Cape Town - Digital currencies are changing the way we spend money and cryptocurrency and NFTs are changing the real estate market abroad and could do the same in South Africa.
In America, the real estate market is already being changed by financial innovators such as cryptocurrency, blockchain technology, NFTs, and even the Metaverse, says Re/Max LLC.
South Africans, believes Re/Max Southern Africa CEO Adrian Goslett, are however “still quite far away from trading cryptocurrencies for homes as the norm".
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He believes there would have to be “greater and more equal opportunity to access technology before crypto can really take off here”.
However, Goslett believes it is always useful to stay informed “so that you can be prepared for whatever might lie ahead".
While cryptocurrency is already present in the real estate space in some places across the globe, Tony Giordano, entrepreneur, cryptocurrency expert and CEO of Giordano Industries, says crypto is “so valuable right now” that consumers may want to think twice before using it to buy a home.
Instead, he says, some banks are giving out loans based on one’s crypto assets.
To accommodate the increasing interest from consumers, Sam DeBord, CEO of RESO (Real Estate Standards Organisation) suggests agents prioritise becoming familiar with the process of using digital currency to buy a home.
“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.”
Nick Bailey, Re/Max, LLC president and CEO in the USA, notes that, being in its early stages, the role of crypto in real estate right now is a bit of an uncharted territory.
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, but there are still challenges to overcome before this can happen.
For now, it is worth just taking the time to understand what sorts of cryptocurrencies exist and how at all works.
For those unfamiliar with these terms, cryptocurrency is a digital currency mined virtually 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.
Giordano breaks down the process of mining for specific currencies by comparing it to gold mining. “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.”
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