BITCOIN & BLOCKCHAIN TECH FOR PHILIPPINE REAL ESTATE
This evening, I figured it is worth sharing with the TREGP readers and the Philippine real estate community about my personal opinion on the Bitcoin & Blockchain tech to real estate connection.
In every public speaking engagement that I make, I always try to introduce Bitcoin.
To get things started, history was made in Austin, Texas when a house was purchased purely via Bitcoin: First Bitcoin Real Estate Purchase Recorded in Texas
Another case was recorded in the city of Sumaré, located in the State of São Paulo, Brazil: First Sale of Property with Bitcoin Done Successfully Sumaré / SP.
Real estate sellers, buyers and sales professionals are finally moving the needle. As more and more people around the world learn to appreciate the economical value and utilization of Bitcoin, there’s high probability that we will see more real estate purchases done through the cryptocurrency.
The Philippines is a potentially bright spot for Bitcoin and here’s why…
The Philippine Central Bank released last 13 January 2017 its “Results of the 2014 Consumer Finance Survey“.
One headline stands out:
Eighty six percent (86%) of households are unbanked
The report reads:
Majority of households or 86 percent did not have a deposit account. This means that only the remaining 14 percent save their money in banks. The foremost reason cited by households for not having a deposit account was not having enough money to keep an account.
Other reasons cited by households were: (1) do not need a bank/cash account (2 percent), (2) bank/institution location is far (1.7 percent), (3) cannot manage an account (1.2 percent), (4) service charges are too high (1.0 percent), and other reasons (1.6 percent) such as minimum balance is too high, do not like to deal with banks/institutions and do not trust banks/institutions.
Based on the odds ratios, results show that majority of household heads who are employed in private establishments and government are banked. In contrast, majority of household heads who are self-employed, worked for private household, other household’s farm, and in other informal occupations, are unbanked.
This is the reality on the ground. No matter how everyone glosses over the improved economic situation of the country (ADB – Philippines: Economy), our financial institutions & infrastructures are still apparently inadequate to support the masses in moving and expanding their money.
Just recently, we hired a staff member and learnt that he had no bank account. He uses LBC Pera Padala (LBC remittance) & other local, non-bank money transfer platforms to send money to people in the provinces. This is just amongst a long list of problems and issues that Bitcoin could easily resolve. The fact of the matter is, Bitcoin users have the luxury of conveniently & safely sending coins to each other via mobile wallets, without relying on banks or 3rd-party authority.
The photo below was a bitcoin sent to me by my friend Federico Tenga, co-founder of Chainside, from Italy to the Philippines. The transfer just took a few minutes:
The only thing holding this back is mass adoption, but we’re moving slowly, but surely in that direction. There are currently only a handful of bitcoin exchanges (registered & non registered operating in the country).
Philippine Star reports:
The Bangko Sentral ng Pilipinas (Philippine Central Bank) has approved the registration of two companies to engage in the operation of bitcoin exchanges as part of efforts to regulate the fast growing but potentially risky virtual currency industry.
Coindesk even had a headline that reads:
The more bitcoin exchanges we have, the faster this mass adoption would take place.
Now, we go back to Bitcoin & Blockchain tech’s impact to Philippine real estate; The first real estate sale that will be transacted through Bitcoin would have a huge significant impact to our society.
This will signal a strong confidence not only in the cryptocurrency itself but also in the Blockchain technology that powers it. Smart contracts and title transfers through blockchain tech & other related services may very well soon follow, thus (i) accelerating the advancement in local & international transactions, (ii) improving the industry’s safety feature against fraudulent documents, (iii) mitigating data loss & (iv) effectively organizing the chaotic real estate services industry.
As an example, here in the Philippines, majority of the contracts and property titles are still on paper, which are most often lost due to fire, flood & other natural calamities. Its take a significant amount of time to reconstruct a title, blockchain tech will resolve this, since a title made under the blockchain tech would have multiple copies that cannot be destroyed or hacked or altered maliciously.
Furthermore, the current real estate services industry is very problematic with many scams and fraudulent activities still continue unabated. Multiple listings of the same property are being spammed all over the internet. Third-world problems that could be resolved by Blockchain because it is a:
digital ledger in which transactions made in bitcoin or another cryptocurrency are recorded chronologically and publicly. -as defined by blockchain-documentary.com
continuously growing list of records, called blocks, which are linked and secured using cryptography. -as defined by Wikipedia
Many governments have already taken steps to harness the power of Blockchain technology, here’s a great example:
Academics have also started exploring the possibilities of this new tech. Take a look at this:
Utilizing Bitcoin and Blockchain tech in the Philippine real estate industry is the way to the future.
What do you think? Let me know in the comment section.