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Sensational titles and a strong inclination to technological language can make today's bitcoin and blockchain resources difficult to understand and, difficult to recognize, how they can be applied to real estate.
The session "Blockchain, Bitcoin & Robots in Real Estate", held at the REALTORS® This month's Conference & Expo, exposed the fundamentals of these highly controversial tools, raising some of the apprehensions that were weighing on the professionals who heard about this technology as disruptive to the real estate industry.
Bill Lublin, CEO of the Social Media Marketing Institute (SMMI), which prides itself on making complex things simple, started with the basics:
What is the cryptocurrency?
"Many digital resources are designed to function as money by using cryptography to ensure that transactions are secure and to control the creation of additional units of value and to verify the transfer of resources," said Lublin.
Essentially? It is a commodity that you can use to exchange funds or other raw materials: a barter system. For example, if you have a comic book collection, no intrinsic value is associated; however, comics can be valuable to other collectors and can be exchanged for cash, which can then be used to purchase another item or to pay for a service. Bitcoin and other cryptocurrencies can be traded with other commodities that accept this currency, or they can be exchanged for cash, which can then be used to buy a home, for example.
Right now, crypto-cryptographic transactions in real estate are not common. While the funds acquired as a result of bitcoin or other cryptocurrencies were used to buy a house, sellers did not accept cryptocurrency as a form of payment for their home.
What are the benefits?
- Anonymity and security
"There is no central bank regulation," said Lublin. "Right now, when you go to a bank and get over $ 10K, it's a relationship." With bitcoin, however, no one knows who's paying what. "
While it is safer for real estate purposes, this has led to illegal uses of cryptocurrency, such as participation in the dark network or extortion e-mails that are not traceable.
- Without frontiers
"Bitcoins can be transferred anywhere in the world," said Lublin. This is a significant entry point into real estate markets, as cryptocurrency owners can make transactions around the world, opening opportunities for blockchain-based real estate investments.
- Permanence of the record
"Once a transaction is recorded on the bitcoin blockchain, you can always go back and look at the record, but it can not be removed," Lublin said.
What are the disadvantages? Since it is more a commodity than a universally accepted currency with static monetary value, there is much volatility. Basically, it is similar to gambling at the casino because it is a highly speculative currency.
"Cryptocurrency has no intrinsic value, which is why there are peaks and valleys in its volatility," Lublin said. "It's a speculative asset and many people do not understand it."
So, what's the blockchain?
A myth that Lublin wants to dispel: Blockchain and cryptocurrency are one. False.
"When the bitcoin was released as an open source code in 2009, the blockchain was put together as the identical solution, but they are not the same," said Lublin.
Lublin said that blockchain is for bitcoin what the internet is by email.
"It's a system that you can create applications on, but most importantly, it's a distributed ledger," Lublin clarified. "Unlike today's centralized or decentralized services, where data is stored in one place, making it easier for hackers to attack, the distributed network can create smart contracts, which are programs that perform exactly what they are set by their creators ".
These contracts can be located on different computers connected to the network that communicate and coordinate their actions by sending messages to one another. They are applied by cryptographic mechanisms in the code, making them ultra-secure and, since they are a ledger for encrypted transactions, real estate transactions recorded on the blockchain would be much less susceptible to fraud and hacking.
For more information please visit www.nar.realtor.
Liz Dominguez is the associated content editor of RISMedia. Send your ideas for real estate news to [email protected]. For the last one news and real estate trends, bookmarked RISMedia.com.
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