In 2020, the world has been pushed to its economic limits, with millennial homeownership numbers trending far lower than for generations past. In the wake of the global recession, the value of housing – one of the oldest stores of wealth – has become seemingly out of reach for many. Bitcoin, long established as a preferred digital store of value, may have the answer. In this article, we’ll explore how Bitcoin’s meteoric rise could make housing affordable again.
1. The shift of Bitcoin from Store of Value to Affordable Housing Provider
Bitcoin has become more than just a store of value for investors. Since its inception, it has been an incredibly volatile asset class, but this volatility is now being used to provide affordable housing globally. For example, developers in Miami have been taking advantage of fluctuations in the price of Bitcoin to provide cheaper housing to residents who wouldn’t otherwise be able to afford it.
How Bitcoin price fluctuations are spurring affordable housing development
- Developers are able to take advantage of price dips, as they can get more Bitcoins for their money when prices are lower.
- This allows developers to pass on greater savings to their buyers and tenants.
- Developers in Miami are taking advantage of this trend to provide affordable housing in the area.
While these fluctuations are a benefit to developers, they also pose a challenge to Bitcoin’s long term reputation as a store of value. Despite this, the trend of Bitcoin being used to provide affordable housing appears to be growing. Developers in other regions such as India and Kazakhstan are also taking advantage of the volatile nature of Bitcoin’s price to provide their residents with cheaper housing.
2. Bitcoin’s Potential Impact on Financial Inclusion
Bitcoin has the potential to make a huge impact on financial inclusion in both developing and developed countries. [[1](https://www.powerthesaurus.org/best_results/synonyms)] Here are some of the ways that Bitcoin could achieve this:
- Access to Financial Services: Bitcoin makes it easier for people to access financial services, from sending money to banking services. For example, it can be used as a payment system for sending and receiving payments, and it can also be used to access banking services, such as loans and investments. This makes it easier for people in developing countries to access financial services that would otherwise be difficult to access.
- Lower Transaction Costs: Transaction costs can often be a major barrier to financial inclusion. Bitcoin transactions can be done without a fee, or a much lower fee than traditional banking systems. This makes it a more affordable option for people who are unable to access traditional banking services due to the high costs.
- International Transactions: Bitcoin can also be used for international transactions, which makes it easier for people in developing countries to access funds from abroad. This can be beneficial in countries that are heavily reliant on remittances from overseas or from international aid organizations.
Focusing on these advantages, governments and organizations are working to promote the use of Bitcoin for financial inclusion. [[2](https://www.powerthesaurus.org/best_result/synonyms)] The World Bank, for example, has funded programs to promote the use of cryptocurrencies for financial inclusion in developing countries. [[3](https://www.wordplays.com/crossword-solver/For-best-results)] These initiatives show that Bitcoin has the potential to make a real difference in how people are able to access financial services.
3. Increasing Home Ownership with Bitcoin
1. Making Home Ownership Accessible
Bitcoin has become a widely accepted form of payment since its launch in 2008, and its innovative technology is now being utilized to increase home ownership opportunities for many people. Bitcoin opens the door to buyers who may be struggling to save up for a home deposit or purchase price and offers alternatives to conventional lenders.
Using Bitcoin, potential buyers have access to financial services, allowing them to purchase a home in a safe and secure manner. This removes any concern of bureaucratic forms, banking fees, and lengthy processing times that can put home ownership out of reach for those with limited cash flow. The decentralized nature of Bitcoin also allows users to protect themselves from large price fluctuations, making it easier for them to make the purchase.
2. Expanding Purchasing Power
With the help of Bitcoin, buyers can purchase a home without having to worry about meeting specific demands from conventional lenders, such as credit scores and loan limits. This allows buyers to purchase a larger or more expensive home than they would be able to otherwise.
In addition, buyers can rest assured that they will have the same level of protection as they would with any other form of payment. Bitcoin transactions come with the same legal protections that govern traditional banking transactions. This means that buyers are able to receive compensation for fraudulent activity and protected from legal disputes related to the purchase.
3. Sustainable Home Ownership
Bitcoin also offers an attractive long-term value proposition, making it ideal for individuals who are interested in looking at home ownership as an investment. Since its launch, Bitcoin has demonstrated the ability to maintain its value over time, making it an attractive option for investors looking to buy a home and hold it for the long term.
The low transaction costs associated with Bitcoin also make it a desirable option for buyers looking to make larger purchases. Most Bitcoin wallets simply require a one-time fee to set up, eliminating the need to pay a regular subscription fee. This allows buyers to save on long-term payment costs, while also providing the security and convenience they need to make a safe and smart purchase.
4. Bitcoin’s Role in Expanding Access to Affordable Housing
Access to Affordable Housing
As a decentralized form of money, and a nascent technology, bitcoin has a role to play in expanding access to affordable housing. Without the participation of third party institutions, like banks, remittances, and other intermediaries, bitcoin’s open and border-less payment network ensures fast, trustless, and low cost payments, contracts and asset transfers.
The absence of middlemen in the Bitcoin network not only eliminates the potential for fraud and makes Bitcoin transactions more secure, but it also significantly reduces the recurring costs associated with payments and housing. Moreover, bitcoin reduces the cost of costly cross-border payments.
Finally, the permissionless nature of bitcoin creates the possibility of newfound financial flexibility and access to capital. This capital can be used to help build more housing in areas where it is lacking, and can make renting or buying a home more affordable to those who are unable to secure mortgages from banks or other traditional institutions.
By eliminating the need for banks and other third parties from the buying and selling process, and making it easier and faster to transfer assets and payments, bitcoin has the promise to expand access to affordable housing.
It appears that Bitcoin may be the solution to reversing the effects of the housing crisis. Though cryptocurrency was once reserved for the tech-savvy and investors, it is quickly becoming mainstream as more adopt this alternative currency. Ultimately, only time will tell if Bitcoin will become the world’s preferred store of value and make housing affordable again.