Buying a house with Bitcoins?
News has leaped to the national press only a few weeks ago. In Ibiza, the owners of a luxurious eighteenth-century palace have put the property, worth 1850 Bitcoins, up for sale. Those interested in buying the property will only be able to pay through cryptocurrency.
The sellers assure that the use of this system is very beneficial for the real estate market since, in addition to ensuring its transparency, it allows for the elimination of intermediaries.
1850 Bitcoins: almost 26 million euros
The Bardaji Palace or Moreno Palace is the tallest private building in the old town of Ibiza and is located next to the cathedral. It has four floors and six bedrooms, a two-car garage, a service area, and two individual apartments. In total, it is 900 square meters. Last year the owner valued the property at 9.5 million euros. The change to cryptocurrency has almost tripled its value.
In recent weeks the value of Bitcoin has been growing until, on Monday December 11, it reached a value of 17,270 dollars, multiplying the price by almost 20 during the last year. The following day the amount dropped to 16,390 dollars, which meant a fall of half a percentage point.
If we take into account that currently a bitcoin is worth more than 14,000 euros, the price of the Ibizan palace is now almost 26 million. The decision to change the form of payment means that if the sale became effective these days, the owner would obtain much greater benefits than just a few months ago.
Dubai or Texas, places where houses can be bought with Bitcoins
Developers from all over the world are adding the medium of cryptocurrency to the sale of their buildings. In Texas, for example, the first purchase of a house using Bitcoins was made recently. The firm from Austin highlighted, above all, the speed with which the transaction was made.
Another case is that of Dubai. Two British developers have started the first large real estate project in the city which you can invest in using virtual currency. It is a 40-story residential tower that will be finished in just over two years. The price of the homes, in total 150, range from 30 to 85 Bitcoins.
Those responsible for this promotion claim that the cryptocurrency has already been established among the general public as a means of investment and payment.
Buying with cryptocurrencies has its advantages
The number of real estate transactions through cryptocurrencies has increased day after day due to the numerous advantages that they bring with them. The experts in the sector like Ragnar Lifthrasir, founder of International Blockchain Real Estate Association, are sure of their benefits: “While the traditional real estate sector is based on paper and involves many external factors, including brokers, escrow agents, and banks, blockchain allows people to transfer funds, titles of ownership, and data in a more equal way.”
Saving is one of the reasons why investments in real estate through Bitcoin have increased, but there are more. In the case of international sales, transactions are faster and more efficient since the process of currency conversion and transfers between foreign banks is eliminated.
Lifthrasir assures that another of the benefits of blockchain (an accounting book where the transactions made with cryptocurrencies are recorded) in the real estate sector is related to security. Fraud can be ended because “blockchain is permanent.”
The professor of computation sciences and codirector of the Initiative for Cryptocurrencies and Smart Contracts at Cornell University, Emin Gun Sirer, also believes that blockchain will allow for the end of counterfeits since the information included in it cannot be altered or eliminated. “Everything will be publicly visible and can never be modified,” he says.
The transparency of data also benefits the buyers. With blockchain technology, real estate agents can quickly identify those who are trusted, which means that the granting of a mortgage is simpler and faster.
These are legal contracts that are written in computer code. In traditional real estate transactions, the parties involved must personally sign the necessary physical documents in the purchase-sale process. Later they are sent by traditional mail or through email using scanned copies. In the case of intelligent contracts, the process is simplified and the risks associated with the manual handling and transfer of physical documents are reduced.
Once implanted and consolidated, the blockchain technology will help make real estate transactions faster and safer. As an example, Sweden was one of the first countries to use it for property registration.
After all these data, would you be willing to buy your home through Bitcoins?