Cryptocurrency? No thank you

A fee-share law firm has announced that it is the first top 200 UK law firm to take payment in cryptocurrency. It claims this means it can work with a wider variety of clients, and its “partners” (self-employed consultant solicitors) can be paid how they choose.

It is, of course, not the first law firm to do so in the UK, with others having done so as early as 2013.

Inksters (one of the first fee-share law firms in Scotland) will not be following suit. I have five reasons why:

1. Volatility

Cryptocurrencies can fluctuate widely in value. Inksters would not expect its consultant solicitors to agree a fee in ether that might end up being a small fraction of the pound sterling equivalent on payment.

2. Lack of regulation

The current lack of regulation in the cryptocurrency market has seen many scams, hacks and market manipulations. It is therefore not an area that Inksters would wish to be seen in or have its consultant solicitors be part of.

3. Money laundering

Cryptocurrencies are susceptible to money laundering activity. The predominant reason is anonymity. Individuals and criminal organisations can mask their true identities by using different aliases and pseudonyms, essentially allowing transactions to be conducted anonymously.

4. Slow and cumbersome

Due to their complexity and their encrypted, distributed nature, blockchain transactions can take a while to process, compared to traditional payment systems such as cash or debit cards. Bitcoin transactions can take several hours to finalise.

5. Environmental harm

Cryptocurrency transactions use a huge amount of computing power and vast amounts of energy. The electricity used per year to mine bitcoin surpasses the annual energy usage of many countries in the world.

For these reasons, Inksters will continue to take payment, and pay its consultant solicitors, in good old fashioned pounds sterling.