Cryptocurrency & Blockchain – Safe as Houses?

Updated: January 22, 2018

Unless you’ve been marooned on a remote desert island for the last few years, you’ll be aware of Bitcoin, the computer-based cryptocurrency that has been around since 2009.

Fiat coins and notes and Cryptocurrency

Property investors are taking the leap and investing in blockchain technology companies and cryptocurrency.

Cryptocurrency is hot news this year, and with blockchain technology capping the number of bitcoin that can be produced, property investors are increasingly taking the leap and investing in blockchain technology companies, hoping for a return on their investment.

When it comes to investment planning for landlords, the end of the year is a great time to think about your investments for 2018.

But what exactly is blockchain technology, what can it be used for and how stable an investment decision is it really?

What is blockchain technology?

Blockchain is the technology behind bitcoin; the cryptocurrency’s backbone, if you will.

In simple terms, blockchain technology allows you to record transactions or other information without having to trust a bank or other clearinghouse. A blockchain can be thought of as a giant spreadsheet.

They consist of records, or blocks, which are linked and secured into a chain using cryptography. These blocks “exist via a distributed ledger system that creates a decentralised, open-source mechanism for exchanging all types of information.”

This sounds complex, but really it’s pretty straightforward. One of the highlights of blockchains is that once data is in the blockchain, it cannot be modified or deleted.

What are blockchains used for?

Thinking of blockchains as a giant spreadsheet helps you to see their many uses.

Already the technology has been adopted by high street banks and one company is using blockchain technology to record every step that food products take on their way from the field to our supermarkets. Blockchains could be used to track shipments and supply chains or even to store medical or financial records.

So the future of blockchain is pretty bright?

There are some experts who say that blockchain technology is a big deal, even those who say that they have the power to be as influential and transformative as the internet.

However, it seems that many experts have differing views on the future of blockchain technology and cryptocurrency, with some predicting blockchain will flounder in the future. It seems as though the future for this technology, and for bitcoin in general, is unpredictable.

Should you invest your hard-earned cash in blockchain technology and cryptocurrency?

There are very few companies out there who will accept bitcoin or cryptocurrency for payment of goods and services, so what exactly is its value?

Buy XRP from Ripple

Investors are lining up to buy XRP from Ripple.

Well, the value of bitcoin depends on what others may pay for it in the future, and investors have already seen significant gains in 2017.

Ethereum, a new cryptocurrency named after a substance from the Japanese animated film ‘Castle in the Sky’, traded at around $300 at the end of August 2017, up from $10.28 on New Year’s Day 2017. Yet between June-July 2017, the currency lost half its value, as did bitcoin in its early days. This makes it easy to see just how volatile the cryptocurrency market can be.

Ripple, a fintech company based in the US, has hit mainstream media due to the fact that it has gained over 100 banking clients such as HSBC, Barclays and Bank of America.  Ripple cuts down cross-border payment transaction times to around 3 seconds and offer extremely low fees.  Their own cryptocurrency is on the rise reaching an all-time-high of $2.02 (29/12/2017) as the general public look to buy XRP.

So should you invest? Experts say that investors should only make the commitment if they can afford to make a significant loss.

Gabriel Dusil, co-founder of blockchain technology incubator Adel Ecosystems Ltd, said: “The market is certainly volatile and it is not for the faint of heart, but the long-term potential for cryptocurrencies is bright.”

Those who can ride out the dips and losses are likely to see an excellent return on their investment in the long term.

How secure is the future of bitcoin and other cryptocurrency?

With that said, one wrong move and the cryptocurrency market could tumble.

Severe regulations or hackers targeting the system could mean that bitcoin crashes and burns.

There are risks that it could be banned as well as the numerous security risks associated with the currency. Investing in cryptocurrency and blockchain technology really is the opposite end of the spectrum from relatively safe, secure returns on property investment.

On one hand, landlords invest in bricks and mortar for an almost guaranteed capital appreciation on their property over 10-15 years.

On the other hand, digital currency, which isn’t even tangible, is floating around in the ether and could be a risky, potentially unstable investment.

Safe as houses?

Blockchain technology could even revolutionise property ownership, with transactions on the blockchain replacing digital or paper records.

Property owners will hold cryptographic keys linked to their blockchain address, so only they will be able to manage and transfer their real estate assets.

This could help to eliminate issues such as land title disputes and fraud.

Blockchain also has crypto tokens, and although these are not yet widely used, the idea is that they represent the asset (the property) and can be exchanged on the blockchain.

Already one company in Japan, BitProperty, has created a platform for property owners to tokenise their property and exchange these tokens with anybody else, anywhere in the world.

Will you be investing in cryptocurrency and blockchain?

Ultimately, the cryptocurrency market is volatile and whether or not to invest in blockchain technology and bitcoin remains a very personal decision for property investors.

Whilst there are those who would prefer to stick with a more secure investment like a property to rent with guaranteed returns, there will always be those who want to take the risk and gamble with a view to higher returns in the future.

What do you think of the cryptocurrency market and blockchain technology for investment? Is it something you would consider investing in as a landlord? If so, how do you feel about the risks involved?

We’d love to hear your thoughts.

Cryptocurrency & Blockchain - Safe as Houses?
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Cryptocurrency & Blockchain - Safe as Houses?
Thoughts of cryptocurrency market and blockchain technology for investment. Should you invest your hard-earned cash in blockchain technology and cryptocurrency?
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