A family home in Essex has become the first property in the world to be sold for bitcoin. The four-bedroom property is still under construction, but when complete, its new owners will take possession knowing they haven’t parted with a physical penny for their purchase.
Bitcoin is a cryptocurrency, a digital asset that only exists online works without a central bank. The worldwide payment system is a peer-to-peer network with all transactions taking place directly between buyer and seller using encryption and then recorded in a database known as a blockchain.
Bitcoin was invented as open-source software in 2009, with its value rising from an initial 30 US cents to $1,000 at the start of 2017 and then a high of more than $19,000 by December 17, 2017.
Fixed price set
However, because of those extreme fluctuations in its value, the first UK bitcoin residential property transaction has been set for a fixed price of £350,000, and on the day of completion, the value of bitcoin will determine how much of the cryptocurrency is to be transferred to the developer of the property in Colchester.
According to the report in the Mirror, the Land Registry will also allow the property’s new owner to have the sale price recorded in bitcoin rather than sterling.
Meanwhile, a penthouse in Miami has gone on the market with the seller only willing to accept payment in bitcoin.
The one-bedroom apartment is in a building with a spa, pool and fitness centre and has views of the Miami skyline. Its seller wants 33 bitcoin in exchange for the property. With the daily fluctuations in bitcoin’s value, that means he or she could pocket anything from half a million dollars to more than $630,000.
Rewriting the rule book
Ed Casson is group sales director of Go Homes, the developers selling the Colchester property for Bitcoin. He told the Mirror: “This rewrites the rule book and shows there is another way to sell property.
“Globally this is the first time a domestic property has been sold for bitcoin. It’s a bit of history in the making. Selling homes for bitcoin will become common in the next five years. Our industry has largely remained unchanged in terms of innovation in the last 50 years. We are taking an opportunity to embrace this technology.”
Property transactions using bitcoin will necessarily involve greater due diligence on the part of the seller, in part because the currency’s value is so volatile.