Would you buy a new home with bitcoin?
You’ve probably already heard of the term ‘Bitcoin’ or ‘cryptocurrency’ - it’s been the mainstream talk of the town, the value of many of them has also risen several thousand % over the last couple of years, but can it change the way you buy a house?
In its simplistic form, Bitcoin is a type of digital currency, which is based on blockchain technology, which is essentially a lender or list. This list is held by many computers around the world and regularly compared meaning that there is a definitive list of who owns them and how many. It’s also encrypted, & it has even been considered as the new gold by Peter Thiel, the co-founder of PayPal.
The current trajectory has been sharply upward and although this may or may not continue or go into reverse, this signifies the growing importance of Bitcoin and cryptocurrency.
Can you buy a property with Bitcoin?
Yes! In fact, this has already become a reality, there are websites out there, which allow sellers to list their residences and connect with buyers who are interested in paying in bitcoin. Tycoon Michelle Mone sold her £192m of Dubai apartments in bitcoin, and two homes sold using Bitcoin in the UK in 2017. London property developer ‘The Collective’ has even become the first firm to allow its tenants to pay their deposits in bitcoin!
You may be wondering what the pros of this currency are. Here are some of the reasons buying with Bitcoin may become such a big thing:
They can be wrapped up within 15 minutes to a few hours. For instance, whenever you make a payment with bitcoins, the record of the transaction will get sent to the blockchain miners who will then verify the transaction. Although this can take a little longer these days, it’s still much quicker than lengthy bank transfers.
Although there are dangers that the currency can ‘burst’, in 2017 alone the price of Bitcoin shot up by 500%. Not only is the asset growing, but so is the acceptance of the currency. You now see ‘Bitcoin Accepted Here’ signs in more places and financial institutions are taking it more seriously.
As Bitcoins are not linked to any names or addresses or any other private identifying information, one of the main benefits is keeping anonymity. However, you need to keep in mind once you want to convert it into regular currency, anonymity will be lost.
Unlike other transactions, which may involve fees, there are no fees with Bitcoin. So the chance to make a greater profit increases once the value grows. You also don’t have a “margin” to convert the currency from one currency to another for international transactions as long as the seller can accept bitcoins.
Although the Bitcoin Blockchain technology and smart contracts are still considered new in the property market, it’s catching on fast. There are (real) concerns that the bubble may burst, perhaps investing in Bitcoins may be a short to medium term play with smaller amounts of capital which can then be transferred to safer bricks and mortar type investments.
Would you consider buying a property with Bitcoins? And will it be good for the property transaction process? Time will tell, but we may be looking at the future of buying property!