This blog post will be Part 1 of an ongoing series discussing cryptocurrency and cryptoassets as they relate to South Carolina law and Lowcountry Legal Solutions’ practice areas. If you have questions or wish to know more after reading, please don’t hesitate to contact us…
Cryptocurrencies have been a healthy passion (obsession) of mine for about five years now. In that time, I have been keeping up-to-date on law related news in the space and particularly any news coming out of South Carolina. Outside of federal tax guidance (IRS Notice 2014-21) there has been very little in the way of any official word from federal agencies, and even less from the South Carolina General Assembly or Courts. This slow-walking is perhaps a good thing as the space has organically developed a rapidly growing sub-culture all across the internet – YouTube, for example, has a myriad of regular content channels devoted to every aspect of the ‘crypto space’.
In fact, I am greatly downplaying just how big and rapidly the cryptosphere has grown. Bitcoin (the original cryptocurrency) went live 10 years ago this past January. Since that time, bitcoin went from being the digital plaything of dedicated internet surfers and online Magic: The Gathering players to hitting over $19,000 per coin on the exchanges in December, 2017 – a $325 billion market capitalization. Despite its well-known price volatility, bitcoin has been the number one performing asset (in terms of percent growth) since it was created 10 years ago. Further, more than 2,000 new cryptocurrencies and cryptoassets have been spawned or spun off from bitcoin.
With such incredible exponential growth, the possible angles of discussion are equally numerous. This blog series will therefore focus primarily on two things: (1) the basics of cryptocurrency concepts for the purpose of educating the legal professionals in South Carolina; and (2) the intersection between cryptocurrency and South Carolina law, and specifically those areas which Lowcountry Legal Solutions practices. For our purposes, the majority of these discussions will revolve around bitcoin and the other big cryptoassets (more on these later) as those are the most likely to be encountered in practice.
Why is this important to our profession? While there is a narrative that bitcoin is dead or will die soon, these claims have been greatly exaggerated and consistently proven wrong. See e.g. https://99bitcoins.com/bitcoin-obituaries. Even though past performance is no indication of future growth, I can confidently say as an observer of the space, the growth will continue. Further, as ownership and investment in the space grows, the client who has these assets in their portfolio will come around more and more. As an attorney, or other professional, understanding how ownership and conveyance works is a must. Stay tuned, stay relevant.