Bitcoin is huge right now. Despite dizzying highs and terrifying lows, the money of the internet seems to show no signs of slowing down. From internet purchases to Las Vegas strip clubs, it seems there’s no end to what you can purchase with Bitcoin. But can you buy a house with Bitcoin? Actually, yes you can.
Cryptocurrency seems to be the next big thing in finance. There are literally dozens of cryptocurrencies in existence and more are popping up on almost a daily basis. None are as well-known as Bitcoin.
Though it has yet to establish a strong foothold in mainstream financial transactions, more and more businesses and industries are jumping on the bitcoin bandwagon. Some see cryptocurrency as a fad. Others as more of a commodity or an asset than a true currency.
A Brief Explanation of Currency
Can you buy a house with Bitcoin? First, let’s examine how Bitcoin works. Because Bitcoin is a decentralized currency, the value is somewhat subjective. The US Government, for example, does not value Bitcoin the same way it values US dollars. US dollars are used to pay US taxes and thus, have value.
US currency is based on the “fiat” system which is Latin for “let it be done.” Fiat money is declared legal tender by the government, but not backed by any physical product. One US dollar, for example, is worth about 5.4 cents of paper and ink. The value is established by regulation rather than the intrinsic value of the note.
Bitcoin operates on the sidelines of global commerce. Generally speaking, governments aren’t a big fan of cryptocurrency and are looking for ways to regulate them, despite the fact that the US Government is one of the largest holders of them.
As such, buying a home with bitcoin may be difficult, but not for the reason you might think.
Can You Buy A House With Bitcoin?
According to CNBC, there’s really only one thing standing in the way of purchasing a home, or any property with Bitcoin: a willing seller.
Currently, there’s nothing to prevent a homeowner from trading their property to you in exchange for Bitcoin or other cryptocurrencies. However, because Bitcoin’s value is volatile, finding a willing seller may prove difficult.
Because Bitcoin is decentralized, much of its value is derived from the scarcity (there are only so many Bitcoins released each year), and the perceived value of those who trade in it.
At one point, Bitcoin soared to nearly $20,000 per coin. Today, it sits at $10,741.60. That’s still great news if you were lucky enough to buy Bitcoin when it was only a few pennies each. However, not all experts believe that the future is bright.
Unlike US currency, the value of Bitcoin can change rapidly. Homeowners may be wary to enter into an agreement with the knowledge that Bitcoin may lose value. If you sold a home for 100 Bitcoins when they were worth close to $20,000; you made nearly two million dollars on the sale. Today, you’ve lost almost half of that value.
Can you buy a house with Bitcoin? You sure can. Just find a seller willing to do so. Should you? That’s another question. For now, you may be better off with purchasing a home the old-fashioned way.
Need Some Tech With Your Home Purchase?
If you feel the need to incorporate technology into your home-buying experience, download the City vs City app. We don’t operate on block-chain technology like Bitcoin, however we can show you the true cost of living in your city.
No matter how you plan on purchasing your home, it helps to know what you’re getting yourself into. One the sale is complete, your cost of living doesn’t run on Bitcoin. City vs City calculates the cost of living in real dollars at the zip-code level. We examine your after-tax income, household expenses, state and local taxes, and more.
City vs City stacks up two cities side by side and compares the cost of living between them. Which one comes out ahead? Download the City vs City app and find out.