Digital dollars ‘bitcoins’ can be used to buy just about anything – even houses, it seems.
The bitcoin has gained a foothold in one of the hottest business sectors in the world: Manhattan real estate. But are we ready to accept bitcoin as payment for property at the Gold Coast?
Bond New York, a Manhattan-based real estate broker, has started accepting the digital currency for real estate transactions, the New York Post reports .
Bond New York believes it is one of the first real estate brokerage firms in the US to accept bitcoin.
“Real estate brokerage is a service industry,” said Noah Freedman, a co-founder of Bond New York.
“Our job is to make real estate transactions easy for our customers. Bitcoins are just another mechanism to help people facilitate transactions.”
Several larger real estate brokers are not sold on the idea and have no plans to set up bitcoin accounts any time soon.
“We don’t accept them, and we have no plans to accept them,” Pam Liebman, CEO of the Corcoran Group, said Friday. “We prefer the American dollar.”
“Bitcoins could be here today and gone tomorrow,” Ms Liebman explained.
“How do you trade them? What happens if people decide not to accept them anymore?”
Howard Lorber, President and CEO of Vector Group and chairman of Douglas Elliman, a Vector subsidiary that is the largest real estate brokerage in the New York area, agreed.
“We’ve never had anyone ask to use them, and we wouldn’t accept them,” Mr Lorber said.
While bitcoins trade on a few small exchanges, Mr Lorber said that one of the main problems is that there is no government “to step in and take care of problems” when they arise.
BITCOINS AS PAYMENT FOR AUSSIE HOMES?
Last month a Perth Hills home was listed for $1.4 million requesting bitcoin payment only. The sale would make the property the first in Australia to be sold for digital dollars.
But even bitcoin enthusiasts are shocked by the offer, as the value of the currency fluctuates wildly.
The price of a single unit, which can be traded in online exchanges or “mined” through powerful computers that crack complex algorithms, has surged tenfold since the start of the year, hitting a high of more than $1000 late last year before falling heavily.
Bret Treasure of the Australian Web Industry Association and a board member of Bitcoin Australia, believes it’s the first bitcoin house sale in Australia.
“The seller obviously believes the value is going to appreciate because to mine that much bitcoin you would need a bloody supercomputer,” he said.
Mr Treasure’s son, Leo, 28, last year took out a $20,000 loan to buy bitcoins.
He now owns “a bit over 1000” bitcoins, worth about $750,000.
He is also importing Australia’s first bitcoin kiosks, which will allow people to exchange cash for bitcoin.
UWA Winthrop Professor of Economics Ken Clements said the bitcoin’s long-term viability would be determined by its rate of inflation.
“It’s uncertain what their supply is going to be in the future, so it’s uncertain what their value is going to be,” he said.
WHAT IS BITCOIN?
Bitcoin is a decentralised digital currency launched in 2009 by a programmer who goes under the pseudonym Satoshi Nakamoto. It can be exchanged through a peer-to-peer network without the need for a financial institution.
WHO ISSUES BITCOINS?
Bitcoins are not issued from a central bank in the same way as dollars are printed. Instead, the currency is awarded to users of Bitcoin software, known as miners. The miners use computers to perform complex calculations which are needed to confirm Bitcoin transactions.
HOW DO YOU BUY BITCOINS?
Bitcoins can be bought from currency exchanges for those who don’t have computer hardware to mine for the currency. These exchanges allow users to buy and sell bitcoins for other real world currencies.
WHAT ARE THEY WORTH?
Fuelled by speculators, the value of Bitcoin fluctuates wildly. In late November the price surged to more than $1000 (AUS) per Bitcoin, more than 10 times its value at the start of the year. As of Friday, a single Bitcoin cost about $750.
WHERE CAN YOU SPEND THEM?
Bitcoin can be used for private transactions between users, but many businesses are also adopting the currency.
Original article published at www.news.com.au by Jennifer Gould Keil, News Limited Network 7/1/2014