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Bitcoins are celebrating their 10th anniversary, and not withstanding there value can move up and down a lot, if you bought one of these 6 years ago in 2012 for £2.83, it is now worth a minimum of £4,000. That is some return on investment!

It is a form of cryptographic currency used over a decentralised block chain. In essence, it is a way of earning money and storing wealth. It is found only on the internet. It is kept in a wallet that you need a private key to access (like a pin number) and you have a public key (equivalent to a bank account number).

You make money where a sender wants to pay something, he pays for it by putting one or more Bitcoin coins into the block and the so called “miner” encrypt the transaction, for which they get a fee and then send it to the intended recipient. The person receiving it can then spend it in the same way, and this is all recorded on the block chain.

For family lawyers, if you have the public key, you can trace all the  trades made by an individual on that account so with the right information, it is similar to looking into someone’s bank account.

As it is a new form in which clients can hold assets, lawyers have been concerned about the need to learn about this and people need to understand the format to keep up to date. However, basically it is an asset like any other when it comes down to it and has to be part of any clients wealth when you come to sort out the parties assets.

There are issues around how you value bitcoins and tax payable with Bitcoins but that’s for another day.