Blockchain and cryptocurrency are slowly taking over the existing digital modes of payment and other financial transactions. With this ‘digital money’ dominating several industries in the world of business, the impact of cryptocurrency on commercial real estate is inevitable. We will discuss the concept of cryptocurrency and how it is impacting commercial real estate investment in this article.
What is Cryptocurrency – The concept
Today, we have started getting familiar with cryptocurrency and the impact of cryptocurrency on real estate, especially commercial real estate. Before we jump into discussing this, let us try answering the question of what is cryptocurrency.
So, What is Cryptocurrency?
Cryptocurrency, simply put, is nothing but digital cash, also known as a digital currency. Otherwise called crypto, it can be used in exchange for goods and services. The concept of cryptocurrency or digital cash uses a ledger system that is based on blockchain technology to record transactions. Blockchain is a ledger enforced by a disparate network of computers. It ensures the integrity of transactions by keeping tabs on them and keeping them secure with advanced cryptography technology.
Companies can issue their own cryptocurrency, which is called a token. Tokens issued by a company can be traded for goods and services offered by that particular company. The crypto-concept is completely digital, and of course, you need to exchange money in order to buy crypto-tokens.
One of the highlights of cryptocurrency is that they have their autonomy – they are a decentralized, transactional concept having no hold by the government. Only the respective companies have the authority to issue these tokens.
This is what is cryptocurrency – the next level of digital money. There are different types of cryptocurrencies, including Peercoin, Bitcoin, Namecoin, Ethereum, Cardano, as well as EOS. However, Bitcoin, one of the first blockchain-based cryptocurrencies, remains the most popular to date, with a total market capitalization of $1 trillion, according to nerd wallet. Bitcoin is so popular that it is almost synonymous with cryptocurrency and blockchain technology.
Today, cryptocurrencies are fast-growing and slowly creeping into various industries as a mode of transaction, and real estate is no exception. The impact of cryptocurrency on real estate is very apparent at present, and we will go a little further and discuss the impact of cryptocurrency on commercial real estate.
Benefits Of Blockchain Technology And Cryptocurrency
Cryptocurrency and blockchain technology are slowly taking over the world of digital finance and the impact of cryptocurrency on real estate, especially commercial real estate, looks inevitable.
Before we move on to discuss the impact of cryptocurrency on commercial real estate, let’s consider the benefits of blockchain technology and cryptocurrencies today.
1. Transactions Made Easier
Transactions are more straightforward with cryptocurrency and blockchain technology as it takes place digitally and hence does not involve the need for middlemen. Transactions with cryptocurrencies will take place one-on-one over an extremely confidential and secure network.
2. Secure and Confidential Transactions
Information on transactions done through cash or credit will be recorded and available on the server to the banks. With cryptocurrency, you can choose what information you want to disclose to the recipient. Your identity will be protected at all costs, and every transaction carried out is independent and unique.
3. Possibility of Asset Transfers
You can use cryptocurrency to transfer ownership of assets from one party to another easily. This is made possible by the option to pay the seller using bitcoins. These transactions happen within the blockchain system and are carried out in the safest and most secure way, making it a viable option to buy and sell assets quickly. This is one of the reasons for the impact of cryptocurrency on real estate.
4. Decentralised Way of Handling Finances
As established earlier, cryptocurrencies are managed by blockchain technology, which is not accountable to any government or a central organisation/authority. This makes the system decentralised, i.e., a crypto transaction will only involve two parties – the seller and the buyer.
5. Low Transaction Fee
When you deal with cash or credit transactions, the transaction fee per transaction is considerably high. In the case of crypto-transactions, the crypto network dealing with your transaction will compensate the data miners involved. Therefore, crypto transactions usually involve little to no transaction fees.
Now that we have highlighted the benefits of cryptocurrencies and blockchain technology, let us discuss the impact of cryptocurrency on commercial real estate.
The Impact of Cryptocurrency on Commercial Real Estate
Blockchain technology is predicted to have a lasting impact on the way real estate transactions are made. With that established, the impact of cryptocurrency on commercial real estate does not go unnoticed.
Commercial real estate is going through a phase of steady growth, and with the advent of cryptocurrency and blockchain technology, commercial real estate investment has only become more straightforward.
The following are the impact of cryptocurrency on commercial real estate investment:
1. Quicker Transactions
Cryptocurrency and blockchain technology do not involve any middleman, as they are a decentralised concept of digital finance. The buyer and seller are the only two parties involved in the transaction, making it one of the quickest transaction modes.
The absence of middlemen in crypto transactions can be highly beneficial for real estate investment, eliminating possible delays and complications in the investment process, which is the most positive impact of cryptocurrency on commercial real estate.
2. Smarter Processes
Crypto transactions are completely digitalised. They also offer smarter and faster ways to process and manage contracts, which is something that will accelerate the process of closing a commercial real estate deal, as the sale or the lease agreement is automated, and payments are also instant. The concept of blockchain also makes identity verification and background checks easier and faster. This is another great impact of cryptocurrency on commercial real estate investment.
3. 100% Privacy
As discussed earlier, crypto transactions are secured by highly advanced cryptography technology that keeps these transactions secure and confidential. Moreover, when involved in crypto transactions, you have the authority to choose what information about the transaction you want to disclose to the recipient, and even better, your identity is 100% safe.
Privacy and security are always a concern when it comes to monetary transitions, and cryptocurrency helps negate this worry in the minds of both the sellers and the consumers. This is a big advantage in commercial real estate transactions as they involve several documents and huge sums of money.
4. Easy Liquidation of Assets and Transfer of Titles
This is probably the biggest impact of cryptocurrency on commercial real estate. Quick liquidation of assets has always been a challenge for investors looking to reinvest or simply diversify their portfolios. If you are to make this move through the ledger that blockchain is, it makes it all the simpler for you to liquidate your assets. All you need to do is register your investments on the ledger, and it has the potential to simplify the liquidation process.
In addition to this, as established earlier, in the benefits section, cryptocurrency also makes the transfer of titles easier as the technology eliminates the lengthy traditional process.
These are a few pointers that address the impact of cryptocurrency on commercial real estate. The intervention of blockchain technology in commercial real estate transactions visibly has the scope to make them safer and more secure. So, if you are looking to make a commercial real estate investment, you might want to consider adopting the crypto-mode to carry out your transactions!
Disclaimer: We advise you to consult a blockchain expert, learn everything there is to know about the concept and the impact of cryptocurrency on real estate before you go ahead and invest in property through crypto transactions.
Are you looking to invest in a commercial space in Chennai? Consider Market of India, India’s largest wholesale and retail marketplace. Read on to learn more about what Market of India offers for traders and businessmen.
Market of India – India’s Largest Wholesale and Retail Marketplace
Located within SPR City, in the heart of Chennai, Market of India offers commercial spaces for sale. They offer an array of spaces, including wholesale, retail, office, and commercial spaces for sale.
Market of India is an organised marketplace that brings together Chennai’s major trade hubs, including Koyambedu, Sowcarpet, Richie Street, Mint Street, and more, under one single roof. It is a first-of-its-kind marketplace that acts as an extension of 9+ major trade hubs of the city.
Reasons to Invest in a Shop in The Market of India:
> Market of India offers wholesale, commercial, retail, and office spaces for sale in Chennai.
> Take your business to the international stage with Market of India’s opportunities to network with prominent traders and logistics partners from across the globe.
> Run your business in a major commercial hub that expects 40,00,000 potential footfalls per month, along with state-of-the-art amenities like advanced security, 24 access points, a food court, and more.
> Market of India is the one-stop solution for all your commercial and business needs
If you are someone with experience in handling crypto transactions, let us know your experience in the comments section below!
FAQs – What Is Cryptocurrency & Its Impact on Commercial Real Estate
1. How is cryptocurrency affecting real estate?
Cryptocurrency is affecting real estate in a positive way. Cryptocurrency is nothing but digitalised tokens with monetary value that can actually be used to purchase real estate properties. The blockchain technology has provided a new means for investors to buy real estate.
2. Is investing in real estate better than cryptocurrency?
It depends on what you can afford. Commercial real estate is one of the safest and the most secure investments that guarantee you consistent returns for a long period of time. On the other hand, cryptocurrency is low-maintenance but a high-risk investment that is highly rewarding. You can choose to invest in either of them based on the risk you are willing to take and the money you have to invest.
3. Why should you invest in real estate rather than cryptocurrency?
Real estate, though a conventional form of investment, is one of the safest and most secure forms of investment one can make. This is simply because of the possibility of guaranteed consistent returns. Investment in real estate also involves lesser risk. For these reasons, investing in real estate is better than making an investment in cryptocurrency.
4. What will be the future of cryptocurrency in India?
Despite the risks involved in the use of cryptocurrencies and making crypto investments, millennials in tier II and tier III cities are boldly venturing into the world of cryptocurrencies. For this reason and more, cryptocurrency seems to have a strong future in the country. If the government takes the right steps toward laying ground rules and regulations in this field, then cryptocurrency will have carved itself a permanent space in the country.
5. Which investment provides better ROI, cryptocurrency or real estate?
Cryptocurrency dealings and investments involve high risk but yield better than real estate. With easier liquidating properties and speediness in transactions, cryptocurrency offers a better ROI compared to real estate. Despite the high risks involved, cryptocurrency-based investments are worth investing in.