The real estate industry is on the cutting edge of many issues. Bitcoins included. While the use of Bitcoins may not be mainstream yet, they are being seen throughout the industry and it's important to understand the risk and rewards that Bitcoins present.
What is a Bitcoin?
Originally introduced in 2009, the Bitcoin (BTC) is considered as a crypto currency. While not widely accepted (yet), the use of Bitcoins is becoming more widespread as many Bitcoin enthusiasts believe that Bitcoin is a government-proof currency (note that the IRS announced last year that it considers bitcoin as "personal property" for tax purposes) . Additionally, some banking authorities have a different perspective of the crypto currency as they believe that it can be a basis for criminal activity.
It's not a formal currency. Rather, Bitcoin is made through 'mining' which is a computer process and unregulated internet-based derivatives allow for the crypto currency to be traded online. Because Bitcoin is not regulated by any federal government or central bank, the majority of merchants will not accept the virtual currency. While the Bitcoin may not be common practice just yet, there are a growing number of real estate listings that are beginning to advertise that they accept the virtual currency.
A few countries are leading the way in Bitcoin acceptance. China is currently experiencing the largest exchange of Bitcoin while Japan and Europe are also seeing Bitcoin usage growing in popularity.
The Bitcoin Market
The Bitcoin currency market can be volatile and has already experienced many highs and lows. As an example, a single Bitcoin could have been purchased for $ 13.30 on January 1st, 2013. Then on December 4th, 2013 the Bitcoin could have been sold for $ 1,150! Not a bad return on investment. But many have not been that lucky with the Bitcoin market.
The Securities and Exchange Commission has been keeping an eye on the Bitcoin and issued a warning in May of 2014 that stated the following: "The rise of Bitcoin and other virtual and digital currencies creates new concerns for investors. – such as Bitcoin – has the potential to give rise both to frauds and high-risk investment opportunities. "
Many investors warn against investing in Bitcoins as it has great volatility and it is not considered as a functional currency. Because it has no intrinsic value, the Bitcoin is not a viable investment vehicle for most. For instance, a computer hacker can steal all of the Bitcoin currency from an owner. And, due to the price risk, many warn that the investment in Bitcoins should only be in small amounts, if any, so that a large swing in value will not adversely affect someone's livelihood.
A variety of online retailers are beginning to accept Bitcoin as an acceptable form of payment. Tesla.com is just one such business. In larger cities, some property management companies are also accepting Bitcoin as a form of rent payment for tenants with the advantage being that the currency can not bounce like a check can.
Buying Real Estate with Bitcoin
Home sellers are beginning to consider additional ways to market their homes and think outside the box when it comes to advertising. By listing a home for Bitcoin, sellers may be able to capitalize on the media hype and also expand their potential client base by allowing Bitcoin buyers to enter the mix. In 2014, a few Bitcoin transactions took place and, possibly the most notable, was a home near Lake Tahoe that sold for 2,749 Bitcoins. This equates to $ 1.6 million of real US currency. Companies are beginning to emerge that specialize in Bitcoins and real estate. One such company is Homes4Bitcoin. This website allows for homeowners and agents to list a property for Bitcoins. BitPremier is another website that specializes in Bitcoins.
While it's not yet feasible for escrow, title, insurance or property tax to be paid in Bitcoins, it may just one day be. BitPay is a company that was established to allow transactions utilizing bitcoin to easily take place. Similar to the PayPal concept, this company solely operates around the bitcoin currency and has an allotted timeframe for a transaction to be completed before the exchange rate has been recalculated since the Bitcoin exchange rate is constantly fluctuating.
It's not just real estate that you can buy with Bitcoin. Other high dollar items have also had some success when sold for Bitcoin. A small airplane and a luxury yacht are just a few of the many items that are seeing payment through Bitcoin as a currency.Exclusive to NAMASTE BITCOIN. Offer expires soon! Send, Receive, Trade and securely store bitcoins | Learn Bitcoin in One Hour!
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