Bitcoin won’t Encourage Cryptocurrency for Real Estate, Yet Cryptoeconomics WillMay 30, 2018
As the mighty Bitcoin enters the mainstream economy, many sellers and homebuyers are starting to use the cryptocurrency to conduct real estate transactions.
Last year, the Southeby’s International Realty sold a one single-family homes in Austin, Texas with the use of Bitcoin. The transaction was made when the Bitcoin prices were $3, 429 in September last year. Aside from this transaction, there are also other real estate properties which are being listed for Bitcoin. A recent article from Forbes describes how a certain company, recently listed two multi-million dollar homes for sale under Bitcoin.
And just recently, a 27-acre piece of land in Silicon Valley has been listed as well, for sale in Bitcoin, XRP, and Ether with a starting price of $16 million.
However, although several homes are listed for sale in Bitcoin, some still believe that using Bitcoin for real estate transactions will not yield in widespread adoption. At least not until the industry of real estate starts to utilize the Blockchain technology, which in turn will make it possible for the adoption of the cryptocurrency transactions.
According to Natalia Karayaneva, the CEO of Property, the only way to encourage both the sellers and homebuyers to take advantage of the cryptocurrency for real estate transactions is to make a “crypto economics” approach, which goes much further than simply hitting homes up for sale in Bitcoin.
Cryptoeconomics lays out the framework in a way which cryptocurrency ecosystem thrive and function across the decentralized network, which is also known as the Blockchain. Furthermore, this ecosystem can allow some individuals who do not know one another to reach consensus across an anonymous network through the use of cryptocurrencies. It can be achievable with the use of a combination of basic cryptographic tools and economic incentives.
“Cryptocurrency is like a mechanism desing,” said Karl Floerch, the core researcher from the Ethereum Foundation. It all starts with the end works and goals backward to find the right set of mechanisms to align with the incentives of all the recipients in the system and to bring forth the common goal.”
Like the Propy, an international real estate marketplace, applies crypto economics by providing incentives to individual and to join the Propy platform to share properties online, list properties and upload the title history into their system and more. Users of the Propy platform are then rewarded with Blockchain tokens which serve as “coupons.” These coupons can be used for the platform’s services, and can also be traded to other users who want to obtain access to the services.