Bitcoin is a decentralized currency that is used to send money instantly to anyone around the globe with negligible fees. It relies on blockchain technology, which provides a level of transparency and reliability needed to foster trust amongst bitcoin users. To learn more about the basics of bitcoin and blockchain, take a look at this video. Why is this relevant? Because bitcoin was just used to purchase a piece of US real estate.
According to this article, a Texas-based real estate brokerage has completed the first-ever sale of a real estate property in the US using bitcoin. According to the buyer’s agent, Sheryl Lowe, the transaction was surprisingly quick and easy compared to transactions which require a middleman to verify and disburse funds. What makes this possible?
Typically when a house is sold there is a third party such as an attorney or escrow company that facilitates payments to all parties. This third party will collect and verify funds before disbursing them. With the blockchain technology that bitcoin relies on, funds are automatically verified before the transaction goes through.
There is a historical issue with bitcoin which may still be deterring sellers from accepting it. Experts note that bitcoin has been historically volatile, and with the time it take to perform inspections, negotiate contract terms, and come to final agreements, the seller is at risk of the value of their future assets (bitcoins) dipping to an unacceptable low.
Even so, we expect the application of blockchain technology to continue to grow, making it more likely that cryptocurrencies will play a role in real estate transactions of the future. Would you buy or sell a piece of real estate using bitcoin? We’d love to hear your thoughts.