?
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