Bitcoin and Real Estate Becoming a Hot Trend
It’s no surprise that bitcoin has made quite a mark on the world in recent days. Though the use of bitcoin is still a bit of a mystery, many industries are already taking steps and considering the way that it can and will be used in the future markets. Real Estate is one such industry that is taking the idea of bitcoin usage into consideration. Is there a future for bitcoin in the home buying and selling industry?
Will people be able to make these large purchases with bitcoin in the future? Only time will tell. Until then, there is much to consider. Here is a little understanding about bitcoin and how it will fit into the future of buying and selling homes.
Who’s Behind it All
One of the reasons why people are so hesitant about bitcoin is the lack of knowing who is in charge or who is regulating the service. History has recalled the first instances of bitcoin happening in 2009, but the rest is much of a blur. Some people believe that it is based on a type of white paper, which is simply a group of people. However, bitcoin really doesn’t have any type of central command to speak of.
Many companies have taken the idea of bitcoin and ran with it. They have utilized the peer-to-peer exchange company, and they have been using computers from throughout the world in order to process and track various transactions. Since bitcoin can move throughout the world, it has been utilized by various industries throughout the world. The only question is, is real estate ready for these hot new trends.
Difficult Times for the Newbies
If you will remember, when credit cards first made their way into the spotlight, they were discredited by many. In fact, many people were skeptical of them and how they worked. This was a huge ordeal, and people found it hard to wrap their heads around the overall idea.
The key to getting credit cards to work, or getting people to accept it after understanding it, is the same concept that needs to happen with bitcoin. People need to first understand it and then accept it before any more industries can break into the use of bitcoin in their practices.
One of the biggest public relations issues surrounding bitcoin is the idea that it has been used for criminal transactions, and it has. It is also not officially accepted as a form of currency in the US yet, but individuals can trade bitcoin for various products around the world. Since transactions cannot be returned or undone, regulations need to be completed and soon.
The Benefits of this Technology
The question of “if” is actually more of a question of “when and how.” Since cryptocurrency is starting to becoming a widely accepted form of currency, it should eventually be used for various other things like buying and selling homes. Bitcoin might still be view with skepticism, but Blockchain technology is going to be here to stay for many years.
Blockchain technology can help encourage faster movement for the title and mortgage process. It can also be beneficial in stopping an epidemic of document forgery and fraud. Even though bitcoin and Blockchain technology is still fairly new and uncertain, the way that things work can be beneficial in helping people secure the homes they want faster, and help the buying and selling industry avoid incidents of fraud and forgery.
As of right now, the benefits do not outweigh the risks. However, there is a huge possibility that this blockchain technology will grow and flourish to provide bigger and better benefits. In this case, it is a true possibility that the blockchain technology will be a viable option for buying and selling homes in multiple communities, starting with the larger states and cities, but with benefits comes a pile of risks as well.
The Risk for Home Sellers
Unfortunately, there are risks that come with using bitcoin in the home buying and selling world, and these risks are pretty major still at this point. The first issue that seems to be the biggest risk is the lack of understanding and acceptance of the blockchain technology. At this point, there seems to be less acceptable than many in the market were expecting. If the market is demanding that cryptocurrency be a normal part of the transactions, then the people and the industry must accept the form of currency that comes around.
It is a little more complicated than that, however. A title company has the right to choose the accept cryptocurrency from a buyer, which would be like a form of creative financing, but they must be willing to accept the risks that come with it. The client is not taking the risk; the seller is taking a major risk, and they aren’t just going to walk away with a bitcoin strip of paper.
Their money will come in US dollars. People have the option to turn down a buyer if they do not want to accept the risk that comes with bitcoin or other blockchain currency. The fluctuating numbers and values make it riskier than simply going through a title company to secure or buy a home.
Taking the Risk
With all of this in mind, there has been one location that has taken a step toward the use of bitcoin in the home buying and selling industry. Southern California, as advanced as they are, have been the first to successfully use blockchain technology in the purchase of a home. The man who purchased the home used as many as 3,300 bitcoins to purchase his home, which was worth as much as $3.2 million.
The more that homes go on the market and the higher that blockchain technology grows in popularity, the bigger the chance of using this technology in this industry will become. Places like Southern California will be taking the risk and taking the chance to help individuals gain a better and faster way to secure a home and purchase it without much hassle. There is still a long way to go in the industry and with the technology before this can happen, unfortunately.
It is a great chance that real estate will soon have a footing in the bitcoin industry. The industry has been making a very compelling case recently, but it has also been known to lead to various frustrations. The kinks are still there, and until they are worked out, there will be few, if any, homes purchase by using this blockchain technology. This creative financing still has a long way to go, but with the potential in the future, who knows what will affect the real estate industry next.