September 4, 2021
Is using cryptocurrency to buy real estate in Dubai the real deal? Bitcoin is exploding all over the markets in 2021, and we say it in the most positive light.
Dubai has finally embraced cryptocurrency reality and is shifting to digital investments. Bitcoin is now fueling demand for real estate assets, attracting investors who are looking for a faster, safer way to transfer property deeds from one party to another. Cryptocurrency real estate transactions are now possible in Dubai under the guidance of a licensed broker. Several developers are currently accepting Bitcoin payment if licensed brokers are managing the transaction process.
While it is still a new concept, the market is now fully able to conduct such transactions. The system fully integrates with bitcoin technology, delivering a simpler and faster experience for buying real estate. Until recently, it was unthinkable to buy a villa or apartment with digital currency. However today, it is turning many dreams into reality. The Chinese investors are one of the first to trade in cryptocurrency, and this is now evident in the Dubai real estate market. Digital managing of rental real estate, and even tenant-related matters are now part of the blockchain reality. The technology has a lot of potential and is here to stay.
Using cryptocurrency to buy real estate in Dubai requires ample initial research
Digital currency and blockchain technology can sound intimidating and raise a lot of doubts if you don’t understand the concept and are not familiar with all the particulars. However, to keep it simple, we will call it digital money and digital wallet. There are currently more than 5,000 digital currencies circulating, but many are most familiar with Bitcoin and Ethereum.
Bitcoin came on the market in 2009 and is still a strong performer for buying goods, stocks, and other services. Because the currency is fully digital and there is no physical bill, the owners store their cryptocurrency in a digital wallet and use it when they wish to buy or sell. Furthermore, all transactions take place via an online exchange platform. The electronic payment system obviously does not issue a standard receipt for the transactions, but rather cryptographic proof. The Bitcoin network stores all transactions which are available to the public and fully traceable. The blockchain programme records and verifies all these transactions accordingly.
Additionally, the digital world of cryptocurrency is decentralized, not fully backed up by a central bank like the American dollar, for instance. Cryptocurrency has no central authority to regulate and manage its value. Therefore, its value will be maintained by the users themselves, on the blockchain.
Blockchain offers a whole new dimension for users of digital trade. It is simple, straightforward forward and above all, safe. Moreso, it eliminates bank charges, additional fees and saves a lot of time for shifting money abroad. Digital transactions take a few minutes to complete, unlike banks or lawyers who still apply lengthy protocol and bureaucracy. The blockchain system will soon remove the “middle man” from the transactions since it uses tokenization of real estate assets.
Many countries consider new legislation and implementing changes around tokenization of real estate assets, thus creating a user-friendly platform on the blockchain.
The process refers to the division of a property into digital shares or digital assets on the blockchain. The digital assets can take the shape of any other real-world assets such as funds, revenue, or property. Once the assets are tokenized, multiple individuals can enjoy ownership fractionalization by division, and most importantly, in an equal manner. For instance, many couples or even companies invest in real estate together but often do not pay an equal share. Blockchain technology and tokenization are changing this reality into a fairer scenario where each of the investing parties can own the correct fraction of the property.
Due to equal ownership, blockchain brings broader access to global asset distribution and a larger number of investors.
Each and every cryptocurrency transaction is recorded on the blockchain and has to be verified by the system. The blockchain functions as a decentralized ledger for each transaction and is a public database available to all crypto users. However, users’ personal data and individual transaction information are secure thanks to cryptography. Furthermore, in order to prevent fraud, each transaction has a digital validation and is fully traceable via data accessibility.
It is next to impossible to hack bitcoin transactions due to blockchain technology, experts say. Taking over a network of computers running 24/7 involves a huge cost and breaching the security protocol is a highly complex operation. However, there is always a potential risk people associate with the use of digital currency.
Below, we look at some facts.
As with most digital platforms, users always run the risk of network errors, inaccuracy, and technical glitches. So, if that is the case, how do you access your bitcoin records and digital wallet? Bitcoin is not a physical entity. It is not money. Furthermore, because it is not regulated or centralized by governmental bodies, it can never retain its value. Actually, it has no unique value, only that which is conferred to it by users. With the market being so volatile, so are cryptocurrencies. If the market fluctuates, it is very common for bitcoin to experience sudden drops in price. Cryptocurrencies can drop in value by equivalent of thousands of dollars.
There are legitimate fears and doubts in using digital transactions, and it makes you wonder if your digital “bitcoin wallet” is ever safe? If traditional currencies ever drop flat, the central bank would immediately step in by means of holding palpable assets in order to facilitate recovery. In the case of Bitcoin, no such thing would ever happen.
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