Until recently, Blockchain technology was simply associated with bitcoin and similar cryptocurrencies, disrupting the traditional financial world and questioning the way we have always treated money transactions and payments. It has also launched a frenzy race for many other major industries, who started to realize the full potential of this new technology and how they should start applying it in their everyday business routine. Cryptocurrencies have allowed for easier payments and facilitated money exchanges, and blockchain have created a new form of digital ownership never seen before. For example, non-fungible tokens, also called NFTs, now allow a user to own and trade many different forms of digital art with a certified and verified proof of ownership. Blockchain could also be used in many other applications across society, like secure sharing of medical data, voting mechanism, and much more.
It would thus be the logical next step that the real estate industry starts utilizing this new technology to process transactions and create real estate processing platforms. But first, what is blockchain and cryptocurrencies, and how are they related?
Blockchain and cryptocurrencies: what are they?
Blockchain allows block of information and transaction data that once created, are being validated by a chain of other blocks, making it resistant to modification or data alterations. This allows the participants to verify and audit transactions independently and in a quite inexpensive manner. It is considered decentralized, using peer-to-peer network to store data, and thus eliminating the risks that come with data being held centrally in one place.
Cryptocurrencies, such as bitcoin, use this blockchain technology to record transactions. Individual coin ownership are secured in “blocks”, ensuring control over the creation of additional coins, and a full verification of the transaction records and transfer of coin ownership. Since bitcoin’s successful release, many other cryptocurrencies called “altcoins” have been created, which could theoretically be used in everyday life for daily transactions. Unlike fiat money, cryptocurrency is not regulated by central authorities or backed by any governments, making it a versatile payment solution.
How can cryptocurrency and real estate work together?
Since cryptocurrency can function just like any other form of payments, there is no reason one couldn’t pay in crypto for a real estate transaction. The process may seem complicated at first, but in the end, it simply offers an additional way to pay or receive money and brings more flexibility into the deal. Even more, by tokenizing real estate property and making it digital, assets can then be traded on an exchange and all transactions can be done online.
Cryptocurrencies introduce new platforms and marketplaces to list properties and new ways to connect buyers and sellers. It reduces the intermediaries and automates many steps traditionally fulfilled by lawyers and banks, with a huge improvement on the overall cost and speeding up the time needed for each transaction. Since information is stored in the blockchain, it is accessible to all peers on the network, making data transparent and permanent. Those advantages can be positively used by the real estate industry for a smoother, sped up process.
Recently, properties have been sold using crypto, like these two luxury properties on the island of Madeira in Portugal that were sold in Cardano, a new altcoin, totaling $4.7 million. Two luxury condos are also up for sale in one of Florida’s most exclusive oceanfront, for a total price of $31 million, with developers accepting payment in bitcoin.
BARNES New York is moving forward with cryptocurrency
BARNES has been assisting its clients in New York state for more than 10 years, and strives to bring you the best level of service to make your real estate transactions easier and less time consuming. By accepting cryptocurrency payments, BARNES is positioning itself as one of the first initiators in the industry to do so and is looking forward to adopt more innovation in the near future. Please feel free to contact us for your real estate needs.