You might have thought about buying that coveted beach house one day. Or, save up enough money to buy that apartment with the awesome view of the city’s skyline from a skyscraper. In today’s world of cryptoasset transactions based on blockchain technology, some are making their dreams come true by exchanging their cryptoassets for real estate!
In October 2017, Michael Arrington, the founder of TechCrunch, bought an apartment in the Ukrainian market using an Ethereum “smart contract” which was the very first transaction of its kind.
Ethereum (ETH) is a public blockchain-based distributed computing and operation platform with the smart contract functionality. A smart contract is a cryptographic protocol that facilitates, enforces and monitors the execution of an agreement or contract precisely as programmed and immutable. Ethereum is, therefore, getting known as the blockchain that will ‘do for everything else what bitcoin did for money’.
Although cryptoassets have been called risky investments all the while, they are being re-established as alternative ways of paying for regular commodities more recently. Many merchants worldwide have started accepting Bitcoin. Microsoft and Dell being the big ones! A lot of stores and companies in Japan have started accepting bitcoin as payment for their products and services.
People can soon start using cryptoassets to pay for burgers at a drive-through! We have already witnessed a few real estate transactions over the blockchain in the past year, and it’s not as hard as we think. The most essential condition for you to buy a property with Ethereum is: the buyer and seller must agree on exchanging Ethereum for the property.
The first single-family home sale was in Texas, involving Bitcoin, in 2017. Some sites have made it easier to look for properties that we can buy via cryptoasset exchange.
Ethereum is a far better option for buying your dream home than bitcoin because it provides faster transaction time and lowers transaction fees as compared to bitcoin. Plus, it also provides the added benefit of the “smart contract” function, which opens up several additional possibilities for the real estate market to take advantage of. Ethereum might soon be used for most transactions. It depends on the number and importance of the companies that start trusting and using ETH.
All the same, as super cool the idea of a new virtual asset to purchase real estate and things of daily use can be, there is and will be initiated and even prolonged nervousness and doubt about the success of the asset to newcomers, especially in the light of the perceived risks involved.
Much concern might be regarding the lack of regulation or a governing body and the lack of understanding about how the gains in real estate through bitcoin are taxed by the tax authorities of each country.
Moreover, buying property with bitcoin might not be simple in every case, as experts point out. Even when the purchaser offering bitcoins for the purchase finds a seller who is willing to accept them, the next step of finding title insurance and escrow companies willing to comfortably handle transactions can be difficult when it comes to virtual currency.
But then again, if you want to buy a house with Ethereum, you can make it work. Ethereum has charted a risky but beautiful path to distinguish itself from other cryptoassets.
The Indian Context
It would take time for cryptoasset payments for property to be a reality in India. However, it is more likely that the real estate wizards will use blockchain technology to make the real estate sector more transparent and accessible to the common man.