What you should know about (digital) money
In December 2021, virtual real estate developer Republic Realm paid a record-setting US$4.3 million for acreage in Sandbox. In the world of cryptocurrencies – also known as digital money like Bitcoin or Ethereum – investors can buy virtual homes with virtual cash. Cryptocurrencies are also used to buy and sell products, invest, and grow wealth by trading or exchanging over the internet. Trading property with digital money benefits buyers and sellers alike.
The importance of blockchain
Blockchain is the tech that safely stores information about cryptocurrencies and trades in chronological order. That ensures there is a record of exactly what is traded when and by whom, because numbers are assigned to each user of the blockchain. This disclosure of ownership promotes transparency and cannot be tampered with or changed.
Cryptocurrencies and blockchain benefit the real estate industry by decentralizing, reducing liquidity risks, and levelling the playing field as regards financial corporations. What’s more, transactions can be faster, closing costs reduced, and efficiencies enhanced in verifying legal documents and financing property.
Show me the money
In May 2021, a 5,067-square-foot Miami penthouse smashed the record for the above-mentioned Sandbox deal. It sold via cryptocurrency for US$22.5 million. Four months later it was back on the market for $27.5 million. Nobody knows why. The developers, Alex Sapir and Giovanni Fasciano, are said to have partnered with blockchain and securities trading platform SolidBlock as a marketing strategy to trade real estate.
