After many years of perseverance, cryptocurrency is now starting to be considered a viable way to pay for real estate.
In 2014, a title insurance company made waves by being one of the first companies in the United States to announce that they would accept Bitcoin as currency for the purchase of real estate. Since then, many real estate brokers and even individual sellers have announced that they too will accept this new and potentially more secure method of paying for a home.
What is Cryptocurrency?
For those who do not know, cryptocurrency is a term for various digital currency options available to the average person. Perhaps most famous (or infamous) of the cryptocurrencies is Bitcoin. Though initially ridiculed as a concept, Bitcoin has gained a growing faction of followers since the devastating value crash in 2014 due to poor management and rudimentary security. However, with increased management and security introduced people now are considering Bitcoin a valid enough currency not only to be used for purchases, but to be used in major purchases (such as in real estate) as a safer alternative to analog currency.
How does Bitcoin work?
To understand the reasoning behind this change, one must understand at least in part the way Bitcoin works. Simply put, it is a digital currency regulated not by a bank, but by users known as “data miners.” Each transaction is recorded in Blockchain, where these data miners use complex computer-generated equations to verify the legitimacy of transactions made, and to generate more Bitcoins to feed the market. The mining process prevents fraud, and though hacking is still a legitimate threat to those who use cryptocurrencies, there are many ways to ensure safe transactions that are fairly simple to execute.
Why is the real estate market considering Bitcoin viable, or even more viable than analog currency?
The blockchain technology that fuels cryptocurrency provides an excellent, streamlined history of property transactions. Title insurance is prone to being a target of fraud. Companies could save billions of dollars by recording property titles in blockchain. While property titles may be forged with image-editing technology, the same is not true for the complicated encryption protection offered by this new technological option.
Overall, it is likely that blockchain technology will soon be more widely used in the real estate world. In a world where technology is advancing, so too is cybersecurity and its validity. Though some scoffed at the idea of self-distributing, publicly policed cryptocurrency when it was first introduced, many now are considering it something of a gateway into the future of all transactions, real estate and title insurance companies included.
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