Cryptocurrency the future of real estate transaction
February 11, 2020Cryptocurrency in the real estate market
February 15, 2020
You and I probably ended up in real estate for many of the same reasons: It’s stable, it’s tangible, and it produces cash flow (something we all need to live and function in modern society).
Thankfully, we don’t think we are going to innovate ourselves out of the undeniable power that comes with investing, owning, and developing real estate. But every now and then, something pushes an entire industry, generation, and even world forward
Right now, while the majority of the world is caught up in the hype of bitcoin, ethereum, and litecoin that just in the last year has gone up 6,072% (talk about a solid annual ROI!), many are missing the truly world-changing shift that could take place if this technology is correctly shepherded.
Reasons blockchain technology will transform real estate

- Our monetary system is broken, and cryptocurrencies could be the fix.
- We as real estate investors understand this better than pretty much anyone else. I have never trusted or invested in
centralized banking, fiat currency, and the stock market. I want to control the assets I’ve worked so hard to build. Real
estate to a large degree allows me to do this. Nobody can create more land right next to mine and cause the value of my
property to tank. That can and does happen with centralized banking and government controlled currency. The amount
of trust we are forced to exercise when depositing money into our local banks is a little bit terrifying.
We have been off the gold standard for decades, fractional reserve banking has led to economic meltdown more than
once, and the Federal Reserve that’s supposed to guarantee our deposits only keeps enough cash on hand to satisfy 1% of these transactions. Talk about disconcerting.
The fundamental concept behind blockchain and bitcoin is we now don’t have to blindly trust. All cryptocurrencies are built on a decentralized network that is made up of each individual who owns any piece of the digital currency. There is no single point where an individual, organization, or government can manipulate the system for their gain.
We real estate investors already enjoy a hedge of protection that most other types of investments don’t. Theoretically, our property would go up in value at a similar rate to even out hyperinflation. We also have the added benefit of being able to utilize a property to provide basic needs if we reached a level of economic instability that took us back to bartering and trade.
Though, don’t relish the fact that the currency we use to purchase, invest, and improve our real estate is always teetering on the brink of a large-scale meltdown. A stable, decentralized currency will benefit all real estate investors and developers.
- Blockchain technology provides an easy way to transact money and data safely.
- Now, here’s where things get really interesting. The way the decentralized network of bitcoin works is on something called a blockchain. This is essentially a way of creating a transparent ledger that is next to impossible to fraudulently manipulate. When information is entered on this blockchain and spread out to a network of millions, tens of millions, or billions of people, hacking into and manipulating the data inside becomes extremely difficult. So you’ve basically created a very secure way to transfer money, data, etc.
In real estate, what types of data are important to transfer without risk of manipulation or fraud?
The amount of red tape, fees, and wasted time this type of network could eliminate is staggering. How many of you have lost deals, had deals massively delayed, purchased something that didn’t have a clear title, etc. Imagine being able to purchase a piece of property without needing a title company or title insurance, while feeling 100 percent confident you were buying exactly what you thought you were.
- Blockchain allows for smart contracts.
-
Yet another powerful tool blockchain allows us to harness is something called “smart contracts.” When data, a process, or workflow is entered on a blockchain, it becomes impossible to deviate from this agreed upon path. The real estate industry uses contracts all the time. Visualize with the world where you could spell out the terms of your purchase, sale, lease, on a smart contract and feel completely confident these terms would not be deviated from.
It’s happened more than once that a buyer has not performed on a contract and then has tried to hold up the earnest money that was now rightfully for months with stupid arguments and legal games. This could be a thing of the past. Deposits would be held inside the smart contracts and paid out exactly as the contract states. No deviation.
- This new technology could create transparency and immutable records of title
-
Once we as investors purchase a piece of real estate, there isn’t much worry that someone will dispute our ownership stake. Perhaps this won’t affect your business tomorrow, but the overall economic impact of smart contracts to keep accurate land records in developing countries is huge.
We would see third world countries making leaps into the modern age! What has taken decades or hundreds of years in other countries could be accomplished in just a few years by harnessing the power of blockchain and smart contracts.
- This is only the beginning
-
You could equate it to internet in the late 1990s. Nobody really knew what it was, how to use it, or what the long-term benefits would be. We all can agree on the critical role the internet now plays in our daily lives and businesses. We can also observe the career-defining effect it had on early adopters who took risks and began applying internet technology to different industries and businesses.
- Here’s what encourage you to do
-
First, do not go liquidate your real estate portfolio and dump it into cryptocurrency. But realize and accept you will undoubtedly hear the stories of the few who got lucky, took massive risk, and made insane returns overnight. Money quickly earned is usually quickly lost, and you probably won’t hear the stories of those who lost everything. The ratio of failure to success in this and in real estate is probably less than 10:1 or worse.
-
Second, don’t stick your head in the sand and pretend everything will go on as usual. The cat is out of the bag; there’s no going back. It’s time to get to work. This is the next area of real estate you need to become familiar with. From flipping to rentals, wholesaling to commercial, growth and change is never easy.
-
Third, unless you want to invest directly in companies developing blockchain applications for real estate, you do have some time; adoption of new technology takes years. However, the time to prepare, strategize, and plan is now.
If you are looking for a modern, uncomplicated, safe and hassle-free way to make your money grow, then Crowdfunding Place might be the investment solution you’ve been waiting for.
For more information, or to invest, please visit our website or call us on +44 203 642 41 74