Bitcoin has been in the news a lot lately because the value of a bitcoin has skyrocketed over the past few weeks. In fact, as I'm writing this blog post, the value of one bitcoin is equivalent to $17,704.56 USD. With all this hype, many people may be wondering, what is a bitcoin? Bitcoin.org states that "bitcoin is a consensus network that enables a new payment system and a completely digital money. It is the first decentralized peer-to-peer payment network that is powered by its users with no central authority or middlemen. From a user perspective, bitcoin is pretty much like cash for the Internet." In other words, bitcoin is intangible internet currency that can be used to purchase anything and everything all around the world through the bitcoin network.
I am in no way an expert on bitcoin. In fact, up until recently, I hardly understood what bitcoin was or how it worked. Bitcoin is new territory for a lot of people, myself included, and it appears there is a lot about bitcoin that is misunderstood. The Chicago Tribune published an article today titled "Five Myths About Bitcoin" that I found extremely helpful. The article can be found here.
With all this being said, why is it important for family law attorneys to have a better understanding of bitcoin? The answer is simple: bitcoin is digital money that has a value. As a result, if either party to a divorce owns bitcoin, the value of the bitcoin needs to be known and understood in order to equitably divide the parties' property in a divorce. I was recently involved in a case where one spouse discovered the other spouse had purchased bitcoin during the marriage. The value of the bitcoin became central in determining the overall value of the marital estate and how other items of marital property would be divided. If either party or either party's attorneys did not understand what bitcoin was or how it worked, this could have been much more difficult to accomplish. As a result, family law attorneys should be paying attention to bitcoin, because it seems like it is not going away anytime soon.