Nowadays, the global economy is moving towards a total digital ecosystem. Everything from money transfers to investments is going paperless—which also means contactless, a bonus during the unique time of a global health pandemic. Cryptocurrency and tokenized real estate are the latest development in fintech’s field of digital payments. But how can you leverage these opportunities for your portfolio?
What is cryptocurrency?
Cryptocurrency is a digital channel of value exchange. It utilizes cryptographical functions to facilitate and perform financial dealings. Cryptocurrency leverages blockchain technology to achieve immutability, transparency, and decentralization.
One crucial feature of cryptocurrency is that no authority governs it. The decentralized nature of the blockchain makes cryptocurrencies immune to traditional forces of government interference and control.
How does cryptocurrency work?
Cryptocurrencies can be delivered between two parties through public and private keys. Such transfers can be performed with lower processing charges than the comparatively higher costs charged by financial institutions.
One vital benefit of cryptocurrencies is that they are digitally encrypted, preventing any form of fraud. They cannot be reversed or counterfeited by the sender.
Almost anyone can have access to this technology. There are billions of people on our planet who do not have access to standard exchange systems, but they do have access to mobile phones and computers that connect to the internet. These individuals benefit from being able to transact and trade on the cryptocurrency market.
Moreover, there is no cryptocurrency fee, but most expect users to engage a third-party service to create and maintain their bitcoin wallets.
What Is Tokenized Real Estate?
Tokenization is a well-emerged technology trend, signifying the convergence of blockchain technology and real estate investing. Tokenization allows asset owners to raise investment more effectively while offering investors unparalleled access to private real estate investments, liquidity, and transparency.
The Benefits of Tokenized Real Estate
In short, tokenization is a method of securing real assets. It is the process of translating the worth of a real estate property into digital tokens. That allows a person to sell it to investors to raise funds. To “tokenize” indicates to split the assets into tokens or shares that signify an individual underlying percentage of various underlying assets. Tokenizing real estate shares allows direct P2P transactions without the involvement of intermediaries. That helps with a risk-free business and lowers additional expenses.
Tokenizing real estate assets offer high volume liquidity. A property may be purchased in shares, rather than having to purchase an entire property with a down payment and mortgage. The value of these shares can be translated into cash, which allows properties to be bought and sold quickly, translating property values into money. This enables fractional ownership where investors can confidently divide the value of shares and their ownership in a property. This helps to significantly lessen the pressure of being a sole owner and shoulder every challenge. The value of these shares can be translated into cash, which allows properties to be bought and sold quickly, translating property values into money.
Finally, blockchain housing removes geographical obstacles, allowing one to trade with anyone across the world. This massively expands business opportunities, especially when travel and in-person viewing and purchasing of properties are unsafe and advised against.