The game changer is here. Cryptocurrencies are fast revolutionising the way we think about money. Libertarians are spruiking its decentralised and permissionless nature, while investors are getting richer at a rapid pace. But, what does cryptocurrency mean for property investing?
According to Nathan Birch, cryptocurrency has the potential to completely revolutionise the whole process.
We are in the dot.com era of cryptocurrencies.
When it comes to crypto, says Nathan, we are in the starting phase of a blockchain ordered era. Just like the dot.com era of the nineties, when the internet started to take off, the pre 2020s marks the beginning of a whole new system. It will change the way we operate in this society.
When the internet started, people thought it was just email, says Nathan. They couldn’t foresee how it would change the way we bank, collaborate, shop and consume.
So it is now for the blockchain.
Nathan says the blockchain is likely to revolutionise every part of technology just as the internet has revolutionised our daily lives.
He says, “There is a lot of tech that is being developed out there at the moment that we don’t know about.”
“There’s actually full communities being built on the blockchain where people can run sustainable, self-governing protocols.”
In other words, networks are being built around different cryptocurrencies that allow for members to freely exchange goods and services.
So, how will this new world of blockchain transactions affect the way we buy and sell property?
Smart contracts and title deeds.
Nathan says that one possible way cryptocurrency could change property transactions is in the form of new technology.
He says, to sell a property, a buyer and seller could create a smart contract that would record the transaction on the blockchain.
The buyer could send a certain amount of coins at an agreed value. The vendor would only be allowed to access this if they first put the title deed onto the blockchain. Thus, selling the property without the need for lawyers to get involved.
Nathan says a smart contract such as this would allow people to “settle a property without any intermediary, third parties attached.”
“This could potentially remove the need for lawyers, governments and all the government regulations in between.”
Changing our daily lives.
The blockchain economy is only one part of a future that will be quite different to what we are used to.
One part of this new era, says Nathan, will be the “internet of things”. This will mean a society where people live in smart houses and operate driverless cars.
In a smart house, the toaster could talk to the fridge. It could send it information about the last time it was used to determine that the householders are out of bread.
The fridge would then add bread to a shopping list, along with whatever other items are missing from within it. The appliances would then order the groceries for the householder.
The ability to make micropayments within this system could be an integral way that blockchains help to keep our technology running.
Other aspects could include the ways that A.I. is integrated into our daily lives and a decentralised internet that is based upon peer-to-peer networks.
Nathan says, a lot of people can’t grasp how all of this could happen. If we look back over the last 150 years, however, people used to feel the same way about electricity, sewerage systems and motor vehicles.
Crypto is picking up speed.
Crypto is becoming more and more popular as the days go by.
“There’s becoming a lot more billionaires out there on cryptospace and they are wanting to do business with other people,” says Nathan.
“If there was two people on eBay, it wouldn’t be that great of a network, but because there’s so many people and it’s become a part of our lives, it becomes a great place to trade in.”
As the years go by and more people join the network, Nathan says we are going to see a lot more technology evolve.
The birth of a decentralised economy.
One of the most revolutionary aspects of cryptocurrency is the fact that it is decentralised. It isn’t controlled or regulated by a central authority – in fact, it’s more of a grass roots thing. You could even say it is by the people, for the people.
“Decentralisation is possibly the biggest thing that could set humanity free and we’ve never had the technology or the ability to be able to do it.” It could allow for “free trade, free speech and free information to flow around.” Nathan says.
The blockchain is unhackable.
Another unique aspect of the blockchain is that it is secure.
“The blockchain is an unhackable, decentralised ledger,” says Nathan. You wouldn’t be able to lose a title deed once it is added onto the blockchain. “Once things get recorded on the blockchain you can’t remove them.”
This has the potential to prevent the problem of fraud – something that the banking system is currently under the spot light for.
It isn’t subject to inflation.
Decentralised currency can’t be inflated like centralised money can. There is a finite amount of cryptocurrency – Bitcoin only has 21 million coins. This enables them to retain value.
Fiat currencies, on the other hand, are subject to inflation because central banks have the ability to keep printing more. This inevitably reduces the currency’s value.
How it could supplement property investing.
For those finding it difficult to save for a deposit, cryptocurrencies could hold the answer.
“People are using crypto as a vehicle to build wealth,” says Nathan.
He says for those who only have $10,000 or $20,000 for a deposit, investing some of their money in crypto could enable them to raise much more within a quicker period than simply saving alone.
Nathan himself has been investing into crypto with the view to sell it and pay off some of his mortgages.
While he sees property as a vehicle with which to build wealth, he says that crypto could be an alternative vehicle for purchasing property now that the banking system has made it more difficult for many to get finance.
While Nathan himself is not a financial advisor, and urges anyone considering crypto to do due diligence first, he says there are financial advisors out there who can help.
There are also financial advisors who don’t know anything much about it. So it is worth finding someone who can prove they know what they are talking about.
Not only is crypto an investment vehicle, it also offers an income for those who mine it. Miners are those who invest their own computer power to maintain the network. In return, they can ‘mine’ the currency, which releases more coins into the economy.
Cryptocurrencies and the blockchain create opportunities for people to boost their wealth and use it to invest in properties, says Nathan. By using these new forms of currency to invest in hard assets, investors can exercise more control in setting themselves up financially.
Binvested now accepts cryptocurrencies as form of payment. As always, leading the way in the property market! Talk to us about how you can use cryptocurrencies to accelerate your property journey.
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