Bitcoins, digital wallets, ICOs and other cryptocurrency terms are increasingly invading the real estate space and news headlines. As such, cryptocurrency and real estate are increasingly intertwined. Not all of the coverage has been positive, but it has been a riveting rollercoaster ride for real estate professionals, entrepreneurs, and others interested in the newest innovations, technology and alternative currency. What does it all mean? How are these digital currencies being used in real estate today? What’s in the pipeline? How risky is it? What are the advantages? How do you get started?

Cryptocurrency 101

Bitcoin, Litecoin and a gazillion other ‘coins’ are names of new digital currencies. According to Inc. there are already over 1,300 different types of these currencies and coins out there. Hundreds more are in the process of being launched right now. The easiest way to think of this is as a digital currency that you never touch or hold. Like money in your PayPal account that you transfer, but never touch and feel, tokens in your favorite video game or cash reward points on a credit card. You can earn it, transfer it, and spend it, but it is all virtual.

The Advantages of Using Cryptocurrency And Real Estate

There are many potential benefits and uses for cryptocurrency in real estate, including:

• Privacy when buying property
• Easier international and overseas transactions
• Liquidity in real estate investing
• Reducing the cost of real estate transactions
• Avoiding tax on transferring property rights
• Gaining attention in the press
• Balancing the security of brick and mortar real estate with the flexibility of bitcoin

The Dangers of Getting Involved with Cryptocurrency And Real Estate

There are also many risks and dangers of getting involved with cryptocurrencies:

• Losses due to hackers
• No downside protection and hard collateral
• Bad actors and entrepreneurs with no real estate experience
• Hyper volatility
• Control over currency prices held by very few influencers
• Risk of new regulations