Using cryptocurrency in real estate investment

Cryptocurrency can be an ideal way to facilitate a transaction for a single-family home or even a highly specialized commercial building. To buy this kind of real estate, or any other for that matter, with Bitcoin or another cryptocurrency, you need a seller willing to accept your offer. Finding a seller isn’t your only issue: you may find someone willing to accept payment in Bitcoin, but you will also need to find a brokerage, title insurance company, and escrow provider willing to support a virtual transaction.

As the market becomes more comfortable with the idea of virtual currencies in real estate, finding both sellers and infrastructure should be theoretically easier. Additionally, it’s also likely the niche will develop around only a few currencies: it is very likely that the relationship between real estate and virtual currency will begin with Bitcoin and Litecoin.

Buyers will likely need to transfer their niche currencies into a more ‘mainstream’ currency for acceptance. It goes without saying that Bitcoin and Litecoin are well-established currencies with both name recognition and greater stability in market conditions, at least compared to the particularly volatile offerings. Given that real estate is a give-and-take transaction; neither sellers nor brokerages will be keen on currencies that could crash before they have a chance to cash in.convictions.

Blockchain benefits

The option to buy with cryptocurrency first and foremost relies on the real estate industry’s adoption of the block chain, and there’s a good chance this will happen sooner rather than later. At present, buyers and sellers rely on the synergy of the long list of professionals involved to make a transaction happen. The blockchain cuts out some of these intermediaries (namely, banks), and it has the potential to eliminate the costs of these roles without inherently risking the security of the transaction.

What is more, the blockchain can potentially make real estate a more liquid investment. For example, blockchain uses “smart contracts,” which are self-executing agreements based on the decentralized network and means eliminate the need for paper transactions and central authorities.

It’s only a matter of time before they move into adjacent industries. The blockchain serves real estate without risking the trust and security needed for such large transactions (both for investor’s peace of mind and to meet government and tax regulations).

Of course, there are issues with account security that could scare off traditional investors at least at first. Hacked wallets or a lost key threaten an entire transaction. A blockchain transaction is also irreversible unless the recipient agrees to return the funds in a new transaction. However, smart investors will ward this off both by taking the appropriate security measures, including both technological measures for protecting their wallets and in verifying the identities of buyers and funds, when possible.

You can buy real estate with bitcoin today

You can buy real estate with cryptocurrency, and many investors could soon see it as an opportunity to utilize the blockchain to improve the market as a whole. However, despite the benefits of using virtual currencies, we are still missing out on some of the tools and infrastructure needed for such large transactions that involve digital currency and physical property.