On February 8, 2021, Elon Musk’s Tesla invested $1.5 billion into Bitcoin. This bold move speaks volumes about the long-term prospects of crypto’s future.
Aside from raising cryptocurrency to an all-time high, Musk’s move is a more recent indication that cryptocurrency is here for the long haul. While Bitcoin is just one of over 6,700, and counting, virtual currencies, the premiere cryptocurrency is a bellwether that indicates the direction of the virtual currency.
So, what does this mean for the New York City commercial real estate and New York City residential real estate sector? Well, this is a topic that we will delve into today. Fears about exploring new avenues for New York City real estate purchases and sales are a result of lacking accurate knowledge about crypto.
Here, we will explain how to ease the fears of parties involved in real estate transactions.
Teach Buyers and Sellers How Blockchain Works
When the anonymous programmer that goes by the name, Satoshi Nakamoto, devised the technology that powers cryptocurrency, it was with the intention of creating a secure and decentralized virtual currency that operates in the same fashion as cash.
Anyone that is fearful of crypto being secure only needs to understand that the Blockchain technology that powers cryptocurrency is the most secure encryption technology in the financial sector. So much, in fact, that there is no major financial institution that has not either researched or incorporated blockchain technology into its business model.
What makes blockchain technology so secure for real estate transactions? Blockchain is a ledger that is distributed across a network of thousands of servers. These servers are called nodes, and these nodes are responsible for adding entries—or blocks—needed to complete transactions in the blockchain.
With each transaction using the blockchain being splintered between a decentralized global network, the level of encryption is highly effective, that it is nearly impossible to trace the parties involved in any single transaction. With this level of cryptography, cryptocurrencies are clearly a safe means of exchange for real estate transactions.
Let Them Know About the Major Players
Obviously, the investment made by Tesla was the most significant in the history of Bitcoin; there are many major players involved in the proliferation of cryptocurrency. Informing buyers and sellers about the confidence that trusted economists and investors have placed in crypto is a surefire selling point for real estate investors.
Both VISA and MasterCard are the two biggest providers of credit and debit cards. These global financial networks entering into the crypto-sphere is proof positive that the economic sector has embraced crypto as a viable long-term alternative for fiat currency. Crypto debit and credit cards operate in the same manner as traditional cards, with the only difference being that goods and services are paid for using cryptocurrency.
Among many other investors, the Winklevoss twins, best known for their feud with Facebook CEO Mark Zuckerberg for their dispute regarding the creation of the social media network. The twins are thought to be the first Bitcoin billionaires. In June of 2020, their 100,000 coins were valued at $950 million. The twins are also heavily invested in the Ethereum cryptocurrency (the second most prominent virtual currency).
Telling stories like these to sellers and buyers will help to paint the picture of how respected and trusted crypto has become. Millions of dollars in transactions are made using crypto every day. Making this point clear will help ease the mind of parties involved in a real estate deal.
Explain How Crypto is Used in the Process of Purchasing Property
The power and adaptability of Blockchain technology have a variety of implications and applications in relation to real estate. There are escrow services that specialize in closing deals with cryptocurrency, and these companies may be the best choice for a seamless process.
In regards to using crypto as the medium of exchange for real estate purchases, this is as simple as the buyer and seller mutually agreeing to use crypto to close the deal. The price is based on the fiat currency price—due to the fluctuation of crypto values—and the corresponding value in crypto is used to complete the transaction.
Another great perk of using crypto to close on real estate deals is the fact that using crypto eliminates many of the fees typically associated with closing.
There are over 10,000 retailers worldwide that accept cryptocurrency; this is a testament to how trusted this fiat alternative has become. If you are seeking to convince another party to trust crypto to close your next deal, there are more than enough talking points outlined here to make your case. Be sure to present plenty of data and references to solidify your position.