What is cryptocurrency, and how is it impacting real estate investment?
Why cryptocurrency, and how does it work?
Cryptocurrency is a currency that takes the digital form and doesn’t have a centre issuing them. They don’t have a regulating authority either. Instead, a decentralised system does record transactions and issues of new units. Crypto-transactions usually take place one-on-one over a confidential and secure network.
Here are a few advantages of cryptocurrency
- With cryptocurrency, transactions are easier. This is because it takes place digitally and eliminates the need for middlemen.
- You can choose what information you want to disclose to the recipient and what you want to keep secure, unlike in the cases of card or cash transactions where information is left behind on the bank servers.
- Cryptocurrencies are not attached to any kind of government body that authorises them. They are managed by blockchain technology that involves only the seller and buyer in crypto-transactions.
- Cryptocurrencies make asset transfers seamless. You can pay the seller of any asset through bitcoins and buy assets. These transactions are extremely secure and make buying and selling assets quicker.
- Crypto transactions usually involve a very low transaction fee. This is mainly because the crypto network you are dealing with will compensate the data miners involved in the transaction. Therefore, crypto transactions are way cheaper than cash and credit transactions.
Before we move on to discuss how cryptocurrency is impacting real estate investment, let’s check out the basic workings of crypto.
How does cryptocurrency work?
There are three steps involved in cryptocurrency transactions. Since they are not controlled by any government-based regulatory body, crypto uses different types of coins or tokens. There are many brands of cryptocurrencies, including Bitcoin, Ethereum (ETH), Tether (USDT), and more. The following steps are involved in generating and using cryptocurrencies.
- Mining: The process of generating cryptocurrencies is called mining. The process uses computer power that solves complex maths problems in order to generate these coins. You can also buy cryptocurrencies from brokers or organisations and keep them stored in your digital wallet/crypto wallet.
- Buying and selling: You need to spend money in order to ‘buy’ cryptocurrencies. Central exchanges, crypto brokers and currency owners usually deal with the buying and selling of cryptocurrencies. There are also digital platforms that sell these currencies.
- Transactions: You can transfer cryptocurrencies from your wallet to another digital wallet with as simple a device as a smartphone. You can buy a variety of luxury goods, including real estate, cars, gold, and more. You can also indulge in trading cryptocurrencies or exchange them for cash.
Hope this section has given you a clear idea of cryptocurrencies, their advantages and their working. Let’s move on to discuss how cryptocurrency is impacting real estate investment. Stay with us!
How Cryptocurrency Is Impacting Real Estate Investment
The blockchain technology that is currently steering cryptocurrency is forecasted to revolutionise the way real estate transactions are made completely. Real estate in India is growing at a steady pace, and with the introduction of cryptocurrencies and blockchain technology, the field is all set to become more seamless, transaction-wise.
Let us now take a look at how cryptocurrency is impacting real estate investment –
- Real estate transactions are made quicker with cryptocurrency
Cryptocurrency makes real estate transactions quicker and more straightforward. There is no middleman, and it is completely decentralised. Since only the seller and buyer are involved in the transaction, the process is more straightforward than ever. Eliminating middlemen in crypto transactions also eliminates delays in real estate investment.
- Crypto transactions account for smarter processes
We live in a world that is moving closer to being completely digitised. Crypto transactions are gaining more popularity because their transactions happen completely online. More than being just a mode of digital payment, they also offer a range of faster ways to process transactions, manage contracts, and more. This is extremely crucial for transactions in fields like real estate. Thanks to the automation in play, blockchain technology also enable smarter ID verifications and background checks. This is also one of the ways how cryptocurrency is impacting real estate investment.
- Crypto transactions are 100% private and secure
Privacy was one of the major causes of concern in the early phases of cryptocurrency and blockchain. However, it is noteworthy that crypto transactions use cryptography technology that does not let out any payment-related information in the transaction. When you deal with cryptocurrencies and make a payment, you have complete control over what information you want to disclose to the recipient and more. This makes way for 100% privacy and security in transactions.
- Asset liquidation and ownership transfer become simple with cryptocurrencies
This is one of the biggest ways how cryptocurrency is impacting real estate investment. Liquidation and transfer of ownership are two of the most prolonging processes while investing in real estate. Liquidation of assets has long been a challenge for investors. Liquidation becomes simpler if you register your investments on the blockchain’s ledger. Making a real estate investment via cryptocurrencies helps eliminate the traditional purchase process, thereby accounting for an easier transfer of ownership.
These are a few ways how cryptocurrencies in impacting real estate investments. If you are looking to make seamless investments in real estate, you must consider investing using cryptocurrencies.
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