As Bitcoin and other cryptocurrencies surge in popularity, it is inevitable that they are going to permeate ever deeper into our everyday lives.
In the beginning, Bitcoin was most closely associated with the dark web and many have dismissed it – then and now – as being fit for use only by those who inhabit the murkier corners of the internet. Just last week the JP Morgan CEO Jamie Dimon labelled Bitcoin suitable only “if you were in Venezuela or Ecuador or North Korea or a bunch of parts like that, or if you were a drug dealer, a murderer, stuff like that”.
His comments are proof that many, particularly those at the heart of the financial establishment, believe – or perhaps hope – that cryptocurrencies are a passing fad.
The evidence suggests that Dimon is unlikely to get his wish any time soon. Whilst the cryptocurrency market remains highly volatile and thus far completely unregulated, more and more individuals, businesses and even countries are becoming wise to this seismic shift in global finance.
Mass adoption is accelerating through the gears and already it is possible to buy flights, consumer electronics, theatre tickets and even beer using the bitcoins in your digital wallet. And now, the property market is getting in on the act too.
Homes for Coins
Earlier this month Lady Michelle Mone, the founder and former CEO of luxury lingerie brand Ultimo, announced her latest business venture – a £250 million property development in Dubai. The Aston Plaza development boasts over a hundred apartments, along with a shopping mall and leisure complex – just what could be expected from such a scheme. The real talking point is that the apartments can be bought using bitcoins.
According to Baroness Mone, 50 bitcoins will buy you a one bedroom, 100,000 square foot apartment valued at $240,000. For those after a little more, a two bedroom, $380,000 pied-a-terre is yours for 80 bitcoins. The scheme is apparently the brainchild of Mone’s partner Doug Barrowman and
the first time any development has been sold in Bitcoin.
Mone may have been right about this at the time, but it seems that others, albeit on a smaller scale, are now jumping on the bandwagon. And it’s not just those wishing to buy properties either – a developer in London recently announced that it would accept rent from its tenants in bitcoins. With a judge in Texas ruling in August that Bitcoin is indeed a currency under law, there does not seem to be any sign of this rush slowing down.
On the face of it, this all looks like the usual course of progress, with people scrambling to become the early adopters of a new way of doing business. But there is an underpinning factor to all of this. With Bitcoin and its closest rival Ethereum (along with all other cryptocurrencies in existence) being run using blockchain, the potential is there for this new technology to revolutionise the way properties are bought and sold.
The use of Ethereum smart contracts is being touted by many as a way of cutting through the logjam of lawyers, documentation, deposits and bankers that can make purchasing a property such a convoluted and time-consuming process in many countries. Ethereum is strongly positioning itself as the leader in this form of contract between individuals with its less restrictive coding and the signs are that properties could soon be exchanged between parties without the need for legions of middlemen.
Cryptocurrencies remain volatile and unpredictable, yet their adoption is gathering pace by the day. Those like Dimon who see them as ‘a bubble’ are in danger of finding themselves left behind.
The shifting of Bitcoin from the dark web to the property market has been swift and instructive: once used to buy drugs and guns, it’s now putting roofs over our heads.
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