{"id":3188,"date":"2017-10-27T08:26:48","date_gmt":"2017-10-27T12:26:48","guid":{"rendered":"http:\/\/dankrell.com\/blog\/?p=3188"},"modified":"2020-01-26T09:07:09","modified_gmt":"2020-01-26T14:07:09","slug":"blockchain-bitcoin-real-estate","status":"publish","type":"post","link":"https:\/\/dankrell.com\/blog\/2017\/10\/27\/blockchain-bitcoin-real-estate\/","title":{"rendered":"Blockchain, Bitcoin and real estate"},"content":{"rendered":"
\"blockchain\"<\/a>
How will blockchain help the real estate transaction? (infographic from floridarealtors.org)<\/figcaption><\/figure>\n

Is a Bitcoin mortgage in your future?\u00a0 Probably not.\u00a0 Mortgages will not be in Bitcoin in the near future.\u00a0 But that doesn\u2019t mean that the blockchain technology <\/a>that underlies cryptocurrency won\u2019t be making the real estate transaction cheaper and more efficient.<\/p>\n

Brad Finkelstein reported<\/a> on the difficulties of a Bitcoin mortgage (Virtually No Chance Soon for Any Bitcoin Denominated Mortgages; National Mortgage News<\/em>, 2014).\u00a0 Cryptocurrencies have a history of volatility, Bitcoin most recently lost about a third of its value (see: Bitcoin at crossroads after shedding more than $27 billion in value<\/a>; marketwatch.com<\/em>; September 14, 2017).\u00a0 Instability of the currency is a major issue for a thirty-year mortgage.\u00a0 Finkelstein stated that such short-term losses could cause the mortgage holder to \u201close their shorts,\u201d and cause the borrower to default.\u00a0 He also pointed out that regulatory hurdles will be difficult to transcend, stating that mortgage rules and closing disclosures are calculated in dollars.\u00a0 Not to mention the difficulty of appraising a home\u2019s value in Bitcoin.\u00a0 Additionally, all parties that are part of the transaction (such as appraisers) need to accept payment in Bitcoin.<\/p>\n

Finkelstein also pointed out other cryptocurrency flaws.\u00a0 Unlike currencies such as the euro or yen, cryptocurrencies are not backed by a government that guarantee an exchange rate.\u00a0 Because of the lack of government backing, cryptocurrency values are easily manipulated.\u00a0 Cryptocurrencies have also been associated with illicit internet transactions.<\/p>\n

Although cryptocurrency mortgages may not be feasible, Finkelstein noted that \u201ccash\u201d transactions conducted in Bitcoin is a possibility.\u00a0 Luke Stangel reported on a Miami mansion recently listed for sale in Bitcoin (Brother, Can You Spare a Bitcoin? Miami Mansion Is Listed for About 1,400 Bitcoins<\/a>; realtor.com<\/em>; September 6, 2017).\u00a0 Two real estate agents interviewed about the sale stated that some aspects of the transaction may still be traditional, such as an escrow being deposited as well as title transfer.\u00a0 However, the transferred funds would be Bitcoin.<\/p>\n

Stengel\u2019s report suggested that the interest in conducting real estate deals in cryptocurrencies is to speed up the sales process and provide a secure transaction<\/a>.\u00a0 However, because of the associated processes that occur during a transaction, the timing of such a transaction may not differ much from any other cash transaction.\u00a0 Security is another issue and can be debated as Bitcoin and other cryptocurrencies have had their share of hacking too.<\/p>\n

With so many issues and hurdles, cryptocurrency on its own may not be the (immediate) future of real estate.\u00a0 However, its underlying technology<\/a> is of interest.\u00a0 The technology that makes Bitcoin and other cryptocurrencies possible is called blockchain.<\/p>\n

Blockchain technology has the potential to revolutionize <\/a>the real estate transaction by reducing the time and cost needed for processing a mortgage and title.\u00a0 Blockchain technology is essentially a chain of blocks.\u00a0 Each block records and holds information.\u00a0 When a block is recorded, it is encrypted and cannot be changed.\u00a0 The recorded information can be currency (such as a Bitcoin transaction), records, contracts, etc.\u00a0 The draw to blockchain is that it is decentralized, making it difficult to corrupt and easy to restore.\u00a0 Additionally, retrieving information is much faster because the chain of information is essentially available at your fingertips.<\/p>\n

Many are skeptical of blockchain technology.\u00a0 Not so much because of its disruptive potential, but because it is not impervious to problems.\u00a0 Some issues include security, cost and complexity.\u00a0\u00a0 A revealing critique of blockchain was written by Jason Bloomberg (Eight Reasons To Be Skeptical <\/a>About Blockchain; forbes.com; May 31, 2017).<\/p>\n

However, blockchain advocates <\/a>still maintain that the technology provides ease of access and secure recording of blocks of information.\u00a0 The touted benefits are claimed to decrease the time of the average real estate transaction, and reduce the cost to the consumer as well.<\/p>\n

Original published at https:\/\/dankrell.com<\/p>\n

Copyright\u00a9 Dan Krell
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\nDisclaimer<\/a>. This article is not intended to provide nor should it be relied upon for legal and financial advice. Readers should not rely solely on the information contained herein, as it does not purport to be comprehensive or render specific advice. Readers should consult with an attorney regarding local real estate laws and customs as they vary by state and jurisdiction. Using this article without permission is a violation of copyright laws.<\/p>\n","protected":false},"excerpt":{"rendered":"

Is a Bitcoin mortgage in your future?\u00a0 Probably not.\u00a0 Mortgages will not be in Bitcoin in the near future.\u00a0 But that doesn\u2019t mean that the blockchain technology that underlies cryptocurrency won\u2019t be making the real estate transaction cheaper and more efficient. Brad Finkelstein reported on the difficulties of a Bitcoin mortgage (Virtually No Chance Soon … <\/p>\n

Continue reading “Blockchain, Bitcoin and real estate”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[1076,1012,55,13,680,52],"tags":[1078,1077,511,821,797,997,725,457],"class_list":["post-3188","post","type-post","status-publish","format-standard","hentry","category-blockchain","category-home-buying","category-mortgage","category-real-estate","category-technology","category-title-insurance","tag-bitcoin","tag-blockchain","tag-home-buying-process","tag-mortgage","tag-real-estate","tag-technology","tag-title-company","tag-title-insurance-2"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p1VZLf-Pq","jetpack-related-posts":[],"jetpack_sharing_enabled":true,"jetpack_likes_enabled":true,"_links":{"self":[{"href":"https:\/\/dankrell.com\/blog\/wp-json\/wp\/v2\/posts\/3188","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dankrell.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dankrell.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dankrell.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/dankrell.com\/blog\/wp-json\/wp\/v2\/comments?post=3188"}],"version-history":[{"count":14,"href":"https:\/\/dankrell.com\/blog\/wp-json\/wp\/v2\/posts\/3188\/revisions"}],"predecessor-version":[{"id":5937,"href":"https:\/\/dankrell.com\/blog\/wp-json\/wp\/v2\/posts\/3188\/revisions\/5937"}],"wp:attachment":[{"href":"https:\/\/dankrell.com\/blog\/wp-json\/wp\/v2\/media?parent=3188"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dankrell.com\/blog\/wp-json\/wp\/v2\/categories?post=3188"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dankrell.com\/blog\/wp-json\/wp\/v2\/tags?post=3188"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}