what is cryptocurrency
Apr
01

A Beginner’s Guide to Cryptocurrency

Buying

Just this week, PayPal and Visa both took major steps towards embracing cryptocurrency, potentially signaling a larger shift in the way the world views its impact on our evolving financial habits. Not sure what that means for you? No problem. At The Jenn Smira Team, we believe knowledge is power. That’s why we’re breaking down the nuts and bolts of cryptocurrency for you here so you can always stay one step ahead of the latest (and most relevant) developments.
First things first — what is cryptocurrency?: It’s a digital currency that can be used to buy goods and services using an online ledger with strong cryptography to secure online transactions.
Here’s what else you should know: 
  • Cryptocurrency is becoming more mainstream, with recent adoption by larger companies such as Paypal and Tesla.
  • Blockchain is the basis for all cryptocurrencies, and allows transactions to be conducted quickly, digitally, and securely.
  • It’s no longer purely speculative: many cryptocurrency projects possess real world applications with the potential to change many major industries such as finance, logistics, retail, medical, and you guessed it — even real estate!

How would cryptocurrency work in real estate?:

  • Some are projecting that real estate transactions will occur on blockchain in the future via smart contracts, allowing transactions to potentially close in hours, rather than weeks.
Can you buy real estate with cryptocurrency today?:
Yes and no. In order for cryptocurrency to become more common in Cryptocurrency transactions, both the buyer and seller have to be willing to accept the value. Transfers of property often involve banks, lawyers, title companies, and escrow agents — all of which would have to feel confident in the use of bitcoin in the transaction.

Anything else?:

  • The recent explosion of NFTs (non-fungible tokens) will potentially change how many people think about art and collectibles. As these items move toward digital, blockchain allows these transactions to ensure authenticity as well as track the scarcity and rarity of these digital assets. It also allows artists to receive payment for their work, even when resold on the secondary market (by getting a percentage of every transaction).

Here are some additional examples of how blockchain may be used: 

  • The tracking of perishable food products or medicine to make sure they were kept at the proper temperatures and aren’t expired.
  • Tracking luxury goods so that consumers can be confident they aren’t buying counterfeit products.
  • The sale of tickets to sporting events or concerts that can then be tracked when resold on secondary markets (allowing the original seller to get a percentage of that resale).

 

More questions on cryptocurrency in real estate? Our resident expert, Erica Breaux, has got answers! Get in touch with her @ erica.breaux@compass.com.