What are Bitcoin and Block Chain?
Bitcoins are the digital currency, also known as virtual currency or crypto currency as cryptography is used to control the creation and transfer of bitcoins. They are created by a process called mining and all the transfers are recorded in a computer file called a block chain which is identical to a ledger that deals with conventional money. A user can send and accept bitcoins from their mobile, computer or web application by using wallet software. There is nothing illegal about bitcoins or the ability to trade or exchange them for services or real currency. However, the currency has, in the past, been used to facilitate criminal actions such as unlawful drug sales since the bitcoin users are essentially anonymous.
Rules for Using Bitcoins and Their Longevity
Bitcoins are virtual currency. It has different legal status depending on the jurisdiction. In the United States, this currency is considered property and not money for tax purposes. This means the gains will be taxed in the same way as investing in other property when you buy low and sell high. If your bitcoins are lost or stolen, they are gone forever. If you buy them or use them to make payments, the transaction is transmitted through a code using a private key.
If you have no key, you have no access to them. There is no bank or person to reclaim your key, so it is important to protect your key and wallet at all times. Encrypting your wallet is also recommended in order to defend it from being stolen by hackers. In addition, you should also consider backing up your encrypted wallet. Without a backup, if you misplace your computer or hard disk that holds your encrypted wallet, your bitcoins would be lost forever. According to law professionals and bitcoin attorneys, bitcoin valuation is an extremely volatile market. At times, the value of the bitcoin has soared to huge heights and then dropped suddenly. Investing in Bitcoin can generate substantial gains and losses depending on the market conditions.
Block chain — Bringing Transformation in Law Practice
Block chain is nothing more than a decentralized digital ledger that is available publicly. This technology diminishes the need for a central authority, with every recorded transaction available to anyone with access to block chain to verify. Bitcoin attorneys and law consultants believe that those law firms that take steps now to tap into this technology will benefit from these decisions. Additionally, those firms that fail to do so may be left behind. The technology may revolutionize the way that clients pay for legal services, saving substantial transaction fees for all parties. Naturally, there are numerous legal considerations associated with implementation of Bitcoin payments for any service.
The popularity of Bitcoin and block chain technology is growing at an impressively fast rate. Competent Bitcoin attorneys can advise interested parties on the unique legal issues presented by this new technology.