Expert panelists join the latest episode of Keepin’ It Real with Nick Bailey to explore how the modern landscape of financial innovators like cryptocurrency, blockchain technology, NFTs, and even the Metaverse, are changing traditional real estate.
From TV commercials to news headlines, the subject of cryptocurrency – and affiliated ventures – is popping up everywhere. And for consumers and specialized analysts alike, the new-age digital landscape of currency is rather complex to understand.
The use of digital currency is on the rise in the real estate market, acting as a medium recognized in countries around the world that traditionally exchange with differing physical forms of money. But with more and more consumers pursuing transactions with crypto – or even an NFT (non-fungible token) – as their preferred funds, now could be the right time for real estate professionals gain a better grasp on what it all means.
On the most recent episode of Keepin’ It Real with Nick Bailey, panelists Tony Giordano, entrepreneur, cryptocurrency expert and CEO of Giordano Industries, and Sam DeBord, CEO of RESO (Real Estate Standards Organization), join RE/MAX, LLC President and CEO Bailey to explore all things digital currency, including cryptocurrency, the Metaverse, blockchain technology and NFTs. Most importantly, the three unpack the impact these entities have on real estate.
For those unfamiliar with these terms, here’s a quick overview. Simply put, cryptocurrency is a digital currency mined virtually (think: Bitcoin) and a blockchain is the technological system that supports cryptocurrencies and acts as a digital ledger. While a few types of crypto have joined everyday vernacular, there are actually thousands of cryptocurrencies and counting.
“Bitcoin, Ethereum, Litecoin, Web3 [and the] Metaverse [are] the next evolution of the internet… The actual internet will be third dimensional,” Giordano predicts.
To kick off the conversation, Bailey asks: How are these factors affecting real estate? And what is the next evolution of monetary value?
Where does crypto originate?
Giordano breaks down the process of mining for specific currencies by comparing it to how tradition money (like U.S. dollars) are printed and assigned value.
“It’s the exact way we think of gold,” he says. “So, let’s not forget our cash is a glorified IOU from the [government]… Just like mountains are mined for gold and the value is given to it from humans because of how hard it is to find and the resources it takes to find it, Bitcoin is in the ‘digital mountains.’ And because they mined for these astronomically long numbers called hexadecimals, when they find one, [we] give it its value just like gold.”
How does this relate to business?
To accommodate the increasing interest from consumers, DeBord suggest agents prioritize becoming familiar with the process of using digital currency to buy a home.
“The technology does have opportunities to do things that we haven’t been able to do with traditional technology,” DeBord explains. “We have a distributed ledger blockchain workgroup at RESO that looks at different ways that we could democratize data [and] make it more available in this fairly decentralized industry, with the way we work with brokers and associations and MLSs. And so, there are opportunities and tradeoffs in the technology, but I think for most folks, they just want to talk about: What does it do for my business? Are my customers going to come ask me, ‘Can I list a property for crypto? Can I buy a property with my bitcoin?’ And you should have concrete answers for that.”
Bailey notes that, being in its early stages, the role of crypto in real estate right now is a bit of an uncharted territory like the “wild west.”
Despite many still being unfamiliar with its concept and uses, crypto is already present in the real estate space. Though, according to Giordano, it’s so valuable right now that consumers may want to think twice before using it to buy a home. Instead, he shares, some banks are giving out loans based on one’s crypto assets.
How would a transaction in crypto affect the agent?
The answer to this could vary depending on the agent’s willingness to learn more about digital currencies. In Giordano’s experience, there are transactions where companies involved are paid in traditional currency, like U.S. dollars, while the home itself is purchased in Bitcoin.
For an agent’s clients, however, options like an NFT and other digital tokens could become the norm for simplifying the process of legally transferring the deed of a home from seller to buyer. While Giordano believes that all real estate will be recorded on a blockchain within the next decade, DeBord is skeptical that change will happen swiftly.
“I don’t think anybody was probably very optimistic about the speed of [the] government to adopt new technology. But that being said, will there probably be this layer of organizations tokenizing properties [and] having digital deeds? Maybe, but they also still need to be recorded through government agencies,” DeBord says. “Is it more efficient? Probably – it’s probably better if we could use more technology. And I think, importantly, that when we’re talking about public records from government agencies, transparency there should be key. That’s really what we’re looking for.”
DeBord hopes the evolution and adoption of new technology will ultimately help create more transparency and fix accuracy issues in the current ways real estate listings are presented online.
For a deeper dive into the relationship between digital currency and real estate, and the debunking of more crypto-related myths and rumors, tune in to the latest episode of Keepin’ It Real with Nick Bailey.
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