We’ve been watching the steady emergence of blockchain for real estate applications. Blockchain, which was introduced to the world through Bitcoin in 2009, is here to stay. How can we say so? It’s increasingly viewed as a change agent in the way business is done.
Luxury Portfolio International now finds cryptocurrency closing in on gold as the most sought-after store of value among the world’s affluent people. The finding is based on a survey of more than 3,000 respondents, as noted in the firm’s report State of Luxury Real Estate 2021: Finances of the Luxury Home Buyer.
Well over half of luxury home buyers believe in investing in a backup asset other than cash. Gold and now cryptocurrencies are their assets of choice.
The Blimp Homes app brings real estate sellers and seekers together
with agents. And with Blimp, there’s something more. Together with the Home
Network Foundation (homefoundation.io), Blimp Homes has introduced an industry
first: a home search platform is designed to be decentralized, user-focused and
transparent. It’s built on the HOME Protocol — on blockchain.
Real estate agents are being assigned cryptographic assets
called HOME tokens when they sign up with the Home Network. Buyers and sellers will
soon be earning HOME tokens on the Ethereum blockchain when working with others
on the Blimp platform.
U.S. real estate is the starting point. The network has
plans to expand to cover all of North America, and then go further.
New York City’s Department of Finance is trying out
blockchain. Can the technology make recording and keeping deeds a better
process? The test run, handled by Medici Land Governance (MLG), will find out
whether the method will work in a massive city, the company stated
in August 2021. MLG is owned by Overstock.com — an early adopter of blockchain
in the retail sphere. Its blockchain recording system is proven to be tamper-resistant
and easily searched.
United Wholesale Mortgage wants to take payments in cryptocurrency by late 2021. The point? To be the first mortgage company to take the plunge. “I’m not going to sit here and wait for everyone else to do it and then follow,” CEO Mat Ishbia told Julie Hyman for Yahoo Finance.
The CEO first broke the news on its second-quarter earnings
call in August, mentioning Bitcoin and Ethereum as top currency candidates.
UWM’s core business involves underwriting loans for mortgage
brokers. Nearly a million homeowners send money to UWM every month, and many of
them make their monthly payments through the company’s website.
In debates over a 2021 infrastructure bill, blockchain tax is contested ground. Cryptocurrency proponents are keen on keeping the crypto mining and development communities in the United States. Heavy regulations and taxes could run the risk of tossing the baby out with the bathwater, they warn. Overbroad taxation could suppress the evolving blockchain technology that supports smart contracts.
The issue matters to the world of titles and mortgages.
Here, we note some evolving use cases for blockchain — especially in the mortgage
In recent real estate industry news, Rick Caruso committed to cryptocurrency. Caruso is the owner of the Rosewood Miramar Beach in Montecito, California. Cryptocurrency is now accepted at Caruso’s shops, where customers may earn bitcoin to spend at the resort — or to pay rent at the company’s luxury apartments.
Yes, bitcoin will be the coin of the realm at Caruso rental properties. Not far from Hollywood are The Luxury Apartments, above The Americana at Brand. Here, renters will send payments through their digital wallets on the Gemini blockchain platform.
July, 2021 — Real
estate has long functioned as a store of equity value that owners can exchange for
money, loans and lines of credit. Yet the typical real estate transaction is associated
with a cumbersome, bureaucratic, and fee-heavy process that every homeowner is
greatly relieved to finish.
There are other ways to invest in real estate that do not
take the same level of personal involvement and work as direct purchases of real
estate do. In other words, investments in buildings and land can be more
liquid. In addition to investing in and financing one’s own property, it’s
possible to invest in real estate exchange-traded funds (ETFs) and real estate
investment trusts (REITs) through stock brokerage accounts, including
individual retirement accounts.
Real estate is known as an illiquid asset. Turning real
estate assets into cash is a complex, costly process. This is so, whether the
owner is selling, or seeking profit from steady rental income. Returns on an
initial investment are typically slow, cumbersome, dependent on intermediaries,
and reliant on other people’s reliability and performance.
Blockchain technology is being applied to lessen the
administrative friction. Were real estate easier to transfer, proponents say, new
investment choices could be developed.
Readers may have noted a marked rise in discussions of DeFi — decentralized finance — as a way to bringing tangible assets into digital, accessible form. Real estate, with a global market approaching $300 trillion in total value, is an impressive use case. According to Paul Tostevin, director of the Savills World Research team:
By any measure, real estate is
by far the most significant store of wealth, representing more than 3.5 times
the total global GDP.
And no wonder. Territory is a good we cannot live without.
And real estate is finite.
June, 2021 — As Deeds.com readers know, we’ve
been watching the steady emergence of blockchain for real estate applications.
Blockchain, which was introduced to the world through Bitcoin in 2009, is here
to stay. How can we say so? It’s increasingly viewed as a change agent in the
way business is done.
Case in Point: El Salvador, June 2021
Cryptocurrency has just reached a new milestone, becoming a legal tender in El Salvador. To underscore the intent to make bitcoins more like a currency than a taxable asset, President Nayib Bukele said transactions could occur without being subject to capital gains tax. On the 9th of June, 2021, the president tweeted about the country’s official recognition of Bitcoin:
The #BitcoinLaw has been
approved by a supermajority in the Salvadoran Congress. 62 out of 84 votes!
Bukele has replied to concerns that cryptoassets can be used by criminals, observing that criminals trade in U.S. dollars and other assets as well. The president also tweeted a rebuttal to the objection that cryptocurrency relies on coal-based electricity:
I’ve just instructed the president of LaGeo (our state-owned geothermal electric company), to put up a plan to offer facilities for #Bitcoin mining with very cheap, 100% clean, 100% renewable, 0 emissions energy from our volcanos. This is going to evolve fast!
El Salvador will offer citizenship to those who have
invested in at least three bitcoins.
Note: Bitcoin with a capital B is usually
reserved to mean the platform, whereas a bitcoin with a small b is the
cryptoasset itself. BTC is the abbreviation for bitcoin traded on an exchange.
Art met real estate in a new way this year. Krista Kim’s Mars House design appeared on the first irreplaceable, non-fungible token (NFT) for a virtual house and garden. Kim’s virtual experience was followed by an NFT listing for a home in New York (a real one) on the Ethereum blockchain.
Think it’s all a flash in the pan? Look again. Blockchain’s tamper-resistant
ledger system offers tremendous benefits for real estate deeds. It’s poised to
transform the way we trace a chain
of title. And the rise of NFTs just shows how fast things are