Can You Sell Or Buy A House Using Bitcoin? (Ep101)


Bitcoin is getting a lot of press lately,
mainly because of the significant increase
in value of Bitcoins over the last 12 months.
Many people looking at Bitcoin has potential
alternative investment strategies and today
I want to talk about whether or not you can
use Bitcoin to sell your home or to buy a
home.
I am Ryan McClain from onproperty.com.au,
your daily dose of property education and
inspiration.
There is recently a story of a person who
was selling their home in Perth Hills in Western
Australia and they were only aceepting Bitcoin
as the form of payment for this home. So this
is potentially the first time in Australia
that will be sold using Bitcoin only and not
actually being able to purchase this home
in cash. So you are going to be thinking if
you can purchase a home using Bitcoin and
should you go about doing it. Obviously the
answer to can you do it is yes. Truthfully,
I do not understand all the government regulations
around Bitcoin at the moment because I do
not necessarily understand the currency fully
itself anyway. So what is Bitcoin roughly.
I do not mind Bitcoins myself, I do not own
any Bitcoins myself, but I have done some
research online. So Bitcoin is a decentralized
digital currency also known as a cryptocurrency
and basically it is created on the internet
and it was created using software and Bitcoin
is designed in such a way that you do not
need banks to hold money, you do not need
to go through a central system like you do
in Australia, where you have to go through
banks in order to pay people or through PayPal.
It is decentralized, so you can send money
directly from one person to the other which
means fees are a lot less. Now as the cryptocurrency,
the software is created that as more and more
Bitcoins are mined. When you create Bitcoins,
it actually gets harder and harder to create
more Bitcoins. So it helps to stabilize that
currency and make sure there is no one person
who can say what I am going to increase, I
am going to put in an influx of Bitcoins into
the market. There is over 1 billion dollars
of Bitcoin currency in the market at the moment.
So there are a lot of different exchanges
out there, we can exchange money for Bitcoins
or Bitcoins for your local currency, but that
is a rough idea of what Bitcoin is. If you
want more information on that, then I suggest
you go to Google or you have a search in YouTube
on what Bitcoin is and what are the risks
associated with it.
I wanted to talk about some of the risks of
Bitcoins and first thing probably what I would
consider one of the major risks is the fluctuating
exchange rates of Bitcoin at the moment. Now
Bitcoins stay pretty stable in its exchange
rate and the growth of that product in its
early days, but in the last 12 months it has
gone from something like $10 per Bitcoin to
over $200 per Bitcoin, but it is not all happy
days. There is not just up, up, up…..because
there have been instances where big coin has
dropped dramatically in value. One of those
instances was when the Chinese government
actually closed down a lot of the exchanges
of Bitcoin and automatically overnight that
product, the Bitcoin exchange, almost halved.
So fluctuations in exchange rate are extreme
and that is a risk if you are going to be
buying or selling a home using Bitcoin. There
was recently a story of Mt.Gox where there
was a robbery of Bitcoins worth $470 million.
Someone came and obviously robbed all these
Bitcoins and huge value in that. All that
information on that is blowing up on the web
at the moment. There was also a story of a
guy who had thrown out a hard drive probably
a year ago or couple of years ago, but now
with the value of Bitcoin, he realizes that
there was actually over $14 million in value
of Bitcoin on that hard drive, but he had
thrown it away. So if you are storing Bitcoin
on your computer or your hard drive and it
crashes, it is going to be pretty hard to
access that. So that is a risk as well.
Lastly, you have got risk of hackers. A lot
of the Bitcoin exchanges that have come up
to help people, I guess, used Bitcoin had
been severely attacked by hackers and obviously
people want to come in, they want to get access
to the Bitcoins and they want to, I guess,
steal them and have that money for themselves.
So there is always the risk of hacking as
well. So now that I have scared you with all
the risks of Bitcoin, I want to ask you when
it comes to selling your home using Bitcoin
or buying a home using Bitcoin, at this point
in time in 2014, why bother what is the point.
While selling your house using Bitcoin is
likely going to get you some press. It is
unlikely to attract many buyers. Think about
it in your life a view of flicking through
realestate.com.au or you are flicking through
domain.com.au and you see a house and you
like it, you think okay and might go and inspect
that property that could be something that
I like. But you seeing the listing will only
accept Bitcoin as payment. Every day investors,
every day home buyers are going to look at
that and are going to immediately been turned
off and go Bitcoin? what the hell is Bitcoin?
that sounds too risky for me, I am not going
to go ahead and do that. So I think Bitcoin
is not mainstreamed enough. There is not enough
people who are comforted in the currency and
happy to use the currency that it would be
worthwhile for your standard home seller in
Australia to try and sell their home using
Bitcoin.
Now you could offer it as an option, may be
you can purchase it using cash or you can
purchase it using Bitcoin and may be that
opens you up to some press and may be some
extra buyers or realistically if you are just
saying you can only buy using Bitcoin, my
thoughts are that you are going to close off
a lot of your potential buyers and that is
actually going to make it hard out for you
to sell your property.
If you want to checkout the full transcription
of this article and more, head over to onproperty.com.au/101
and you can get all of that over there. Until
tomorrow, stay positive.
PS: Tomorrow, I have got an interview with
Ben Turner from ipropertyinvestor.com.au and
we will talk about his investment career and
then the following day, we talk about with
him investing in US property. But tomorrow
will be the first episode where I have got
sponsorships on the podcast. So I have secured
sponsorships for the month of March, so you
guys will notice that at the start of the
podcast, it is going to be about 15 seconds
within the first minute where I have got talking
about a sponsor’s product and then there is
going to be 60 seconds, somewhere around the
middle where I am also going to be talking
about the sponsor as well. The sponsors that
I have lined up, I believe, are great match
for you guys and for the people that listen
to this podcast. So I do think that they are
going to add value and they encouraged me
to keep making this, they make it financially
viable, which means I can continue to improve
the production quality and continue to ensure
that every single morning when you wake up,
you have got a brand new episode of Onproperty
to listen to.
So until tomorrow, stay positive.

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