Bitcoin is getting a great deal of press recently, mainly due to the substantial growth in value of bitcoins within the previous 12 months. Lots of men and women are considering Bitcoin as potential alternative investment strategies and this article will discuss whether or not you can use Bitcoin to sell or purchase a property.
There was recently a story of somebody who was selling their home in Western Australia, and they were only accepting Bitcoins as the form of payment for the home. This is quite possibly a first in Australia’s real estate market.
So, it raises the question, can you purchase or lease a property with Bitcoin and if so, how do you go about doing this?
What is Bitcoin?
Bitcoin is a decentralised electronic currency also referred to as a cryptocurrency and it’s created online and it was made using software.
Bitcoin is made in such a way that you don’t need banks to hold cash and you do not have to go through a central system to transfer currency. It is decentralised so that you can send money directly from one person to another with little or no fees.
The more bitcoins created, the harder it is to create new ones. This helps to stabilise the currency and be sure that there’s no one person who can say “well I will devote an influx of bitcoins to the industry.”
There is over one billion dollars of Bitcoin currency in the market right now. So, there are a whole lot of different exchanges on the market. We can exchange money for Bitcoins or bitcoins to your regional currency.
The risk associated with Bitcoin
Probably the most obvious danger of investing in cryptocurrency is the varying exchange rates of Bitcoin. Bitcoin’s exchange rate was relatively stable in its early days but in the past twelve months there has been a dramatic change. The value of Bitcoins increased from $10 per Bitcoin to more than $200 per Bitcoin. You can use a cryptocurrency calculator to calculate the current value of Bitcoins against the Australian dollar.
However, it is not all happy days, it’s not always going up, there have been cases where bitcoin has dropped dramatically in value. One of these instances was when China actually closed down lots of the trades of a bitcoin and overnight the exchange rate almost halved.
In recent times, there was a robbery of bitcoins worth $470 million. Someone came and clearly robbed all these bitcoins in huge quantities and all that information on this is blowing up on the net right now.
There was also a story of a man who threw out a hard drive a few years ago and has since realised that because of Bitcoin’s increased value, the value of Bitcoins on that hard drive would be approximately $14 million. So, if you are storing Bitcoin in your computer or your hard drive don’t throw them out.
And lastly, you have got probability of hackers. There have been cases where online hackers have targeted online currency exchanges. So, there is a risk that when you are making or receiving a payment, you are at risk. Furthermore, a cryptocurrency wallet, which is a program required for the exchange of currency may be at risk also.
Why sell or buy property with Bitcoin?
Many people do not know about or understand cryptocurrency yet so the idea of buying or selling property with Bitcoin will likely cause a media stir. Property agents can use this a marketing strategy for properties, getting media attention and attracting buyers wanting to be involved with something new and exciting. On the other hand, many would prefer to purchase property the old-fashion way – with regular money.
Consider it in your own life, if you are flicking through realestate.com.au and you find a property you like but it is only available with cryptocurrency, you are most likely going to be turned off. Many people today are not yet familiar with cryptocurrency and because of this they don’t trust it. Although Bitcoins are becoming increasingly popular, they are not yet a mainstream form of currency exchange and as a result most people do not feel comfortable with the idea.
Next time you see an office building for sale, see whether cryptocurrency is a valid form of payment, it may not be now but in the next few years cryptocurrency may become the main form of currency exchange.