Bitcoin ‘to take real estate industry from 17th to 21st Century’
The Bitcoin virtual currency can provide major advances for the real estate industry and 2016 could be a breakthrough year for its use, a sector expert tells OPP.Today.
Bitcoin is a digital asset and a payment system. Bitcoins are created as a reward for payment processing work in which users offer their computing power to verify and record payments into a public ledger. This is called mining and miners are rewarded with transaction fees and new Bitcoins.
Bitcoins can also be exchanged for other currencies, products, and services, including real estate. Transactions are verified by network nodes and recorded in a public distributed ledger called the blockchain.
Ragnar Lifthrasir, a real estate financial and technology specialist and President of the International Bitcoin Real Estate Association, says the development of the Bitcoin blockchain in 2016 is set to provide improvements over traditional options to real estate record keeping.
The blockchain is a public ledger of all Bitcoin transactions, which is constantly growing as ‘completed’ blocks are added to it in a linear, chronological order. That way, Bitcoin wallets can calculate their spendable balance and new transactions can be verified to be spending Bitcoins that are actually owned by the spender.
OPP.Today asked Mr Lifthrasir how would the use of the Bitcoin blockchain boost the real estate sector and how much progress in this goal might happen during 2016.
He says, “Bitcoin is the greatest technological breakthrough for real estate since the wax seal 400 years ago. Using Bitcoin’s currency and blockchain will take real estate from the 17th to the 21st century.
“By using Bitcoin, we can reduce costs, stamp out fraud, speed up transactions, democratize investing, increase financial privacy, internationalize markets, reemphasize equity, and make real estate a liquid asset.
“I believe 2016 will be the year the real estate industry starts to integrate Bitcoin. Within the last month the membership of the International Bitcoin Real Estate Association has nearly doubled.
“We’ve reached the critical mass now, where we have enough real estate industry decision makers who will use Bitcoin technology in their deals, applications, and start-ups. Unlike the banking sector, real estate doesn’t face the regulatory hurdles to use Bitcoin. The technology is now mature enough. Everything is in place for adoption.”
The changes would bring major advantages for international real estate agents and developers, he says.
“International property agents and developers will benefit from Bitcoin adoption because it provides a borderless, non-proprietary platform for payment, escrow, and title recording.
“Real estate suffers from regional differences in how transactions are carried out. Bitcoin routes around this friction because it isn’t a national currency or a local government notary. Just as everyone accesses the same sun whatever their country of origin, so too can they access the Bitcoin platform for property transactions.”
The International Bitcoin Real Estate Association (IBREA), which aims to implement technology, build the community and set industry standards, has around 230 members throughout the world and Mr Lifthrasir says it offers considerable benefits to international property agents.
“All real estate professionals should consider joining the International Bitcoin Real Estate Association, especially those who are involved with cross-border transactions.
“By joining the IBREA, agents, developers, lenders, and investors can connect with others to use this transformative technology to reduce costs and delays, grow deal flow and decrease fraud and delays.”
Mr Lifthrasir claims it is easy for a criminal to create fake property ownership documents using digital manipulation software and false stamps. But the Bitcoin blockchain offers a better system for tracking property ownership records as it uses cryptography.
He is currently working alongside IBREA members on a title document plus property transfer app to streamline the property transfer process. The property transfer would be carried out using Bitcoin tokens – a coloured coin solution similar to the one NASDAQ uses.
IBREA is also keen to contact real estate professionals who want to use Bitcoins to buy, escrow, and record property transfers.