Cryptocurrency and the Housing Market: Changing Trends in 2021
In the current economic state of the United States following the coronavirus pandemic, lenders and buyers are looking for new innovative ways to work with loans.
There are now more opportunities for buying and selling homes, especially with the rise of cryptocurrency.
The Basics of Cryptocurrency
Bitcoin can usually be referred to as coins, digital currencies that are secured in cryptography, the enciphering and deciphering of messages.
They rely on blockchain technology, which is essentially a ledger of all transactions using the coins. They are not controlled by any central authority, bank, or government. New coins come from what is known as mining. This is a computer process where nodes compete against each other through mathematical equations.
If you’re the first to complete the mine, then you will have created a new block, which is then added to the global blockchain. Some coins can be pre-mined before release.
The economics of Bitcoin and crypto are ever-changing and expanding. As of earlier this year, the value of cryptocurrency was estimated to be close to $1 trillion.
Lenders Accepting Crypto for Down Payments
One of the biggest changes between cryptocurrency and the housing markets has been the introduction of major mortgage lenders accepting cryptocurrency as a payment method. What this means, is that you can use Bitcoin for a down payment for a new home with providers such as the Home Loan Expert. They have committed to the new wave of digital currencies and have started doing substantial payments of Bitcoin.
Many modern Americans are now exploring options within cryptocurrency. Many millennials and Generation Z make the bulk of this group. Indeed, they are the current largest market for purchasing new homes.
One of the main reasons we have started seeing this increased demand is due to real estate sales moving more online. The global COVID-19 pandemic had an impact, but it had been going that way for a while.
There are still state and federal laws that have to be considered and updated, for this to go further, but for now, the industry is looking to innovate.
What the Future Holds
We are only seeing the beginning of cryptocurrencies in the housing market.
The real estate industry is still building new residential and commercial buildings and developing land. Bitcoin is also being used as collateral. The global Bitcoin rise will flip the entire financial system upside down. Where the industry will transition from a debt-based monetary system to an equity-based system.
The blockchain will help encourage investment in real estate, by reduced fees and enhancing online security. In the future, investors will be able to buy and sell fractions of their real estate through crypto tokens.
Before becoming a significant real estate market disruptor, the blockchain will have to evolve even further. The real bonus comes with the encryption technology, making it incredibly useful for transferring large sums with luxury properties in mind.
By Zoe Price
Photos by Andre Francois and Tech Daily
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