Real Estate and Bitcoin: Crazy or Compatible Combination?

Everyone’s heard of real estate. And, by now, most Downtowners have also heard about Bitcoin, the digital currency that some say could potentially replace the almighty dollar some time in the future. #bitcoin #realestate #dtla

Real estate has been around since the beginning of civilization, for thousands of years, as has the old trusty stand-by of true money, gold. At first, real estate and bitcoin sound quite odd when mentioned in the same sentence or the same article.  This is because they are opposite in several ways.  The L.A. Loft Blog has brought them up together because their opposing natures give them surprisingly superior diversification, thus safety and security in an investment bundle of two.  In fact, those who purchased $10,000 of Bitcoin when the LA Loft Blog first mentioned it in January of 2014 now own an investment that can be used as a $176,000 down payment on an amazing Downtown loft!

Most of us have heard of investment gurus like Warren Buffet, Jim Cramer and Suze Orman talk about how diversification of investments increase the safety for our hard-earned money. They are quite right of course.  Equally true is that over-diversification reduces potential gains.  For those who want to maximize returns while not putting all eggs in one basket, real estate provides the tried-and-true age-old tangible asset that is one of the three basic demands of humans: food, clothing and shelter. In contrast and in support, bitcoin provides a new life-changing technology that brings a breakthrough in the way goods and services are transacted, along with a fundamental shift in our relationship with the government, banks and businesses.  In short, real estate is super-tangible and physical, while Bitcoin is the killer app that can make physical dollars obsolete.  Bitcoin is the Internet of money. The amount of money to buy a house can now be kept in your wallet, flash drive or even in your head as a word sequence called an HD or Hierarchical Deterministic key.

We already know and understand the basics of real estate:  we need to live somewhere, so why not gain from it like an investment.  And why not pay for our own mortgage instead of paying for our landlord’s mortgage? The average homeowner is 44 times wealthier than the average renter. These are excellent reasons to own real estate. But why should we also own any Bitcoin? Take a look at the Google Trends chart that shows what billions of people are really interested in based on their actual Google searches:

The chart suggests that the public interest in land with a house on it has decreased, while our interest in Bitcoin has skyrocketed.  The interest in trusty old gold has increased reliably.

There are countless talking heads and blow-hards spewing their useless opinions of the trials and tribulations of Bitcoin: “Bitcoin is a bubble about to burst…”; “One Bitcoin will be worth more than $1 million.”  They are both quite possibly true at different times, so let’s make sure we know why and when.  I only listen to those who know as much or more than I know about Bitcoin fundamentals, coding, economics, banking and investment.  I’ve been programming computers for more nearly 40 years since the age of 12.  I was an Information Systems Specialist at the U.S. Air Force Space Command’s Space Test Center in Silicon Valley.  I’ve  studied economics extensively, I’ve been a banker, and have helped investors to make millions in real estate. I’ve gained substantially from Bitcoin personally, and vitally learning from small mistakes along the way.  I’ve successfully predicted where Bitcoin and real estate are going, along with when, why and how.

There are three fundamentals of Bitcoin that the mainstream media routinely fails to mention.  These key facts that are vital for everyone to know in the age of digital money:

1. Bitcoin has increased in value to 250,000 times its originally traded value of 6 cents in 2010.  To get that much return on your real estate investment, your $700,000 loft would need to go up in value to $17,500,000,000. Your loft is not going to increase to $17 billion any time soon.
2. Bitcoin has more intrinsic value than the US Dollar.  Now that everyone understands that one Bitcoin currently has a lot more monetary value than one dollar, we need to know why. The dollar is backed by fiat of a government that is still the world’s economic superpower, but has been slipping on several economic fronts. The government prints and prints more and more dollars to address the needs of the government, causing the dollar’s value to fall by more than 70% in my lifetime. Most expect that to get worse, while some predict that the dollar will crash to near worthlessness like every currency has eventually done throughout history.  Bitcoin, on the other hand, is backed by the largest distributed computer network in the world, and is limited to 20 million Bitcoins, so the value must go up as more people use more and more Bitcoin to conduct cheaper, faster, more private transactions over the internet and in person. Bitcoin is already the most economical method to transact large amounts of money internationally, and has already rendered government-imposed capital controls all but useless.  Bitcoin is already defeating failed, antiquated government economic policies, in favor of free-enterprise and personal freedom.  Bitcoin is more trustworthy simply because it requires no trust of a third party.  It relies on the same type of SHA-256 cryptography that is relied on by banks, secure internet websites and used by the U.S. Government to protect nuclear secrets. Bitcoin is already diminishing the power of big banks, helping to correct bloated governments, and is democratizing rigged Wall Street by forcing crony capitalists to playing fair with the little guy.
3. Bitcoin is extremely volatile, and is not yet worthy of placing a very large percentage of your assets.  Please do NOT put all of your retirement savings into Bitcoin! Crytocurrencies are all a high-risk, high-return investment, and a great place to put a small percentage of your risk capital. The quick, ethereal value of Bitcoin is wonderfully complimented by the hard, tangible, long-term qualities of real estate.  Just like we might choose bread, milk and eggs if we can only eat three foods, we might choose real estate, gold and Bitcoin if we could only choose three investments to survive and thrive on.  This volatility also gives Bitcoin extreme profit as an investment for those who understand the cycles, for those who hold it for the long term, and for those who know when to get out of Bitcoin before its ultimate demise.

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Copyright © This free information provided courtesy L.A. Loft Blog and LAcondoInfo.com with information provided by Corey Chambers, Realty Source Inc, BRE#01889449 We are not associated with the homeowner’s association or developer. For more information, contact (213) 880-9910 or visit LAcondoInfo.com Licensed in California. All information provided is deemed reliable but is not guaranteed and should be independently verified. Properties subject to prior sale or rental. This is not a solicitation if buyer or seller is already under contract with another broker.  This is not an offer to buy or sell securities. Bitcoin information is deemed reliable but not guaranteed. Digital currencies information is a non-expert opinion based on personal and business experiences. Bitcoin is a dynamic, volatile currency that is unpredictable in nature. This Bitcoin information is not provided by a professional investment advisor, and is not intended for use in making investment decisions. Investors must use other tools and perform their own research to determine what risks that they are willing to take based on their individual needs. Bitcoin provides a superior high-risk / high-return investment opportunity that is not controlled by a government or company. An ideal venue for risk capital and disposable income, Bitcoin is generally not considered to be suitable for use as a primary investment. Consult with a certified financial advisor or licensed investment advisor before making any significant investment.