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 fortune—that 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.
Indeed, that’s the reason why the family of the Colorado man will likely be able to recover his Bitcoins, Walsh says. The family discovered the man invested in Bitcoin upon reviewing his bank account, which revealed debits to Coinbase, a popular wallet and exchange service. With documents in hand, the family approached the San Francisco company, which confirmed the existence of a wallet and is in the process of transferring its contents.