With the constant change and advance in technology, and being that millennials have all the information, understand how every dollar in their pocket is indebted, and realize that their own national currency is indebted to an-already indebted US Dollar, enthusiasts see it as an alternative way of paying for regular things, and an option to acquire their home.
Maybe you have heard about cryptocurrencies, maybe you haven’t, but we are confident that you already have heard about Bitcoin and other cryptocurrencies. With cryptocurrencies on the rise, it is time to get informed and learn some basic concepts that relate to the currency and the possibilities it offers.
What is Cryptocurrency?
It is a digital currency. It is a medium of exchange, created and stored electronically in a “blockchain” using encryption techniques to control the creation of monetary units and verify the transfer of funds. It emerged as a side product created in 2008, by Satoshi Nakamoto “A Peer-to-Peer Electronic Cash System .” This creation found a way to build a decentralized digital cash system.
What is Blockchain?
It is the technology that establishes the digital currency. It allows digital information to be distributed, but not copied, meaning that each portion of the data can only have one owner. It is described as a “digital ledger” in a network. The records are public and exist simultaneously in millions of places, which makes it harder to hack. The proponents of the blockchain call it “a trustworthy system in a trustless world”.
The list of cryptocurrencies is long, some of them are certainly more common, and they started to make an impression in real estate, so for the effects of this article, we’ll focus our attention on Bitcoin.
What is Bitcoin?
It is the first and most famous digital currency, it works without a bank or intermediary. It has created wealth for investors, and some had cashed out and used it to buy their homes. Some real estate sellers are willing to accept Bitcoin as payment.
With the marked evolution in technology, and the influence it has on the way businesses are operated and transactions are handled every day, cryptocurrency has a gigantic playfield in the real estate market. In Florida, some real estate transactions have already closed using Bitcoin. A real estate transaction will be conducted for the most part the same as a cash transaction; however, Natalia Karayaneva, CEO of real estate startup Propy highlights “The main issue we’ve experienced is exchanging large amounts because sellers, very often, want to get paid in fiat,” she explains. “When payment is crypto to crypto, large amounts have to be sent in smaller portions as transactions are not reversible. This is because sending large amounts of crypto is still a risky process e.g. if a hacker swaps a public address, the transaction is not reversible.” For some sellers, it may be difficult feel confident to accept Bitcoin; in regards to the buyers, you may have to “sweeten the pot” for them to accept the cryptocurrency.
Sellers and buyers considering Bitcoin as a payment method should first look at the pros and cons before moving forward.
Pros and Cons of Buying and Selling Property with Bitcoin
Buyers and Sellers
The Pros: An international currency, independent of a country or central bank, for a globalized economy, with the equivalent of cash, it provides:
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The Cons: Bitcoins advocates are hoarding it, for what they believe is hyperinflation, as they don’t trust the Federal government, neither the central banks.
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Sellers
The Pros
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The Cons
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Buyers
The Pros
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The Cons
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As for what to expect for Bitcoin in 2019, it is uncertain, as the last two quarters of 2018 the cryptocurrency had tumbled. The magic about the coin was that it has a fixed supply, which is supposed to prevent manipulation and inflation. We’ll have to wait to see what happens.
Contact us with any questions about our real estate closing services by phone (305) 865-5718 or by email info@elitetitleagencyfl.com.
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