Today, we wanted to share some important news about Blockchain and the important role it can play in real estate transactions. To get started, let’s first clear up common confusion around the Blockchain concept.
One of the most frequently asked questions is the following: “Is Blockchain the same as Bitcoin?” The answer is no. While both terms exist in this realm, they are actually different.
Blockchain is the technology (a specific kind of database) that allows cryptocurrencies, amongst other things, to exist. Bitcoin is the name of the best-known cryptocurrency and is powered by Blockchain. The term cryptocurrency refers to a medium of exchange, like the US dollar. It is a digital currency in which transactions are verified and records maintained by a decentralized system using cryptography rather than by a centralized authority.
Now that we have the basics covered, let’s dive into how this plays into the real estate market. Blockchain presents itself as a technology that has the power to change the global economy. Given its rise in popularity and potential, many companies have adopted blockchain technology into their operations as a form of accepted payment.
Within our organization, we have seen this firsthand. Our organization accepts Bitcoin payments through BitPay, which acts as the payment processor in the transaction and is used to verify the funds. The escrow company then sends out an invoice to the buyer, similar to wire instructions in a fiat currency transaction.
The buyer then has a fixed window of time to remit payment using Bitcoin or another accepted cryptocurrency. The funds go to escrow through BitPay, which converts the Bitcoin into cash and wires US Dollars into the escrow account. In summary, BitPay takes the Bitcoin and converts it to cash for the seller, so the seller never actually sees the Bitcoin payment, just the cash.
Over the past several years, we have closed three Bitcoin transactions and expect to see more in the near future.
Here’s what our COO, Joe Curtis, had to say about this revolutionary technology:
“We’re thrilled that our organization has closed another transaction with Bitcoin. We decided in 2018 to start accepting Bitcoin payments, and we are glad that we did, given that consumers see the value and are taking advantage of this payment method. This transaction exemplifies that, although it is a young technology in our industry, Blockchain and cryptocurrencies have the potential to become a bigger part of real estate transactions. And, given the current economic climate, some experts predict that real estate, gold, and Bitcoin will perform strongly over the long term. We look forward to being there for our clients and are very proud to be at the forefront to enable transactions in this way.”
Here are just a few benefits that experts have shared relating to the usage of Bitcoin:
Many experts cite that the most standout feature of making decentralized transactions or trade is the level of security. It does this by storing the information and records of that transaction in multiple ledgers across different servers.
The records remain safe and untraceable with the help of complex cryptography. Therefore, it is impossible to trace or intervene in the Blockchain system because it has no centralized control. Instead, it relies on complete randomization.
Blockchain technology is considered transparent to users. The decentralized ecosystem of the Blockchain makes it visible for everyone to keep track of their transactions. Due to the transparency, hacking into a specific Blockchain or trying to fraud someone through it is very difficult.
Blockchain technology aims to make business and other operations faster, safer, and more efficient. Experts explain that even though Blockchain technology faces a decent amount of scrutiny at times, there has been enough successful use to disprove speculations.
If you have questions about this topic or need escrow support, please reach out. Our team of escrow experts is here to support you and your needs.