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The pitch for cryptocurrency is “money for the digital age,” similar to the transition from the gold standard to fiat currency in the 1930s. Crypto offers a decentralized currency designed to bypass the “top-down” centralization of government-backed currency. Transactions and ownership are encoded in the Blockchain, which is basically a digital ledger.

It’s not limited to the internet either. Properties were traded as “NFT” or non-fungible tokens/unique assets on the blockchain. Of course, there is a market of homebuyers interested in shopping this way, and teams are adapting to meet this demand.

But remember. if it sounds too good to be true, it probably is. Crypto’s problems are well documented. Here are a few ways cryptocurrency can impact you and other real estate professionals.

You will limit yourself

The whole point of currency and being able to exchange it is that it has a universally agreed upon value. Cryptocurrency has its inherent disadvantage that not everyone recognizes or accepts it. If you become a specialist in crypto-transactions, your customer pool will be limited. If you accept payments in crypto, you will be equally limited in what you can spend your income on in your personal life. WHO doing Recognize Crypto? The US government. Despite the lack of regulations, crypto transactions are considered taxable.

The value is too volatile

Another value issue arises from the volatility of the crypto market. Bitcoin, for example, peaked at $61,195.30 on March 13, 2021, only to drop to $29,793.80 by July 20, 2021. These types of fluctuations can be stable if you’re dealing with stocks, but currency requires more stability to be usable. Dogecoin has had similar highs and lows in value. Inflation and interest rates are already plaguing agents and brokers. Do you want a market with that kind of downside potential added to the mix?

Availability or lack thereof

Crypto wallets are opened with private keys. what ownership secures is that you have the key. As Frank Mucci (policy fellow at the London School of Economics) has written, this creates many potential problems for storing real estate transactions or home ownership certificates in these wallets. Say your client dies unexpectedly and didn’t leave behind knowledge of the key. Now the deal simply cannot be completed.

Opportunity for fraud

Critics of cryptocurrency have compared it to multi-level marketing schemes. Some have taken it a step further to outright fraud. Jordan Moody, Indiana agent William Ravis with Moody & Company, spoke about the real estate scams he’s witnessed: buyers are responding to false home ads and being duped by moving costs. The latest innovation in these scams is asking for cryptocurrency payments. This plays on the public ignorance of crypto and the difficulty of getting the money after a transaction is completed.

There are no judges of deeds

Cryptocurrency’s advantage, decentralization, has its drawbacks. Government-backed currency is under the authority of those governments. This means that law enforcement and the court system act as a remedy for people who have had their property stolen.

There is no human arbiter of the blockchain, only “smart contracts”, and the code simply cannot be compared to the human brain. Burglary may seem impossible, but not with crypto. Let’s say your buyer is buying property as an NFT. Someone can then steal their private key and transfer said NFT to themselves.



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