Have any of your clients or potential clients yet asked you if you accept Bitcoin for payment of your legal fees? If not, someone soon will. Assuming you accept this most popular form of cryptocurrency, a/k/a digital currency, a simple “Yes” will suffice. They will smile and that will be that. If you don’t, however, your “No” may well elicit a “Why not?” Can you answer that question? Do you even know what Bitcoin is?
As the word cryptocurrency implies, Bitcoin and other types of digital currency are rather “geeky.” They are neither hard money like metal coins nor paper money like dollar bills. You cannot see or touch cryptocurrency. It does not actually exist as that term is commonly understood. It is virtual money and has become a whole new type of “legal tender” that more and more people use to pay for purchases and more and more businesses accept as a payment method.
A Brief History of Money
Throughout history, governments have controlled and regulated their respective coin of the realm. In the U.S. today, that governmental control agent is the Federal Reserve. Created on December 23, 1913, its main purpose was and is “to furnish an elastic currency” and “to establish a more effective supervision of banking in the United States.”
It was precisely this centralized governmental banking control that Satoshi Nakamoto, Bitcoin’s inventor, set out to counteract. He never intended to invent a new currency. By the way, no one knows to this day who Satoshi Nakamoto is or possibly was. He has remained completely anonymous from the beginning.
When Satoshi announced his new “Peer-to-Peer Electronic Cash System” in 2008, he was the first to have invented a completely decentralized digital cash system. Others had tried and failed. This was the birth of cryptocurrency.
Bitcoin’s Upside
A mere decade later, Bitcoin has taken off like the rocket it was intended to be. Without getting into the mechanics of exactly what Bitcoin is or how it works – more on that next week – you need to know two very basic things about it and its clones that have sprung up in Bitcoin’s wake.
The first thing is that more and more businesses are accepting Bitcoin every day, including the following:
- Microsoft
- PayPal
- Dish
- Expedia
- com
- Subway
- Newegg
- Intuit (QuickBooks)
Bitcoin’s Downside
The other thing you need to be aware of, however, is the dark side of cryptocurrency. Literally. Darknet markets and ransomware demanders use Bitcoin extensively, as do money launderers such as drug dealers. In terms of your family law practice, Bitcoin and other cryptocurrencies like Ethereum, Ripple, Litecoin and Monero are a great way for divorcing spouses seeking to hide assets to do so. While virtually all U.S. cryptocurrency accounts must be tied to the account holder’s bank account or credit or debit card, they are pseudonymous if not completely anonymous. All the identification required to open a cryptocurrency account is an email address, nothing more other than the linked bank account or card.
For more information on additional financial issues you need to be aware of, how gaining your Certified Financial Litigator credential will give you the financial knowledge and skills you need to attract additional high-asset clients, and the other benefits of AACFL membership, please visit this page on our site.
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