Cryptocurrencies have now been largely used in many sectors. Cryptos like Bitcoins and Ethereum are the most popular among them. The use of this kind of digital currency has brought about an overall change in the very major fields, especially in the real estate sector. Blockchain-based payments have been now made widely by consumers all over the world and we can point out that, the real estate sector is also gathering up its pace to rum along with this current blockchain trend.
The scepticism that first arose when something new emerged is present in this case also. People are very much sceptical about this use of blockchain in the real estate sector. In a way, this scepticism arises because people don’t want to move away from traditional or conventional ways. But blockchain technology will surely be flourished in the real estate industry just like smartphones wiped out the entire world.
The use of cryptocurrencies in the real estate industry
The first doubt that comes to our mind when we hear this question is whether we can buy real estate with cryptocurrency. The answer is yes. Of course, you can use cryptocurrencies to buy real estate which proves to be one of the safest and the efficient ways. The various steps involves in this process are discussed below:
- Direct transaction with the seller: Even though blockchain is used in real estate, there are still some sellers that stick on to cash modes. But you can also find many of them using Cryptos too. They have fully embraced this new technology. With blockchain, you can do the transactions directly with the sellers
- A third-party involvement: To convert Cryptos into cash, sometimes the seller seeks the help of third-party vendors. So there may come an involvement of the third party in the process because even if you are all good with the cryptocurrencies, you still need cash to pay for the government offices as part of a country’s real estate policies.
The working of cryptocurrency transactions
Bitcoin is only one of the 6,700 types of cryptocurrencies. The transactions made using each of these Cryptos slightly differ. So it is important to have a basic understanding of these changes and differences. A cryptocurrency has got its own unique set of codes and this information is stored within the blockchain.
This blockchain-based ledger transaction of a particular cryptocurrency will confirm the value of that particular currency, manages and records the transactions made using that type of crypto and will coordinate and facilitates the value conversions.
One of the important merits of blockchain technology is that it is one of the safest ways of transaction. As it is a decentralized system, there is no involvement of banks or other financial institutions, since it is a direct payment system.
How cryptocurrency changes the overall outlook of the real estate industry?
The use of Cryptos for real estate transactions brings forth many changes in the industry. When cryptocurrencies are there, there is an involvement of a virtual world. A metaverse platform is there in that virtual place. Just like people can buy acres of land in the real world, investors can buy parcels in the virtual arena. But just like in the real world, there is only a limited number of parcels in the virtual world. So when you buy a small parcel, you can sell that later when the value becomes high which will help you in selling it at a higher price just like we do with real-world properties. This is a kind of stock investment.
In the real world real estate industry, cryptocurrencies help in many ways. With the advent of cryptocurrencies, multiple individuals can buy a property with tokens and can co-own it. The tokenization divides the property into many tokens inside the blockchain allowing multiple ownerships. Owners can also easily sell their token or share of the property which in turn helps in the flourishing of the usage of cryptocurrencies in the real estate industry.
Even though using Cryptocurrencies seems an efficient way there are still some risks associated with it. The volatility of cryptocurrencies is one such issue. The price and the value change suddenly and drastically which sometimes becomes unpredictable.
Even though there are many positives in this coming together of both sectors, there are still many things that must be looked into.