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Buying a house with Bitcoin

January 16, 2018

 

Disclosure: I own a variety of cryptocurrencies and… I'm pretty happy about it.

Often, bitcoin (the most popular of cryptocurrencies) is associated with silk road- a website used to purchase things that are/were illegal- but bitcoin was originally a response to the crash of 2008. Tech enthusiasts were convinced they could create a 'self-accounting system' with computers that could rival the federal reserve… and it's looking like they did.

Like with any currency, each 'token' (coin, dollar, yen, peso, cadeca, etc) has a value in relation to another currency. For example, 4 yen (Japanese currency) are equal to 0.0091 dollar and 0.053 peso equals about 1 dollar at the moment. Well… 1 bitcoin equals 11,550 dollars or 9,250 euro currently.

Since bitcoin has risen from a value of way below 1 to each dollar, there's been a handful of early investors that made a ton of whatever currency they use without lifting a finger (other than tapping their keyboards and mouses). So, if there's a trend of money-makers in the bitcoin world, manufacturers can't help but wonder, 'Why don't we just start accepting bitcoin?'

Plenty of companies like Tesla, Expedia.com, T-Mobile Poland, Shopify and even Subway (in Buenos Aires) are now accepting bitcoin for their products. One can go so far as to infer that they are accepting bitcoin because it might be a better investment in a currency than holding any other currency available at the moment… This might be why a home seller in LA suggested to his realtor to promote that they're accepting bitcoin for their 7+ million dollar listing. This is when it really gets interesting...

I've always been fascinated with real estate as the blood of our economy. If a currency outside of our countries economy is being used to sell the highest ticket product in our market we might start having trouble calculating the condition of our own economy, not to mention taxing on purchases and sales.

Here's a hypothetical example:

Let's say it became really cool and trendy to pay with things using euros instead of dollars. After a while, it became so cool that the value of the euro rose substantially and sellers started accepting euros for the purchase of their own house. How would the Federal Reserve, who's job is to track and account for every dollar spent and printed, account for the euros that are spent on american products? The simple answer is that it's out of the Federal Reserve's hands because it's just not theirs to account for…

But then couldn't there be a type of currency that the world could use… a 'universal currency' that does its own accounting without affiliating with any particular nation?

That's what cryptocurrencies do :)

 

And, not only that, but they do it so well that the algorithm used for this 'self-accounting' (Blockchain) can be used to make societies all over the world more efficient. It's even argued that this automated accounting is more efficient than the Federal Reserve… definitely not nearly as expensive!

Fighting against them, trying to tax them when it's not your market (which Trump is trying to do) and refusing to learn about them is just delaying the assistance that cryptocurrencies can provide for our world economy. Cryptocurrencies are mostly used for international purchases or transfers of value because they use neutral machines to do their accounting instead of banks with national ties that charge absurd fees at random.

At this point, I hope you can see why the majority of properties that are purchased with bitcoin are purchased internationally (from one country to another). A seller advertising that they accept bitcoin not only opens up the sale to a market of tech enthusiasts but also to international buyers who want to avoid the nameless, outrageous fees associated with converting currency for an international purchase.

And, in case you're wondering, I do accept bitcoin for my commission (if only escrow could handle it).

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