Impact of cryptocurrency on real estate industry guide, Crypto trading, Digital money tips
The Impact of Cryptocurrency on the Real Estate Industry
22 May 2023
There’s no slowing down for cryptocurrency. In recent years, the technology found its way into the real estate industry as well.
It’s hard to deny the huge potential of cryptocurrency. We’re maybe used to traditional processes but crypto is already revolutionizing the way we buy, sell, and invest in properties.
Whether you’re a buyer or a seller, it’s time to get familiar with the impact of cryptocurrency on the real estate industry. After all, the confidence in cryptocurrency is almost 100%. That said, let’s dive in and explore the world of crypto in the real estate industry.
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Cryptocurrency explained
What’s interesting about cryptocurrencies is that they’re not controlled by a central authority. Powered by blockchain technology, these digital currencies are everything that banks are not. Instead of thousands of documents and bank approvals, cryptocurrencies enable direct peer-to-peer transactions.
If you ever thought fees and intermediaries are unnecessary, your wish has finally come true. Cryptocurrencies have eliminated them. You can now send money anywhere in the world with minimal or no fees at all.
Not only do cryptocurrencies offer lower transaction costs, they’re also available to everyone. Unlike traditional payment systems that can be limited to geographical boundaries, you can complete cryptocurrency transactions with a stable internet connection only.
How crypto is reshaping the real estate industry
Some might think that this is just a temporary phase. However, it seems that cryptocurrencies aren’t just a stop along the way but a destination instead. They’re a viable alternative to the traditional payment method. Let’s see how the real estate industry can benefit from using cryptocurrencies.
Enhanced security and transparency
If there’s something that cryptocurrency brings to the table, it’s definitely enhanced security. We’re talking about money after all, so this definitely puts cryptocurrencies at an advantage.
With traditional finance systems, there’s always a risk of fraudulent activities. Cryptocurrencies, on the other hand, provide you with greater control of your funds. You get transparency but at the same time, you can maintain your privacy.
Let me give you an example. Let’s say you decide to purchase a property using cryptocurrencies. The transaction between you and the seller will be recorded on the blockchain, meaning it cannot be tampered with. This provides a level of security and trust in the real estate industry like never before.
Transactions with Ethereum’s smart contracts
Ethereum’s smart contracts have caught us all by surprise. Who would’ve thought there will be a time when intermediaries are no longer needed?
Many industries have already adopted smart contracts, as they provide a lot more benefits than the traditional system. They’ve truly surpassed our expectations. Buy ETH today, and get involved in the world of smart contracts.
Smart contracts are characterized by a self-executive nature which completely eliminates the need for a middleman. Now, you can engage in direct peer-to-peer transactions without being charged for additional costs, as well as not having to worry about signing thousands of documents.
To put it in a nutshell, smart contracts will ensure your transactions are more efficient, cost-saving, and accurate. Embracing smart contracts means embracing a future where all payment processes are automated.
Speedy transactions
When we think of advice on buying a house, we immediately assume that it’ll take time. Until now, we thought that that’s how things are supposed to be. But cryptocurrencies show us a different reality – one where real estate deals can be done within hours or even minutes.
Think about it. If there’s no intermediary and no complex documentation, there won’t be anything holding back the transaction, right? That’s exactly the reality cryptocurrencies bring to the world of real estate.
Bitcoin is the beast in the crypto world. But surprisingly enough it’s not at the top of the list of cryptocurrencies with the highest transaction speed. In fact, Ripple’s ledger settles a transaction in 3-5 seconds.
With such speed, the real estate industry can reach new efficiency heights. Both property buyers and sellers can quickly complete transactions, reducing the time and effort that would’ve been traditionally required.
Asset liquidation
Another process that is usually complicated but cryptocurrencies make it easy. If you’re a seller you know that asset liquidation can be time-consuming. Now, there’s a solution for this as well.
If you liquidate your assets through the blockchain ledger, you’ll find that this process can become more efficient – listing assets for sale and connecting directly with potential buyers. This is due to its decentralized nature, as well as the middleman-free power of smart contracts.
You’ll no longer have to deal with back-and-forth negotiations and paperwork. Instead, you’ll just communicate with the buyer directly. Additionally, smart contracts eliminate the need for intermediaries, further simplifying the asset liquidation process.
Save money on transactions
When it comes to buying or selling in real estate, it wouldn’t hurt to save up some money. That’s why cryptocurrencies are becoming popular in the real estate industry – they make it possible to save some money.
Wire transfers and credit cards are still preferred and widely used. However, cryptocurrencies are slowly but surely gaining popularity. Unlike traditional methods, where you’d have to pay high fees, cryptocurrency transactions will help you save these instead.
Let me give you an example. Let’s say that you’re planning on buying a property abroad and wire transfer is your payment method of choice. Firstly, the bank itself will charge you for the transaction. Secondly, you might encounter intermediary bank fees.
Guess what. By considering cryptocurrencies as an alternative payment method you can avoid these expenses. Not only that but you can also complete the transaction within minutes, without waiting in line at the bank or dealing with yet another paperwork.
Worldwide accessible real estate
Cryptocurrencies make properties available worldwide. No need to worry if barriers will stop you from purchasing your desired property. Cryptocurrency transactions are borderless. Whether you’re buying or selling, and regardless of your location, they allow you to complete transactions without worrying about traditional barriers.
If you’re in the market for buying or selling a property, then cryptocurrencies make it impossible to ignore the benefits they offer. There’s literally not a property you can’t consider. The real estate market is your oyster.
Cryptocurrency innovations in real estate
Besides cryptocurrencies, other growing technologies operating on blockchain, such as (DeFi) Decentralized Finance and (NFTs) Non-fungible tokens are reshaping the real estate industry. Let’s see how:
- (DeFi) Decentralized finance. As the name suggests, DeFi is all about decentralization. It promotes the use of smart contracts in real estate transactions, opening up new possibilities in the real estate world.
DeFi is also the technology behind decentralized lending platforms. If you ever find yourself in a situation where you’re not eligible for a bank loan, don’t fret – you can engage in peer-to-peer lending. Basically, you can secure a loan and your crypto will be considered as collateral.
- (NFTs) Non-fungible tokens. You’re probably surprised but NFTs can actually bring some pretty cool benefits in the real estate market trends. They make it possible to own just a fraction of a property, meaning you don’t have to have a huge pile of cash to purchase a property.
To put it simply, it’s like buying a piece of the property instead of the whole thing. Who knew that becoming an investor could be so easy? You can now start small and slowly but steadily build your real estate portfolio.
Challenges you might face
Cryptocurrencies are indeed popular. However, they’re still not the number one payment method, as credit cards continue to thrive. As there’s still quite room for adoption, some challenges might arise when using cryptocurrencies in the real estate industry.
- Volatile nature. As it turns out, volatility can be both a blessing and a curse. On one hand, it can present an opportunity for big gains in a small amount of time. On the other hand, it can lead to unexpected significant losses. That’s why in the world of cryptocurrencies, real estate investors with high tolerance tend to fare better.
- Lack of regulation. While the decentralized nature of cryptocurrencies is unmatched, it can expose you to some risks. Cryptocurrencies aren’t regulated and poor regulation opens a doorway for fraudulent activities.
- Poor adoption. Most of us have heard about cryptocurrencies and Bitcoin. However, many are still hesitant. It’s understandable, considering that cryptocurrencies are surrounded by unfamiliarity. We still have a long way to adoption but we’re definitely going there.
Shaping the future of real estate
The impact of cryptocurrency on the real estate industry is undeniable. With so many benefits cryptocurrencies have to offer, it’s a shame to be in the dark about their use in the real estate industry.
They do have their fair share of challenges but this is just a needle in a haystack when compared to the potential and benefits. Yes, we like to stay in our comfort zone. But what if there’s a whole different world of benefits across the traditional one?
Author bio
Makedonka Micajkova is a freelance content writer and translator, always bringing creativity and originality to the table. Being multilingual with professional proficiency in English, German and Spanish, it’s needless to say that languages are her biggest passion in life. She is also a skilled communicator, as a result of having three years of experience as a sales representative. You can find her on Linkedin.
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