Buying Property With Bitcoin
According to the CoinDesk's report, Bitcoin Price Index today is worth more than $600 million in market values. Milano Home Cyprus too is trying to introduce Bitcoin market to enable investors and buyers purchase properties in Northern Cyprus.
You've seen it on the news, the online stock markets and even some of your friends may have even invested in it. But what is bitcoin exactly? Short answer is a cryptocurrency which does away with a central bank and uses encryption techniques to regulate international funds. No third party is involved, so buyers and sellers can make transactions directly on their own.
How Does It Work?
Bitcoin is an internet-based which is a decentralized payment system. Each user has an anonymous address, and you can trace every bitcoin's transaction history. This modern paperless money system uses blockchain technology, a database that co-exists in several locations and is shared by the community. "This latest structure makes it incredibly resilient because there is no central point of failure that can be attacked," says Chris Merrett, bitcoin consultant at Meritorious Consulting. "If certain nodes of the network are attacked successfully, the other nodes in the network can adapt similarly to the human immune system adapting to a new virus."
How Is It Taxed?
Taxes depends on the country's law that has implemented eCommerce and internet markets include Bitcoin like in Central Europe, where Northern Cyprus is part, but not yet regulate. In countries like the U.S., the IRS stated they consider it for purchasing property, and every transaction needs to be calculated as a capital gains tax," says Jake Bryan, bitcoin consultant.
How Do You Purchase?
You only need one thing — for two parties to agree on the transaction. "I recently paid for my doctor's consultation in bitcoin because my physician is also a bitcoin investor," says Jake. Bitcoin's enthusiasts are purchasing a wide variety of items with their bitcoins, from pizzas to real estate.
The first real estate transaction was a single-family home in Austin, Texas. The seller wanted the bitcoins converted to dollars, so they used BitPay, a global bitcoin payment service provider, to complete the transaction. Bitcoin's value fluctuates every day, so the risk is on the buyer's side since the seller agreed to a fixed dollar amount.
"The pros of buying real estate with bitcoin is that once everything is signed, the transaction completion time takes 10 minutes to a day depending on network congestion," says Jake. "Think about that for a second — no need for the banking system. You can pay for the house, the realtor and anyone else at the same time."
However, make sure you trust the second party if you're thinking of buying into real estate. "If you want to reverse the transaction due to any litigation, then you need both parties to be compliant," says Jake. "Bitcoin transactions are not reversible."
You can't buy a house with a mortgage payment — yet.
Ethereum, a cryptocurrency similar to bitcoin, is one built on making smart contracts. "I envision having open-sourced mortgage contracts that parties would interface rather than using the traditional contract," says Jake. "Smart contracts are self-enforcing mediums, so no third party is necessary once the mortgage contract is cryptographically signed."