How Bitcoin and crypto can revolutionize the housing market
Thursday 23 February 2023 at 11.14
While cryptocurrency like Bitcoin is too volatile an asset to be pre-emptively useful in completing real estate transactions, there are countless ways the technology can be applied to real estate purchases. Here are some ways crypto could change how he sees the future of real estate sales and how blockchain could be at the heart.
DOES CRYPTO HAVE A PLACE IN THE FUTURE OF REAL ESTATE TRANSACTIONS?
Yes, blockchain technology will significantly impact the real estate market, enabled by blockchain technology, smart contracts and web3 applications. Of course, the cryptocurrencies or tokens that underpin such ecosystems will play a central role in the UK property market, as they already do in many markets around the world.
IS THERE DEMAND FROM BUYERS?
The space is still in its initial stages, and due to the lack of regulation, it is not suitable for transactions for anyone outside the space. There are virtually no examples of on-chain property transactions at this stage outside of the metaverse. Bitcoin is (and will surely be when fully mined) a store of value – like digital gold – similar to actual gold today. An on-chain property transaction would be like exchanging for another asset such as company shares or a piece of art. These cases exist, but are blips and do not provide a basis for a future vision of real estate transactions in the chain.
WHAT ARE THE POTENTIAL BENEFITS?
Over the past five years, I have seen compelling cases for deeds moved into the blockchain via some kind of NFT protocol. A regulated crypto space can provide increased security and transparency as well as many efficiency gains and cost reductions for the transaction process. The tokenization of assets offers co- and micro-ownership benefits and facilitates access to the property ladder for younger generations. Common ownership (shared freehold or leasehold) structures can be managed via existing smart contract protocols and web3 ecosystems. This list of possible use cases can be extended ‘infinitely’.
WHAT ARE THE PARTS?
The current major disadvantage is the infancy of the space, the lack of openness; volatility and regulation are one element, but the complexity of the technology and the difficulty of assessing profits from fraudulent projects contribute to its current near-irrelevance to real-world real estate transactions. Blockchain technology can be compared to the internet revolution, the question is, are we in 1990 or 2000?
