Convenience, extended marketplace, and increased security are but a few reasons cryptocurrency real estate transitions are in vogue these days. The whole process of buying property is being transformed as cryptocurrency payments become a full-fledged option.
Let’s look at Bitcoin, as a prime example of how cryptocurrency is catching on not only as an investment trend but for high-end purchases like luxury homes, as well. Right now, there are roughly 40 million Americans using bitcoins, with the value of one unit being more than $40,000. But this value fluctuates (sometimes wildly), so many investors who deal in the currency trade for things of a more stable value, such as property. Bitcoin, Ethereum, Bitcoin Cash, and Litecoin are currently the most popular cryptocurrencies, by market capitalization.
Cryptocurrency speculators often trade for real estate in order to diversify their investments. But for the seller, this volatility means risk. So, accepting cryptocurrencies is a bigger gamble than with more traditional (stable) funds. However, sellers can obviously ask for the cryptocurrencies to be converted to cash, eliminating any risk factors. Other reasons for using crypto may include cashing out for their retirement, taking advantage of crypto property discounts, and speeding up and simplifying transactions.
The role of the Blockchain network (the backbone of Crypto) is another important facet of the emerging cryptocurrency trend toward estate transactions. The main advantage here is that buyers and sellers can eliminate the middleman in any transaction. Transparency is another reason Blockchain is utilized in transitions.
First and foremost, the documents and information involved in transactions are stored across multiple computers, in the cloud, in a fragmented matrix. Owners get a cryptographic key that gives access to all this information. Also, everything involved in these “Blockchain” transactions is recorded for posterity, which can add a layer of security and simplicity. Still, an in-depth understanding and skill with Blockchain seem a prerequisite.
Initial coin offering (ICO), the industry’s equivalent of an initial public offering (IPO), is often used for financing the buying, renting, trading, and investing in real estate. Entrepreneurs incorporate digital currencies into real estate transactions, creating what amounts to shares in real estate property entities. For those interested, here is a list of upcoming IPOs.