Blockchain is the new change on the horizon. Although it is already in the financial world, the uses of blockchain are far more wide reaching. It is shaking up many sectors along with all industries including supply chain, corporate responsibility, fashion designing, and digital advertising. To accept Bitcoins, all the company needs is a Bitcoin button at the checkout and a digital wallet. It works like a cycle whereby the publishers and users receive tokens when they view the ads.
Real-estate sector transactions using Bitcoin
At its heart, Bitcoin is essentially a cryptocurrency. Blockchain backs this peer-to-peer payment system using networks. Blockchain is a digital ledger that distributes and stores information but produces no copies of it. It is a public ledger that every user, who keeps it updated, can share amongst them. The blockchain is the cutting edge technology that mines Bitcoins and other cryptocurrencies.
Offers greater cybersecurity
The fascinating thing about blockchain is that a set of blocks makes up the transaction history. These chain-like configuration is unchangeable. It takes a vast majority of participants to change the transaction history of the ledger. With the increasing number of people using blockchain, changing it is next to impossible. In the future, when there is a substantial mass adoption, it will be even more secure. Thus the unalterable nature of the transactions in the ledger offers greater cybersecurity.
Decentralised payment system
Users around the world employ tens of thousands of computers to manage the Bitcoin network. This digital ledger is decentralized which means every computer of the users records it. Unlike a physical bank, where transactions are stored and managed privately only by a bank, blockchain is outside of any central repository. There is no bank, authority, government, administrator or national treasury that sets any regulations on it. This phenomenon explains why hundreds of companies such as Victoria’s Secret and Subway accept Bitcoins as a form of payment.
Investing in Bitcoin
When Bitcoin came into being in 2009, it was worth one cent, and when it went mainstream in 2011, it rose to a dollar. That means that investors who converted government-backed currency into digital currencies in its first couple of years are now millionaires. These investors are currently looking to divest them into real estate properties and other assets.
Real estate industry
We are experiencing a significant shift in the real estate industry, as more and more people are engaging in property transactions using digital money. In cities like Los Angeles, Miami, and London, people purchase more expensive properties with Bitcoin. Stories abound of developers accepting Bitcoins for new projects in Dubai and New York.
Bitcoin price tag
Selling a house in England is getting harder with four in ten sellers reducing prices. Although London’s prime property market is in the midst of a downturn, one £17 million mansion has seen unprecedented interest from the young demographic because they could buy it in Bitcoin. Ever since dozens of media outlets including Reuters and Sky picked up the news of the sale, the owner has given over 50 interviews. Even news of much lesser value houses elsewhere in Britain had generated national headlines when a Bitcoin price tag was attached to them.
Advantages of Bitcoin
Other than free publicity for the houses, there are many benefits to Bitcoin property game. A Bitcoin transaction is cheaper as it cuts costs by eliminating third parties. The fee to process the transaction is only 1%, which is a requirement for Bitcoin transfers. Also, digital sales are compelling in international property markets because they are quick and in some cases even instantaneous. They remove the need for transfers between foreign banks and currency conversions, which can slow down the process by taking weeks or even months. Moreover, it is more transparent than the method for tracking fiat money as the firm just checks the legitimacy of the prospective Bitcoin buyers.
Virtually nil volatility
Buying property in Bitcoin essentially involves fixing the price in fiat money and then converting it to Bitcoin. But the property seller absorbs none of the volatility as long as they exchange it back to fiat money as soon as the transaction is complete. Among other benefits, it is also easier and more efficient than traditional currency from a technical perspective. Many industry experts are excited about the potential for digital money and blockchain when it comes to real estate. But although digital currency transaction is the future, insiders say that we are not quite there as yet.
Mass adoption obstacles
Bitcoin analysts are less convinced that the property market would more widely adopt the cryptocurrency. First, the mechanics to convert their cryptocurrency into fiat money is very limited. Second, the significant cost of processing Bitcoin on that scale likely makes doing so less appealing. But the biggest problem is the fact that Bitcoin and property appeal to different types of investors. Moreover, Bitcoin and other cryptocurrencies are highly volatile, but real estate is a much more stable asset. It will not see full mass adoption in the property market for as long as cryptocurrencies remain volatile.
All digital currencies
Cryptocurrency is a word that refers to all the digital currencies that use blockchain. Bitcoin is not the only cryptocurrency, but there are plenty of others to choose from including Litecoin, Peercoin, Digitalcoin, and Ripple. They are not physical cash or coins but rather virtual currencies stored in a digital wallet. It is more or less like a foreign currency whose value is still affected by demand and supply, world happenings, and government policy.
Connection between cryptocurrencies
As Bitcoin’s value skyrockets, stories about digital currencies have become dominant. There is a loose connection between all digital money, as a boost in Bitcoin typically means a spike in other currencies. In other words, when Bitcoin rises in value, there is usually a series of small rises in other currencies during the same period. Ether and other tokens will follow Bitcoin’s expansion pattern because most of Bitcoin’s milestones follow a continued growth trajectory. However, these fluctuations are not necessarily good predictors of future behavior. Crypto investors will be able to forecast how closely other currencies will follow Bitcoin with the completion of user metrics, awareness, and valuations. But caution should be exercised when investing, as they are exposed to low-likelihood risks and are more volatile than traditional stocks that could trigger a market crash and be devastating.
In the real estate blockchain enables to store authentic online documents, draw digital smart contracts, and keeps the identities of the parties anonymous. While all sounds great, for everything to work seamlessly, it still needs a lot of things. As traders and investors have bid up Bitcoin’s price higher and higher, the Securities and Exchange Commission has suspended trading of some firms. Investors need to be cautious and not chase small companies that are trying to ride the wave.