The emergence of blockchain technology has been one of the most phenomenal advances in the digital industry in the 21st century. Bitcoin has emerged as the king of cryptocurrencies, gaining popularity and preference among young investors who view it as the future of investments. Investments in Bitcoin and other cryptocurrencies have doubled from 2% to 4% in just a year, according to a report from Bankrate in 2019. It also showed that 31% of people belonging to all age groups thought that real estate was the way to go when asked where they would invest money they wouldn’t need in 10 years or more.
However, when it comes to Millennials, 45% of them prefer Bitcoin investments over stocks, real estate, and even gold! Millennials seem to trust blockchain and the technology behind it, and consider it to be the future of investing. It also shows that Bitcoin is very-well positioned to be adopted by many as a long-term store of value. Bitcoin is only 10 years old and a relatively small asset when compared to real estate, which has been around since time immemorial. However, is it possible to combine the two?
Yes. It is possible to get the best of both worlds, thanks to the seamless integration of blockchain and real estate in the last couple of years. This beautiful amalgamation of two of the most popular investment choices is ‘real estate tokenization’. The blockchain and the real estate worlds are deeply intertwined. The possibility of purchasing a property with cryptocurrencies such as Bitcoin has been around for a while, however, blockchain technology has a larger potential to transform the industry as a whole.
Millennials now have the opportunity to take advantage of the convergence of the blockchain and the real estate world. There are two ways to go about it:
- Buying real estate directly with Bitcoin
This is a simple, well-known method, like any other transaction made in the blockchain world. Bitcoin is a digital decentralized payment system, with each user having their anonymous address and traceable transaction history. Mutual agreement between two parties is the only thing needed to validate a transaction. One of the many advantages of buying real estate using Bitcoins is the amount of time it takes. Once documents are signed, transaction completion takes anywhere between 10 minutes to 24 hours, depending on the network congestion. There is no need for a banking system, which is ideal for millennials as 47% of them trust Bitcoins over big banks.
- Real estate tokenization
Only a few assets are more illiquid than real estate. To sell a property worth $20 million, you have to find a buyer with $20 million to spare. However, when you split that amounts into smaller, more affordable digital tokens that can have multiple buyers, you have successfully tokenized real estate. It has even been claimed that tokenized real estate was built on a foundation of Bitcoin, with examples tracing back to 2017. The main takeaway is that for some time, real estate purchases were possible entirely in Bitcoin, and now with the emergence of real estate tokenization, millennials have the option to make the most of both Bitcoin and real estate.
Many claim that blockchain and real estate were made for each other. This claim is turning into several success stories as more and more millennials switch to crypto investments over traditional investments such as stocks and gold. Real estate has been considered to be a capital-intensive investment for a long time. However, its integration with blockchain has given it a niche over its counterparts. One thing, however, is clear- both Bitcoin and real estate are here to stay.
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Millennials Prefer Bitcoin Over Real-Estate. Why Not Give Them Both? was originally published in Data Driven Investor on Medium, where people are continuing the conversation by highlighting and responding to this story.