Do you invest in Bitcoin / Cryptocurrency?
New to Real Estate · Plantation, FL · Member since 2018 · 41 posts · 46 votes
I'm just curious how many other active REI also invest in cryptocurrencies? And if you do, what kind?
I am personally a fan of cryptocurrencies and what they are all about. I have put some money towards it, and will continue to do so, so I always get a laugh when I hear Brandon talk about bitcoin "investing" on the podcast! But I do understand where he is coming from as there really is no tangible asset to cryptocurrencies (or stocks for that matter) compared to REI in addition to it's long long standing history, research, and studies, etc.
That said, with what I now know and continue to learn about this fascinating and lucrative world of REI, majority of my investing will be here. But I'm still curious about everyone else.
Hi,
I'm new on biggerpockets.
I am interested in real estate, and I'm quite experienced in cryptocurrency.
There are actually a number of cryptos that are very useful to me on a practical level. Things like paying rent, and paying for all the internal costs and many administrative costs I have to pay to run my small business. With crypto, i'm saving on a bunch of fees that way.
Of course, there is tons of speculation in crypto. No doubt. But not all that's crypto is bad or a gamble. And not all speculation is bad. Some are much more realistic than others. Just like any other things you can put your money into, buying into the crypto market is a matter of doing your own research. and being thorough about it. don't invest in things you don't understand or don't care about. Invest in things you know and care about.
For example, in the real estate space, there are crypto coins already on the market like Swiss Real Coin (SRC) (launched), Atlant (ATL) (launched) and Chelle Coin (CHL) (soon to be launching their own ICO), that are all focusing on different kinds of real estate deals. The differences include geolocation, coin type or token type, the different types of things that can be done with the crypto, the sequence of operations carried out on the blockchain, the smart contract, etc.
So even at the high level, although they're all real estate-based cryptocurrencies, they are not all the same. While SRC is all about real estate in Switzerland, ATL is all about real estate in the Atlanta area. And CHL is built to serve real estate across metropolitan areas throughout North America.
The crypto real estate space is really one of the areas in crypto where I see tons of development and interest among both investors and buyers on the market who are looking to save more than a little when they buy a property with digital money.
If you have any questions about crypto I'm happy to share whatever I know. I'm sure I'll have many questions about real estate that you all know the answers to.
~~~ Keep on Keepin' it Real (Estate)!
I think it'd be naive to be so dismissive of cryptocurrencies and blockchain technology. I understand the idea behind being skeptical about change, or anything that you're unfamiliar with, but it's pretty obvious there's a lot of value there.
At the end of the day, all investments are risks. Whether it's in real estate, stocks, business, cryptocurrency etc. What you decide to do should be based on your own situation and your own sense of risk management, not any one else's.
I think blockchain technology will be well apart of our future.
No one is dismissing the value of the technology, just the value of the coin itself. Like someone mentioned above, PayPal is using Blockchain - I can get behind that idea because they are a company with underlying cash flow and profits. But buying a coin just because you think it will go up in value is reckless in my opinion. There is a fine line between investing and gambling and buying a coin falls on the gambling side IMO.
Everyone is welcome to their opinion
What does PayPal do? It facilitates purchases and monetary transfers. Also does so using bitcoin.
What does bitcoin do? It is an immutable ledger on the most secure network on the planet, is censorship resistant, can't be manipulated or confiscated, hardest form of money ever known. And it facilitates purchases and instant instant money transfers - for free. And gives a person total ownership of their wealth. Seems pretty damn valuable to me.
The Internet is only valuable because of the company's I mentioned? I disagree. The Internet has value because it is valuable. For one, it allows people to send messages, music, pictures, instantly, video chat, and basically for free. Sound familiar?
And if it wasn't Google, Amazon, and the rest, it would be someone else. The Internet has always had inherent value.
However, there were people like Paul Krugman, who thought the Internet was a passing fad. There were lots of people and "analysts" and "investors" who thought Amazon would never survive. I believe most of the world thought that a stranger would never get into someone else's car nor rent someone's house over the Internet.
Do you see a pattern?
If you still don't believe owning a piece of the Internet is more valuable than a company that is built on top of it... Would you rather own a building in times square, or the entire block that everything is built on top of?
We are going to have to agree to disagree here man. You are talking in abstracts, I am talking in investment terms. I may be wrong and miss out on Bitcoin going to $1m, but you are deluding yourself if you don't think that comes with immense risk.
I think crypto enthusiasts need to decide whether they want it to be a currency or a technology. If it's a currency, massive appreciation is a recipe for massive deflation and a shrinking economy where people hoard money and don't invest it and nothing gets done. If it's a technology, then they need to provide some kind of return to the people that buy it. It can't be free for everyone to use like you are suggesting.
So I'm definitely not trying to change your mind. Anyone who comes across this can read our thoughts here and make up their own.
I disagree that I'm speaking in abstracts. Buildings have a maintenance cost, yes? Some estimate 10% per year. They also require capital expenditures. They also become physically obsolescent over enough time. So the land underneath those buildings don't have maintenance costs. It doesn't become obsolete and it doesn't depreciate. If 10 buildings on times square fell down one day, that would be a major loss for the owners of those buildings. But if you owned the land underneath, you haven't lost anything.
Let's say in 5 years something better than Google comes along and Google is seen as obsolete. Does that make the Internet less valuable? No.
Yes, technology is deflationary. Inherently so.
Does it cost you 32 cents, or whatever a stamp costs, every time you send an email? I guess we could say to some degree that email has demonetized the USPS. I can name a 100 ways that technology has taken jobs, destroyed entire industries, made products and services cheaper and more abundant, and removed middlemen.
That's what people want. Convenience. And property ownership.
Somewhere around 2 or 3 months ago, someone sent $2Billion worth of bitcoin from one point to another. The total cost was $1.75. And done instantly, from the privacy of their own home, or whatever they wanted to be. They didn't have to drive to a bank branch, wait in line, fill out paperwork or send a fax, or discuss the details of a private transaction with a bank employee, and then wait a week for the money to arrive. imagine how difficult it would be to send 2 billion dollars over a bank wire. What do you think something like that would have cost?
That $2B transfer was done anonymously and was most certainly a taxable event. I saw the same article and nobody ever talks about the tax burden, probably because tax evasion was involved. A wire transfer costs around $20 within the US and $50 internationally and would require proof of identity plus IRS reporting of the transaction (if the US is involved). It is not that Bitcoin transactions don't cost money, it is just how the miners are compensated. The miners get paid with crypto, but in the case of Bitcoin the rewards diminish over time. That forced scarcity makes the system get more expensive to operate and eventually will have an impact on transaction cost.
The Russian invasion of Ukraine is a great example of why Bitcoin faces challenges. The Russian banks were cut off from Swift, which allows international wire transfers. Russians are buying crypto to bypass and evade detection. People argue this helps crypto, but I would argue a system that attracts criminals (including tax evasion) is not sustainable. The exact reasons people love Bitcoin are its weakness.
I think blockchain and crypto are here to stay, but I am just not sure Bitcoin will be the winner. You use the analogy of Amazon, but it is easy to predict a winner looking back. There were hundreds of other dot com companies that failed. You are just conveniently only citing the one that succeeded. Book Stacks Unlimited was selling books online several years before Amazon through BBS went online at Books.com. They were eventually acquired by Barnes and Noble. We all know how the story ends. In 1994 there was a guy just like you telling people that Book Stacks was the future of book sales. In this story it is important to understand why Amazon succeeded. It wasn't because they had a superior website and they were not first. It was how Jeff Bezos built the company and deployed a strategy.
Doesn't matter if it was a taxable event. That wasn't the point. At which bank do you store 2 billion dollars? And how quickly can you move it?
And the point about Amazon wasn't about picking winners. It was about people missing the boat and being resistant to change and new technology. Bitcoin is the only non centralized non sovereign store of wealth on the planet. That's one of the reasons why it's different
Which people think Russians buying helps the cause? I don't think you've answered a single question of mine. I must have asked 20, at least
If you had family in Russia, wouldn't you want them to have money to get the things they need?
Using bitcoin for crime is a terrible idea. I've already mentioned why. That's also an old argument that died a long time ago
Joe, you seem to think people only like Bitcoin for its perceived criminal and tax cheating uses. I can tell you for certain that is the perception of people who don't understand it but are trying to fight it. Or entities that are threatened and are trying to fight it. I've given concrete reasons why bitcoin is a terrible choice for crime and taxivation, in prime and taxivation, in previous posts and other threads.
The Russian invasion proves exactly why the world needs it. Exactly the same proof that the Canadian government just offered, and the US government when it prohibited the ownership of gold. In fact, banks can seize your money in the US to prevent solvency.
I recognize a narrow theme in your arguments against it. At the moment, you've chosen to dislike it, while the rest of the world embraces it.
It seems like you you side with Chinese and North Korean authoritarianism. And central bank currency manipulation.
Maybe you don't know this but cash is actually best for crime, laundering, and tax evasion
Also Joe, you seem to dislike the idea of Russian families getting money to buy things like food.
The Russian government is unlikely to be able to use bitcoin to circumvent sanctions. Russia's total exports are around 400 billion. About half bitcoins cap rate. If Russia try to price it's goods in bitcoin, it's been said that it would increase bitcoins volatility, and make it hard for Russia to forecast its commodity revenues. They would also limit their buyers.
Exchanges in the US, don't blanket ban countries without due legal process. Thank goodness for that. They can and probably will blacklist specific addresses after the proper process is followed. So they aren't going to do it just because Janet Yellen said so.
Joe, you seem to think people only like Bitcoin for its perceived criminal and tax cheating uses. I can tell you for certain that is the perception of people who don't understand it but are trying to fight it. Or entities that are threatened and are trying to fight it. I've given concrete reasons why bitcoin is a terrible choice for crime and taxivation, in prime and taxivation, in previous posts and other threads.
The Russian invasion proves exactly why the world needs it. Exactly the same proof that the Canadian government just offered, and the US government when it prohibited the ownership of gold. In fact, banks can seize your money in the US to prevent solvency.
I recognize a narrow theme in your arguments against it. At the moment, you've chosen to dislike it, while the rest of the world embraces it.
It seems like you you side with Chinese and North Korean authoritarianism. And central bank currency manipulation.
Maybe you don't know this but cash is actually best for crime, laundering, and tax evasion
Central banks were created specifically to manipulate currency markets, but in a good way lol
Joe, you seem to think people only like Bitcoin for its perceived criminal and tax cheating uses. I can tell you for certain that is the perception of people who don't understand it but are trying to fight it. Or entities that are threatened and are trying to fight it. I've given concrete reasons why bitcoin is a terrible choice for crime and taxivation, in prime and taxivation, in previous posts and other threads.
The Russian invasion proves exactly why the world needs it. Exactly the same proof that the Canadian government just offered, and the US government when it prohibited the ownership of gold. In fact, banks can seize your money in the US to prevent solvency.
I recognize a narrow theme in your arguments against it. At the moment, you've chosen to dislike it, while the rest of the world embraces it.
It seems like you you side with Chinese and North Korean authoritarianism. And central bank currency manipulation.
Maybe you don't know this but cash is actually best for crime, laundering, and tax evasion
Central banks were created specifically to manipulate currency markets, but in a good way lol
Yes. But do you think they are doing it in a good way? Do you trust the central banks to do that job? Every government in history has manipulated its currency. Rome was one of them
About half of our portfolio is large scale bitcoin mining
About half of our portfolio is large scale bitcoin mining