Faster, Cheaper, More Secure Transactions
Cryptocurrencies are powered by blockchain technology. In simple terms, a blockchain is a digitally distributed, decentralized, immutable, public ledger that exists across a network, where transactions are processed in real-time.
Furthermore, blockchain technology uses miners (or validators) to verify transactions, which creates a safe and tamper-proof verification process–functioning within an incentive model that encourages honest behavior and punishes bad actors for fraudulent behavior.
Moreover, the cost of processing transactions on the blockchain is usually much cheaper than traditional forms of payment processing. This is, in part, because there are no banking intermediaries positioned to pocket a percentage of each transaction. (However, it is worth noting that blockchain gas fees can prove to be very expensive at times of network congestion.)
The future possibilities for cryptocurrency and the blockchain in real-estate are extremely attractive: inspection costs, registrations, loan fees, and property taxes can all be reduced, as buyers and sellers connect in real-time and sidestep middlemen. Consider property settlement–when an owner pays the balance of the sale price and legally earns the ownership of a property–which usually takes between 30 and 90 days to achieve full execution. Blockchain (coupled with cryptocurrencies) can significantly speed up this process, reducing settlement time from months to hours in a way that is more secure and inexpensive.
Crypto/Property Use Cases Gather Momentum
In early 2021, Miami Mayor Francis Suarez put forward a proposition to allow citizens to pay all or part of their property taxes or city fees in crypto. And although the proposition was eventually dialed back from its original wording, Suarez continues to be a vocal advocate for his idea:
“I think we’re on the cusp of seeing a major titanic shift on this. It’s an industry that’s boisterous, vociferous, and growing, and this would send the right signal.”
Soon after the proposition by Suarez, the owner of a penthouse in an exclusive Miami Beach boutique condominium, sold the unit to an anonymous buyer for over $22 million in cryptocurrency. The deal attracted international attention. Later in 2021, a set of retail condos in New York City was sold exclusively in Bitcoin for around $29 million. And French DJ David Guetta has recently revealed that he would accept payments in Bitcoin and Ethereum for his $14 million luxury Setai Residences condominium.
While there is currently a modest demand for crypto payments in real estate, this will inevitably increase as crypto gains more mainstream adoption. Adam Redolfi, a member of Forbes Councils, an invitation-only organization, said:
“Today, I am seeing more and more sellers and developers accepting cryptocurrencies as a form of payment. Four years from now, I predict that blockchain-integrated real estate will be implemented on a whole new level beyond payments in a digital currency.”
