The Role of Cryptocurrency in the Real Estate Industry

12/09/2017

While to most it may seem like cryptocurrency is nothing to worry about it is having an effect on the market, currencies such as Bitcoin are gaining traction as an alternate way of holding your money. Before I get into how cryptocurrency is being used in real estate let’s explore what cryptocurrency actually is.

Cryptocurrency is a type of currency with no physical form, existing solely online and protected using encryption which keeps the money safe and allows it to be transferred. Bitcoin is the most commonly referred to cryptocurrency first appearing in 2009 the currency has gained popularity over the years because of the way it is managed. Cryptocurrency is not controlled by the government or banks which means that the money is never put through any banking systems or handled by the government meaning that the money is untraced and unaffected by inflation.

Cryptocurrency is legal in the UK and is being used more and more especially recently. The real estate industry is seeing an increase in the use of cryptocurrency with a London property developer allowing rental tenants to pay deposits with Bitcoin which is the first time ever that Bitcoin has been used in the real estate industry, for clarification 1 Bitcoin is worth 3246.13 GBP seeing a huge increase in value in 2017.

Bitcoins also exist in smaller increments similar to how we use pounds and pennies, Bitcoins have smaller increments called millibitcoins, microbitcoins and Satoshi’s (named after the creator of Bitcoin).

 

A start-up company is introducing a new cryptocurrency called ‘brickcoin’ and they intend to use the currency as a global alternate to real estate investment. Since cryptocurrency is not a physical currency it is immune to inflation through flooding the market with counterfeit currency, so countries with lower valued currency such as the Venezuelan bolivar, which is valued at 0.076 of a British pound, can keep their money secure from inflation. Your money can be exchanged for a brickcoin which represents a piece of real estate. For example, if you invest £100 for a piece of real estate in London the company will give you one brickcoin in return which will increase in monetary value as the real estate you purchased produces revenue. This venture is backed by the REIT (Real Estate Investment Trust) and the company (BrickCoin) plans to implement their currency over the next few years.

 

Cryptocurrency is a new and oft-times confusing idea, which many will be rightfully cautious to invest in, but there is a good chance that cryptocurrency will become more and more popular in the future with fewer people carrying physical coins and notes and instead opting for contactless and chip and pin. Will the real estate industry see an increase in the use of cryptocurrency? Or is it simply too complicated and unregulated?

 

If you’re unsure about cryptocurrency why not stick to traditional methods? AbbotFox estate agents is one of the leading estate agents in Norwich, producing consistently fantastic results because of our hard working team and unique approach to the industry.

 

abbotFox can be contacted via:

 

t: 01603 660000

e: info@abbotfox.co.uk

w: www.abbotfox.co.uk

 

or alternatively contact us on social media:

 

Twitter: @abbotFox

Facebook: abbotFox Estate Agents  

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