I have asked, and been asked what cryptocurrency is, what can you purchase with it or is it just for investors. Most people know the most popular cryptocurrency which is Bitcoin but there are many different types.
The definition of cryptocurrency is: “A digital asset designed to work as a medium of exchange that uses cryptography to secure its transactions, to control the creation of additional units, and to verify the transfer of assets.” So basically it is like cash but digital. The problem with cryptocurrencies is that most retail and restaurants don’t accept it and to exchange it for cash it could take a little time to convert. So the answer to the question, can you make purchases with it, is that it is very limited for everyday consumers.
Transactions for cryptocurrencies work through a technology called Blockchain “The blockchain is an incorruptible digital ledger of economic transactions that can be programmed to record not just financial transactions but virtually everything of value.” This technology could work well in real estate transactions. IT would keep all the vital information needed to make deals secured and verified in the digital ledger of blockchain. With this new technology the sale of property could go much faster, which is great for investors and developers. We don’t see a lot of deals being made with cryptocurrency right now but in 2018 you will see a increase in the United States.
There is about 24 types of cryptocurrencies for real estate that I found. You can find up-to-date info at CryptoSlate (https://cryptoslate.com/news/). I am sure that we will see more types of companies offering new forms of cryptocurrency for real estate and other transactions. My head is spinning with all the information needed to understand how this all works. My thoughts are, why do we need a new type of currency, cash cannot be hacked and is tangible. I guess I’m showing my age with my belief “CASH IS KING.”
Rick Kaplan is the event coordinator at the New England Real Estate Journal, Norwell, Mass.