The bitcoin became a thing around 2009. When media sources caught wind that there was a new way to pay for stuff, they shared the information with the world. The value of the bitcoin became a problem though. In fact, in 2011, an individual could purchase one single digital currency unit for just $1.
Today, that same digital currency unit is going for $4,600. Any investors who had the foresight, or luck, to purchase $20 of bitcoin 6 years ago would have an investment worth more than $92,000 today. Miami real estate is embracing the bitcoin. The area’s real estate professionals have discovered the value and advantages of using the bitcoin network to handle large-scale transactions.
Processing Small and Large Transactions
Bitcoin has caused some debate between the bitcoin community folks and experts within the cryptocurrency side. Cryptocurrency secures digital transactions and prevents people from adding more units to currency. The debate between the two sides is about whether bitcoin should function as a store of value or as a digital cash system that is able to handle small transactions. Right now, bitcoin operates as both, making it a flexible currency option.
Studies show that U.S. and Australian banks charge as much as $4,000 for a $100,000 transaction. When the amount increases by several million dollars, the fee goes up too. With traditional currency, the fee could be as much as $10,000. In bitcoin, the fees are minimal. While the transaction fees still depend on the amount of funds in play, with bitcoin, millions of dollars can change hands with less than $10 being charged for processing.
Bitcoin is a decentralized type of digital currency. People can buy, sell, trade and earn it anonymously through the internet. Satoshi Nakamoto, which is the fake name of a secret coder, created bitcoin. Since he or she did so, other digital currencies have appeared on the scene. To purchase things with bitcoins, people exchange them or trade them for cash. Bitcoins are even used to buy items online. When people make a transaction using cryptocurrency, it is recorded on an enormous public ledger. This is called a blockchain.
A major benefit of using bitcoin is that it doesn’t need central servers or third-party processors to settle transactions. With this form of currency, transactions are peer-to-peer, so they are complete in just 10 minutes. When individuals use credit cards to process transactions, it can take months to settle them.
Embraced by the Real Estate Market
The fees that come with traditional currency have encouraged the Miami real estate market to embrace the bitcoin. Recently, Mike Komaransky, a bitcoin trader, listed his Miami mansion for 1,400 bitcoins or $6.5 million U.S. dollars. Komaransky has confirmed that a homebuyer could pay him in Zcash, which is another type of digital currency, or with traditional cash.
In placing his home on the market for digital currency, Komaransky became a member of a small group of homeowners who are willing to sell their homes for bitcoin. Komaransky spoke of the currency option. He said, “It may actually be less risky to make a transaction with bitcoins than cash. Bitcoins, due to their irreversible and instantaneous nature, make the process much quicker. And once you have the coins in your possession, it’s a done deal, and anyone can see it because it’s on the blockchain.” According to bitcoin experts, the currency is the money of the future, and it will revolutionize the real estate industry.
Dramatic globalization and modernizing are causing major changes. Miami isn’t the only city jumping into the bitcoin ring. Other cities like Dubai are also seeing an uptick in real estate sales involving cryptocurrency.
Bitcoin and its blockchain tracking system are perfectly positioned to assist international payments. This is especially helpful when companies or people need to transfer large amounts of money internationally. Not only is cryptocurrency legal, but it also saves clever investors money in the amount of fees that banks charge to move funds.
How Does a Homebuyer Purchase a Home with Bitcoins?
If a buyer decides to use cryptocurrency to purchase a home, he or she should expect to go through the regular title procedure. A homebuyer will still need to make a deposit into an escrow account as the title company transfers the ownership of the home. Once the process is complete, the buyer will be required to shift the rest of the digital coins to the title company or the seller.
When there’s a transfer of value, a buyer and a seller can agree to any kind of transaction. A person could sell their home for a car if they wanted to. This detail is included on the closing statement. In fact, the law requires it to be listed.
It’s rare for people to purchase a home with bitcoin. It will likely be years before homebuyers regularly buy and sell homes with cryptocurrency. What’s more likely to happen in the near future is that brokers will use blockchain technology to make real estate transactions go through more quickly. Soon, brokers will be able to decrease the closing process to hours instead of days. Technology makes it possible for data to be verified instantly on a public ledger. Real estate agents like Samuel Strauch are forward thinkers, and because they are, the industry is changing with the times and embracing new business practices.
Samuel Strauch: One of Miami’s Premier Real Estate Agents
Successful in real estate, Samuel Strauch earned his undergraduate business degree from Hofstra University in New York. He also attended Erasmus University in Rotterdam and Harvard University. Strauch started his career in the banking industry. However, he soon shifted over to real estate in South Florida. In 2002, he launched his own company, one that continues to grow. He started his business because he noticed that the city of Miami was transforming from a vacation destination into a place where people worked and played.
Samuel Strauch is an investor in a number of internet and restaurant businesses. He is also an enthusiast of art and photography. To stay focused and give his brain a break, Strauch takes time for meditation. He also enjoys spending time with family members and friends.
Click here to see more of Samuel Strauch’s photography and artwork.
Taking a Big Leap Forward
By embracing bitcoin currency, the real estate industry is taking a big leap toward the future. In doing so, it is making it easier for other industries to follow suit. In most cases, technology works to make things function better and quicker. If industries continue to accept the bitcoin, the world may soon have a new form of currency, one that is cheaper and easier to use.
Listen to this Daniel Budzinski Podcast with Samuel Strauch to learn more about Metrik Real Estate and his business philosophy.