Buying a home with Bitcoin? While that may not represent the immediate future of home buying, there is no denying that technology in as yet unforeseen forms is on real estate's horizon. Much of it is exciting. In some cases, the future is already evident: Virtual reality and remote imaging, drone photography and smart applications, data collection and management, even information-sharing and service resourcing have all influenced the industry in significant ways.
While Bitcoin has gained respect in certain segments of modern commerce, there is still much uncertainly to the layman about exactly what it is, how it is used, what protocols and regulations govern its use, and its applications for purchases of real property. It is, in a sense, uncharted territory — although in 2013 a Long Island homeowner advertised publicly that he would accept payment in Bitcoin for his home.
Today, five years later, at least one analyst believes that an international currency system represents the future not only for real estate, but for global commerce in toto. Regulation and surveillance will be necessary, according to Ben Shaoul, who owns a New York real estate development and property management company. However, he believes that Bitcoin flexibility and transparency will be key components of an expected and much needed real estate overhaul.
The digital world has inaugurated changes not only in communications and daily life, but also in commerce, banking and global commerce. The need for innovative new techniques to track multi-phased transactions and increasing concern with security and privacy have given birth to blockchain technology, a fundamental transformation of information exchange and tracking.
Shaoul also cites the growing real estate market share of the Millennial generation. That influence on real estate is instrumental in directing change. Millennials embrace blockchain and Bitcoin, are adept at "out of the box" thinking and technology, and are firmly entrenched in global orientation.
Blockchain: Synthesizing and Sharing
Because blockchain allows access to specific shared information only by authorized actors, it has been touted as the way to assure that future economic transactions are safe, speedy, effective and decentralized. While real estate transactions today are typically conducted in person-to-person settings, there is little reason to believe that blockchain won't usher in a new era of efficiency and security with the documents needed to complete the sale. By assuring that all parts of a complicated transaction are easily accessible while remaining secure and controlled, this all emerges as not only a path to financial gain, but also a great boon to time and energy savings.
The addition of Bitcoin to the equation has enormous implications for real estate.
Other spokesmen for fundamental change in the real estate sector outline what they consider "an exploding new ecosystem" and the "emerging third phase" of real estate technology. Writing in Forbes, David Snider and Matt Harris insist that real estate is the new frontier for entrepreneurs and venture capitalists.
That future, they conclude, will most definitely include new technology and, while they don't specifically identify blockchain and Bitcoin, they characterize "Real Estate 3.0" as a synthesis phase which will usher in capabilities related to the Internet of Things, spatial visualization, big data and global transactions, information accessibility, and enhanced resources for managing and servicing complex transactions.
In 2016, according to Realtor Magazine, there were upwards of 2.5 million items that consumers could purchase with Bitcoin. It is only a matter of time, most observers agree, until multi-million dollar real estate transactions will be effected through digital records access and storage, and transfer of cryptocurrency from buyer to seller.
The introduction of Bitcoin on the world stage as a way to pay for tangible goods and desired services has been compared to the introduction of credit cards. The learning curve may be steep and there will undoubtedly be hills and valleys that precede its widespread acceptance, but the signs are clear.
Among the pros and cons of Bitcoin, depending on individual points of view, are its fluctuating values; most observers acknowledge that future digital currencies may emerge with very difference characteristics. But it's difficult to ignore the current effects, and the seemingly endless potentialities of both blockchain technology and cryptocurrency.
Universal platforms that utilize both seem destined to become a part of mainstream real estate in the not-so-distant future.
About the writer: Gary Ashton
Gary Ashton REALTOR®
The Ashton Real Estate Group of RE/MAX Advantage
210 12th Ave South, Suite 201
Nashville, TN, 37203