R E A L E S TAT E
Will Bitcoin Buy Your Next Home? The use of cryptocurrencies in real estate transactions is growing By Mary Prenon
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28 I N S I G H T April 8–14, 2022
(Top– Bottom) Visual representations of the digital cryptocurrencies bitcoin, ethereum, ripple, and litecoin. There are currently more than 1,000 different cryptocurrencies in the world.
signed to work as a medium of exchange through a computer network and secured by encryption methods. A cryptocurrency is a tradable digital asset or digital form of money, built on blockchain technology, that exists only online. There are currently more than 1,000 different cryptocurrencies in the world, and bitcoin, first released in 2009, is one of the most popular. Chorew noted that cryptocurrency doesn’t exist in physical forms such as paper money or coins, and it currently isn’t issued by a central authority such as a bank. However, President Joe Biden’s recently signed executive order is now calling on government agencies to study cryptocurrencies and develop a government-wide approach to regulating digital assets. While bitcoin is the most well-known, Chorew noted that many real estate transactions are done with ethereum, another digital currency. “Purchasing crypto requires either a debit card or direct deposit to set up your ‘crypto wallet’ to hold your digital currency,” she said. “The amount of crypto can fluctuate like the stock market, but there are also stable crypto coins that are redeemable on a one-to-one basis for the U.S. dollar.” Chorew compared the cryptocurrency craze with people’s initial reactions to social media almost 20 years ago. “I remember it was 2004 and I was almost laughed out of the room at a conference during my presentation about the impact of social media on real estate transactions,” Chorew said. “It was just like predicting how the internet would replace those old real estate listing books. The important thing is that even with the use of cryptocurrency now, the real estate agent is still a vital part of the transaction.” So what’s the advantage of using cryptocurrency for real estate transactions? According to Chorew, there’s much less fraud because of the stability of blockchain technology—a system of recording data that makes it almost impossible to change or hack. “It’s also easier to do business using cryptocurrency and blockchains,” she said. “Because everything
FROM TOP: MOHIT KUMAR/UNSPLASH, DAN KITWOOD/GETTY IMAGES, JACK TAYLOR/GETTY IMAGES
itcoin,ethereum,tether,dogecoin, and cardano are just a handful of the digital currencies that have been slowly edging their way into our financial system as the cryptocurrency craze spreads throughout the globe. People are using these forms of digital money to purchase everything from hamburgers to hotel rooms—and now, apparently, even the American Dream. David Conroy, director of emerging technology for the National Association of Realtors (NAR), has been involved with this technology since 2013 and recognizes that houses, condos, and land may represent the next buying trend for cryptocurrency. In fact, NAR is already preparing to launch a presidential advisory group in the next few months to research the impact of cryptocurrency on the real estate industry. While the majority of these futuristic-like deals have been relegated mostly to high-end properties in Miami and California’s Silicon Valley, Conroy believes that could change in the years to come. “In most cases, a real estate deal involving cryptocurrency will use a third party, such as BitPay, where the buyer can exchange the crypto for cash,” he told Insight. “Buyers can then use that as a down payment, or as an entire cash payment. In some cases, the home seller may even accept a cryptocurrency payment in lieu of cash.” In addition to purchases, accepting rent, escrow, or down payments in cryptocurrency could reduce settlement time to seconds instead of days and eliminate the need for wires while only costing pennies in transaction fees even with international buyers, according to Conroy. Amy Chorew, a Connecticut realtor and president of Curated Learning, first heard about cryptocurrency in 2017 while having her hair styled. “My hairdresser was talking about buying a condo and cashing out $50,000 in cryptocurrency as part of the down payment. All I could say at that time was ‘What’s that?’” Chorew told Insight. A cryptocurrency is a digital type of currency de-
