Can bitcoin be utilized in real estate?
Investor · Atlanta, GA · Member since 2013 · 3k+ posts · 3k+ votes
Can bitcoin be utilized in real estate?
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Denver, CO · Member since 2013 · 409 posts · 105 votes
12yYou know a bubble has reached its peak when...
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- Realtor, General Contractor, and Developer · Redding, CA · Member since 2009 · 7k+ posts · 4k+ votes12y
@Michael Heisterkamp sorry, but it's nothing like real estate. When all is said and done if you own real estate you have something tangible, and "real", with bitcoins, it's based on nothing real. The fact you get a bunch of people to buy into a system and enough of them do it for a period of time, it's still at the end of the day only as strong as the foundation supporting it. What or who exactly is that?
- Realtor, General Contractor, and Developer · Redding, CA · Member since 2009 · 7k+ posts · 4k+ votes12y
I tried putting this on as a short link, but it didn't work, so just pasting it instead. Sorry.
- 12yJ. MartinPro MemberRental Property Investor · Oakland, CA · Member since 2011 · 3k+ posts · 2k+ votes
@Karen Margrave , you are correct that it is not like real estate. Real estate can yield a monthly return without appreciation, it has much more stable returns, and much more of it can also be built tomorrow. There are a plethora of other differences. I would say it's closer to a very unproven gold. As @Michael Heisterkamp was pointing out, it has a finite supply (no more than 21 million can ever be in circulation, like gold is hard to mine..). It is not accepted for many typical transactions (just like gold). There is no "midas touch", alchemy, or central bank that can expand the supply of either of them infinitely.
The fact that it is decentralized and not "backed" (aka controlled by) a central authority is viewed by most users as one of its strengths - not one of its weaknesses. Gold is not backed by any government either, and the days when the dollar was "backed" and convertible to gold is LONG gone. It is traded freely on the open market for anyone who would like to buy it in a private transaction. It only has value because of its limited supply and thousands of years as a use of store of value. Besides the small amount used in electronics, its next best usefulness is hanging it around your neck to look shiny..
Bitcoin is different in that it is intangible. But when gold's next best use it to look shiny, it's hard to hang my hat on its tangibility as a necessity to its value. A share of an ETF for gold is just as good as gold in many ways, and you can neither touch it nor see it. It has lower holding costs than physical gold, lower transaction costs to buy and sell, and can be exchanged to USD and transferred around the world in any currency quickly. Much like BitCoin. The biggest difference? Bitcoin has only been around for a few years vs thousands, so is highly untested in its durability of people's views as a store of value, and perhaps more often in the future as a medium of exchange... You are right. It does depend on people believing in it as a store of value.. And that varies wildly from day to day. I'm not advocating anyone to purchase it unless they are gambling, but it's interesting and just trying to explain people's perspective on it.
Greenspan said almost the exact thing you said the other day regarding it needing to be "backed" by a govt, so what you're saying is not off the mark from a highly (formerly?) respected economist.. But it's exactly why so many people want it..
@Michaela G. , you are right individuals can still trade it online. But Chinese financial institutions and businesses aren't supposed to quote in bitcoin. Thus the news with the Baidu subsidiary. The govt is weary of banks getting into trouble dealing with wild investments, and there is some issue with Chinese trying to get out of the yuan w/o controls from the government's perspective I think.. But great discussion. I had to give you a big vote for this one, as I am obviously beyond interested in the Bitcoin / cryptocurrency phenomenon.
- Arlington, TX · Member since 2013 · 62 posts · 11 votes12y
Originally posted by Karen Margrave:
@Michael Heisterkamp sorry, but it's nothing like real estate. When all is said and done if you own real estate you have something tangible, and "real", with bitcoins, it's based on nothing real. The fact you get a bunch of people to buy into a system and enough of them do it for a period of time, it's still at the end of the day only as strong as the foundation supporting it. What or who exactly is that?Real estate is no different. If tomorrow every person decided that California was a terrible place to live and everyone moved out the real estate would hold zero value. Nothing will always hold it's value forever. I can sell a hard drive with 10 million dollars worth of bitcoin for 10 million dollars. I think your view of bitcoin is typical. But in reality nothing is truly tangible because it is only worth what someone will pay for it.
- Investor · Atlanta, GA · Member since 2013 · 3k+ posts · 3k+ votes12y
Let's say I have a house that I want to sell for $ 100,000 .
Right now that would be 145.06 in Bitcoin. Tomorrow it might be 130 bitcoin or 160 bitcoin. If I always adjust to what the current currency conversion is at the time of sale and if I then immediately convert it to US$ and send to my bank account - then what is the big risk?
It'll open the field to others beside the 'normal' American buyer. It might attract foreign investors, who can avoid expensive conversion rates etc. Because there aren't a lot of other houses sold this way, people might not do any heavy bargaining. And then there'll be interest by the media, because of the uniqueness , which will also again attract the average American buyer.
And if I then disclose all the proper things to my bank - where's the downside?
- 12yJ. MartinPro MemberRental Property Investor · Oakland, CA · Member since 2011 · 3k+ posts · 2k+ votes
@Michaela G. , I'm totally with you, and I like the idea. Put it on Craigslist and email it to the media! But I think some people don't understand the conversion service you're talking about and not actually holding the bitcoin. Just getting USD delivered to you. I will say though, I think foreign currency conversion at that volume is not much different than the 1% transaction fee on BTC. You can just do an international wire/conversion through your bank. I think you should market your property in BTC also, but why not accept all currencies and be the first to not only accept bitcoin and USD, but all currencies? Just be sure to write your contract so that the price is fixed to USD and the buyer pays whatever the conversion rate is in their currency on your website, plus any transaction fee for you to receive the money.. Good luck!
- Denver, CO · Member since 2013 · 409 posts · 105 votes12y
What expensive conversion rates are you speaking of? I don't intend to sound discouraging, I actually want to see you attempt this.
eta: $686/coin as I type this
- Investor · Lucas, TX · Member since 2010 · 620 posts · 352 votes12y
I've been following Bitcoin for about 3 years when a friend of mine bought a few thousand dollars worth when they were $17 a piece. I thought it was hokey then and I think they are hokey now.
The last price a buyer and a seller transacted at is the "value". But how deep and liquid is this market? Not very I imagine, especially when compared to the USD. I hear about people who have millions of dollars worth of Bitcoins but what happens when they try to convert them to USD? At some point there will be no buyers and the price will crash. That is why we see so much volatility.
China has banned their financial institutions from transacting in Bitcoins. They had a similar virtual currency there before and they cracked down on that because they could - there was one company that had central control of them.
The government does like competing currencies. I imagine the only reason they are letting Bitcoin survive for now is that they want to get the population used to the idea of a virtual currency so that they can introduce their own and make sure they get every red cent of tax owed to them.
I won't accept Bitcoins so they are worth zero to me. I cannot pay my taxes in them. I cannot spend them at the mall. That said; everything is worth what it's purchaser will pay for it. So if someone wants to pay $1,200 for a Bitcoin then I guess that is what they are worth to that purchaser. I'd rather pay $1,200 for an ounce of gold.
- Investor · Atlanta, GA · Member since 2013 · 3k+ posts · 3k+ votes12y
Originally posted by John Rooster:
What expensive conversion rates are you speaking of? I don't intend to sound discouraging, I actually want to see you attempt this.
eta: $686/coin as I type this
Every time you go through a bank with foreign currency, they have one rate for buying and a different rate for selling currency. And they make profit on the spread.
I have done many things in my life where people around me kept saying 'well, you can't do that!" or "that doesn't make sense!" or "not simple enough". or....... And later on those same people were jealous.
I personally like to think about things and try to explore if they can be done, and can be done legally, instead of immediately saying :"you can't do that....". Isn't that what we hear all around us from non-REI?
You can complain about 1/2 the water having air or you can try to figure out what to do with the half a glass of water
- Investor · Lucas, TX · Member since 2010 · 620 posts · 352 votes12y
Ha. I just checked. The damn things are worth like $600 at the moment. They were $1,200 just a few days ago.
Trading Bitcoins is like trading penny stocks. Good luck suckers.
- Investor · Atlanta, GA · Member since 2013 · 3k+ posts · 3k+ votes12y
Originally posted by Robert Steele:
Ha. I just checked. The damn things are worth like $600 at the moment. They were $1,200 just a few days ago.
Trading Bitcoins is like trading penny stocks. Good luck suckers.
This thread is not about trading bitcoins, so your name calling is uncalled for
- Investor · Chicago, IL · Member since 2012 · 111 posts · 73 votes12y
@Michaela Graham - I think the point @Robert Steele
- Investor · Atlanta, GA · Member since 2013 · 3k+ posts · 3k+ votes12y
Originally posted by Cliff Mccue:
@Michaela Graham - I think the point @Robert SteeleBut if you read the comments, then you'd see that nobody is suggesting to set a price in bitcoin and hold that money in your bitcoin wallet.
If you go to www.bitcoin.com , then you can see that you can have it set up to immediately transfer to your bank account in U.S $ at the present rate.
I'm not saying 'do it' or 'don't do it' , but I think it's worth exploring the possibilities instead of being an immediate nay sayer. I think brainstorming is awesome, when it's with people that are open to possibilities. But it's not much fun when it involves people that immediately say 'no' and won't even 'play'.
- Denver, CO · Member since 2013 · 409 posts · 105 votes12y
Originally posted by Michaela Graham:
Originally posted by John Rooster:
What expensive conversion rates are you speaking of? I don't intend to sound discouraging, I actually want to see you attempt this.
eta: $686/coin as I type this
Every time you go through a bank with foreign currency, they have one rate for buying and a different rate for selling currency. And they make profit on the spread.
I have never done that other than for small amounts of money at an airport. It is certainly reasonable for them to charge a big transaction fee and spread for exchanging $100 U.S. But you say the conversion is "expensive" for a large sum of money, lets say $200,00 U.S., the price of an average house. How much would one lose in the conversion of $200,000 (US equivalent) from Euros to USD using a competitive foreign currency exchanger like Wells Fargo? My guess would be $500. What is the actual number?
- Investor · Chicago, IL · Member since 2012 · 111 posts · 73 votes12y
@Michaela G. I think the thing that you are missing is that it would not be an immediate swap for your local currency. When you are overseas and you purchase something on your credit card, they charge you their fee at the worst price of the day. So the risk is in the volatility of the currency. Bitcoin has had daily ranges of 100's of dollars. You are underestimating your risk.
- Member since 2013 · 24 posts · 15 votes12y
My post is kinda-sorta related to the topic. I'd never heard of bitcoin until this week. A Facebook friend posted saying he was approached about investing in a company that was developing the first debit card for bitcoin.
They're with Muckerlab accelerator in LA and it sounds like he thinks this could take off.
Ian is a genius (literally) and very tech/investment savvy. You can google him if you'd like...his name is Ian Ippolito. He founded vworker which he sold last year for an undisclosed, but surely obscene amount of money.
Anyway...if this interests you at all from a ground floor investment standpoint...PM me and I'll get you in touch with him.
Like I said...I am very uninformed on the topic so I can't argue for or against its merit...but thought I'd pass it along for anyone interested as it seems this has become a hot topic here on BP.
- Investor · Dallas, TX · Member since 2008 · 44 posts · 5 votes12yThere are several homes for sale here: http://www.bitpremier.com You still would have to pay the same US taxes as using dollars. Not paying would be the same as accepting cash and not including it on your tax returns.
- 12yJ. MartinPro MemberRental Property Investor · Oakland, CA · Member since 2011 · 3k+ posts · 2k+ votes
@Michaela G. , sometimes nay-sayers inspire me to get up and get something done.[SOLICITATION REMOVED]
@Robert Steele , I agree it's highly speculative/gamble and as I have said before, don't own anything you can't afford to lose. But let's play nice in the sandbox! No one is talking about unabated trading, or necessitating the "suckers" comment. Just a curiosity..
@Cliff Mccue , you can trade it in real time. There is a spread. But you can convert immediately at spot rate. I use a website where they record the transaction at the actual trade rate at the second you trade, then settle at the traded price in 2-3 days, like stock. Where you do the exchange will depend on what rate you get, but you can know what the rate is when you do the actual trade. Honestly, the spreads vary more in BTC depending on the volatility at the time. But they're not much different.
@Jonathan W. , interesting site. I didn't know about it.
@Account Closed , highly speculative, but very interesting idea! keep in touch with your friend! lol
- Investor · Atlanta, GA · Member since 2013 · 3k+ posts · 3k+ votes12y
Interesting site. Thank you. That's sort of what I envisioned should be out there: you list your 'whatever' in US$ and it adjusts the bitcoin price to the current rate.
- 12yEngelo RumoraBusiness MemberInvestor · Toledo, OH · Member since 2013 · 4k+ posts · 2k+ votes
Hey guys,
How about Litecoins? haha
Lets change the topic a bit to them lol
Supposedly they are silver to the Bitcoin?
Thanks.
- 12yJ. MartinPro MemberRental Property Investor · Oakland, CA · Member since 2011 · 3k+ posts · 2k+ votes
My previous posting was edited, so I hadn't been able to make the point I was trying.. This is not a solicitation, but a direct response to the first question that started the post: Can bitcoin be accepted for real estate? I was trying to say yes, there is a recent forum on BP with a member selling their property for bitcoin, and the pricing is exactly as Michaela stated. The bitcoin price fluctuates. Search for bitcoin on BP if the moderator again deletes the link and reference. But the real intent here is to answer the question on the forum, not to solicit anything:
@Engelo Rumora , I already own some litecoin too ;)
- Arlington, TX · Member since 2013 · 62 posts · 11 votes12y
For everyone talking about conversion rates. I've traded currency for years. There is no difference in the bid:ask spread no matter how much you exchange of two currency types. There is often an exchange fee of 10 to 25 dollars depending on the bank for business transactions. That fee is immaterial when you look at a business transaction as a whole. If you are doing a direct ACH or Wire payment via an international bank you might be able to forgo the exchange fee if you do enough business on a yearly basis. However if you are selling property to foreign parties you won't qualify for that. Also you better look at doing transactions in Bitcoin not to save the transfer fee and exchange fee but because that will soon be the only way for Americans do but properties outside of the USA. The major banks are putting monthly limits on outflows of USA capital to foreign accounts. Currently JPMorgan is the only bank to have done so but and limits transactions to $50,000 a month unless express business is allowed by the bank (aka it wont be allowed) the USA is in a currency valuation crisis and the banks are looking to lock up capital to weather the storm.
Long story short anyone who dismisses Bitcoin and other similar currencies you are likely to be the ones holding the candle burning from both ends.
- Investor · Central Valley, CA · Member since 2012 · 6k+ posts · 3k+ votes12y
Originally posted by Jonathan W.:
There are several homes for sale here: http://www.bitpremier.com
You still would have to pay the same US taxes as using dollars. Not paying would be the same as accepting cash and not including it on your tax returns.I think the issue of taxation on real property sold via Bitcoin is one that is getting glossed over. You can set your sale price of US real estate in any currency you want. Swedish Kroner or Mexican Pesos or Euros or Bitcoin or whatever. But all income generated in the US has to be reported to the IRS, right? So what difference does it make what currency you list at or sell in? Will the IRS require that you use the Bitcoin exchange rate on the day of sale or whatever rate you feel is fair? Is there any evidence out there that you don't owe taxes until you "cash out" by liquidating Bitcoin? Does anyone really think the IRS will treat Bitcoin like 1031 exchanges? C'mon BP Nation. Think.
Major retailers are NOT yet accepting Bitcoin. Gyft.com will accept Bitcoin and issue gift cards to major retailers. Which is hardly the same thing as Sears accepting Bitcoin and letting you walk out with a new power drill. Gyft has decided that they can handle the exchange risk. Not Sears.
When I can buy my entry to TED Conferences and pay for my Burning Man tickets with Bitcoin, then I'll know it's here to stay AND too late for me to profit on it.
- Investor · Lucas, TX · Member since 2010 · 620 posts · 352 votes12y
Originally posted by Michaela Graham:
Originally posted by Robert Steele:
Ha. I just checked. The damn things are worth like $600 at the moment. They were $1,200 just a few days ago.
Trading Bitcoins is like trading penny stocks. Good luck suckers.This thread is not about trading bitcoins, so your name calling is uncalled for
I apologize if I offended you @Michaela G.. I didn't mean to call anyone on this thread a sucker. Perhaps I could have phrased it better as a fool and his money are easily parted.
- 12ySteven Hamilton IIPro MemberAccountant, Enrolled Agent · Grayslake, IL · Member since 2011 · 5k+ posts · 2k+ votes
Originally posted by K. Marie Poe:
Originally posted by Jonathan W.:
There are several homes for sale here: http://www.bitpremier.com
You still would have to pay the same US taxes as using dollars. Not paying would be the same as accepting cash and not including it on your tax returns.I think the issue of taxation on real property sold via Bitcoin is one that is getting glossed over. You can set your sale price of US real estate in any currency you want. Swedish Kroner or Mexican Pesos or Euros or Bitcoin or whatever. But all income generated in the US has to be reported to the IRS, right? So what difference does it make what currency you list at or sell in? Will the IRS require that you use the Bitcoin exchange rate on the day of sale or whatever rate you feel is fair? Is there any evidence out there that you don't owe taxes until you "cash out" by liquidating Bitcoin? Does anyone really think the IRS will treat Bitcoin like 1031 exchanges? C'mon BP Nation. Think.
Major retailers are NOT yet accepting Bitcoin. Gyft.com will accept Bitcoin and issue gift cards to major retailers. Which is hardly the same thing as Sears accepting Bitcoin and letting you walk out with a new power drill. Gyft has decided that they can handle the exchange risk. Not Sears.
When I can buy my entry to TED Conferences and pay for my Burning Man tickets with Bitcoin, then I'll know it's here to stay AND too late for me to profit on it.
It is no different than trading in any other currency. You will be subject to taxation no matter what on your worldwide income.
You can use the published average daily exchange rate, but good luck with the value change of what essentially moves like a penny stock.
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