Since its inception, cryptocurrency has gone from being a new tech fad to being a valid response to issues in cross-border transactions and a potentially safer way of managing finances. But, as cryptocurrency has moved on from Bitcoin to the rise of altcoins, it’s clear that the underlying blockchain technology is worth harnessing and can have a use for almost every industry. Some of the ways in which the blockchain has been trialled successfully already indicate that there is scope for it to grow in the property industry and that it would benefit everyone involved.
The first instance of crypto and blockchain being used in the property industry is the news that Baroness Michelle Mone of Mayfair (frequently seen on The Apprentice: You’re Fired) and Doug Barrowman would accept Bitcoin as a payment for their flats in Dubai. The £250 million residential scheme shows that the market appetite is there. If successful, the pair aim to implement this across the rest of their businesses. The flats go for 54-80 Bitcoins or $250,000 – $380,000. Co-living group The Collective are also permitting their residents to pay for their accommodation with digital currency. One benefit of the blockchain function is the traceability and the security of the payment, which may be more susceptible for other payments – especially for the apartments in the UAE, with the owners residing in the UK.
Another huge leap for cryptocurrency and the property market is the development of BrickCoin – so-called as it uses bricks and mortar real estate to ensure the currency isn’t as volatile as other digital coins can potentially be. BrickCoin shows promise as it would be a dedicated digital currency for the property market. The Real Estate Investment Trust (REITs) is working with fintech companies to try to find a way to implement the digital currency in the existing market. As cryptocurrency exchanges have proven already, it’s easy to make trades between one form of digital currency and the other, and some people even make a living out of anticipating market shifts to make a profit.
One of the biggest impacts of the blockchain technology is the ability to create smart contracts. Ethereum has already shown that this could work and that the demand is there to create an almost unbreakable contract. Blockchain smart contracts in the property industry look to improve property searches, speed up due diligence, result in smarter decision making, make leasing easier and bring easier cash flow management in the industry. By harnessing the safety and security of blockchain and the unique principles involved, smart contracts could bring the property industry into the 21st century and could mitigate against many issues that stem from the current practices in property management.
While for many the idea of paying in Bitcoin for a property seems farfetched, for those in the industry, it seems like the logical next step. Currencies across the world are tethered to the economies, which could be affected at any time. While cryptocurrency may be deemed volatile, it actually provides a greater universal benchmark, which could prove beneficial when it comes to property at home and abroad.