Cryptocurrency and The Real-Estate Market
2018 is revealing itself as the year for blockchain and cryptocurrency in the real-estate market. A massive adoption of these cryptos has been taking place as real-estate agencies adapt to the blockchain system.
In the past 6 months, according to the CoinMarketCap price listing, total cryptocurrency market cap has reached 600 Billion USD, attracting investors from all over the world.
Cryptocurrency & Blockchain
Cryptocurrency is a digital currency or digital asset, a medium of exchange without any dependency on banks to transact due to the platform it runs upon called blockchain ecosystem.
Blockchain is a distributed ledger that records every transaction in an open-source, allowing for secure peer to peer transactions, eliminating the need for third-parties like a bank or PayPal.
Buying with cryptos
Cryptocurrency is on its way to becoming a method of payment for regular everyday things; there are several gigantic markets accepting them at the moment, like Amazon for example, but also several small to medium online and local businesses. It is predicted that in about 10 years, more or less, we might be able to make use of cryptocurrency just like with fiduciary money.
It is not difficult to adapt to the use of cryptos, as it proposes faster services without the need for third-parties, running upon a highly secured platform. Attractive characteristics to any market, so much so, it has been getting markets curious enough to get started. Cryptocurrency breaks barriers opening doors to a much larger range of customers without all the fiduciary money bureaucracy, because it is not directly connected to a country.
It would be natural to believe that to buy with these digital coins may not be so easy, but in reality, the only thing needed at the moment – to pay in cryptocurrency – is the agreement of the seller, any seller, anywhere in the world. If the seller says yes, then you have a trade. No regulations. Same goes for buyers.
Digital coins and tokens are considered property, not currency, and for that reason, in many ountries, you do not pay taxes on it right away when you trade, buy or sell, until you turn those cryptos into FIAT currency like USD and EURO. But you must get acquainted with the law surrounding it according to the country where you may be transacting.
Cryptocurrency Generating Successful Investors
We have reached a place in time where we are purchasing homes, business, cars, and all sorts of properties with the digital currency. 10 years ago, a digital coin was probably thought of as nearly impossible even to exist nonetheless be used to buy a piece of real-estate, and it is currently fostering some real investors.
In 2009, back when Bitcoin first came out, it was thought of as an unacceptable concept for many, but those who chose to believe, at that time, were able to buy coins for $12 US, or even less a piece. Little did they know that those small investments were turning ordinary people into real millionaires.
“Cryptocurrency, Stocks, Real-Estate.
If you’re in your 20’s, you should be investing in those three in that order.
Do it right and you’ll easily be a millionaire by 30.”
– said Erik Finman 19, an early investor, a high-school drop-out who currently owns over 400 Bitcoins – and needless to say a millionaire.
Obviously, not everyone who chooses to invest in cryptocurrency and real estate has to be 19 nor will they all become millionaires, but the fact that in such little time the industry has fashioned such successful stories make it something worthy of the public’s attention.
Real-Estate meets Cryptos
Many coins and tokens came into existence specifically to become a real-estate-market, like WINCO (WCO) for example.
WINCO is a crypto that uses the best in technology allied to projects and businesses in the non-digital world. Their company focuses on bringing in these non-digital businesses into the cryptocurrency world, creating uses for the coin, generating demand and liquidity. Investing in the use of cryptocurrency by bringing in large and medium revenue companies will organically make a way for smaller companies.
Cryptocurrency acceptance in the Real-Estate Market around the globe
The US government, as most countries around the globe, recognizes cryptocurrencies as property, not currency. The IRS treats swaps and tradings as taxable unless it falls under the1031 exchange law, meant for real-estate only, for like-kind exchanges.
“In the U.S., the IRS stated they consider it property, and every transaction needs to be calculated as a capital gains tax,” says Jake Bryan, bitcoin consultant. “There are services out there to simplify the process — I recommend Node40’s blockchain accounting tax service.”
The IRS will officially announce if cryptocurrency falls under that category or not only by the end of the year (2018).
In America, there are several real-estate agencies accepting cryptocurrencies like Blooming Sky (NY), Magnum Real Estate Group (NY), Sand Key Realty (FL), Brown Harris Steven Residential Sales/One Sotheby’s International Realty, & Kuper Sotheby’s International Realty (TX).
A Real estate in Canada selling luxury properties all around the globe:
“Real estate developers, brokers and sales representatives must fulfill specific obligations under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and associated regulations to help combat money laundering and terrorist financing in Canada. These obligations include establishing a compliance program, client identification, record keeping, ongoing monitoring of business relationships, and reporting certain types of transactions to FINTRAC,” says Jamela Austria, a spokesperson for FinTRAC.
The UK has already taken some measurements to protect their customers from the fluctuation of cryptocurrencies rates.
“We have designed a contract to protect both the buyer and seller from fluctuations in the exchange rate. The Land Registry agreed in principle that the price could be recorded in Bitcoin, but the buyer may well choose to use pounds, simply because calculating any capital gains tax may prove very complicated.” Says Solicitor Adrian Toulson, director of risk at law firm Breeze and Wyles, was involved in the ground-breaking conveyancing.
Bali, Indonesia may not come to mind as a country deeply involved with cryptocurrencies, yet Bali was one of the first places to embrace cryptocurrency real-estate, even though there is not much listed, there has been an investment of 800 bitcoins for a Villa in Bali.
Mr. Piso a real-estate agency in Spain fully embracing cryptos has sold a property for 40 Bitcoins and are currently open to continue selling in cryptocurrencies.
Why is the Real-Estate Market so attracted to Cryptocurrencies?
• Because it is a market working with billions.
• Offers eminent security and peer to peer transactions.
• Optimized property verification of information, updates, with decentralized records.
• Digital transactions with less paperwork.
• Faster transfer of values and titles.
• Less middle-men.
• When problems and issues arise, they would be seen right up-front in the blockchain system.
• Creates trust.
• Reduced expenses and fees.
• Everything sums up to a better customer experience.
Here are some tips shared with CNBC by Tony Giordano, a Real-Estate agent currently working with cryptocurrencies:
1. First, research: YouTube videos can be very helpful with this.
2. Understand: No matter what people call it, cryptos are a real currency which you can buy or sell with or trade per se.
3. Hire an Expert: Make sure that the agent you are hiring is very familiar with cryptocurrencies, how to operate them and how to best protect yourself, whether buyer or seller, from fraud since this is still an unregulated market.
4. Practice/Learn: There’s nothing better than learning it by doing it, and with cryptocurrency, it is no different. Download an app like Coinbase, learn how to buy and then sell again into whichever fiat currency you desire. Also, search for a list of cryptocurrency vocabulary on Google, become acquainted with the terms of the market.
5. Keep up with the market: stay tuned to websites like worldcoinindex.com, where they present main currencies price listings and charts.
Tips have been readjusted to fit this article, you may see the original interview at CNBC.
The Real-Estate market is the only industry not available on e-commerce yet and merging it with cryptocurrency blockchain is a game changer. When a market is not very secure, processing always takes too long, with extremely expensive fees. All sorts of frauds could genuinely benefit from the security, speed, and efficiency of blockchain, and with that eventually, establish a liquid online market through a cryptocurrency blockchain ecosystem. It’s the next step the Real-Estate Market was waiting for.