In a world first, Australia will host a live auction in which bidders are being asked to pay not in cash, but in cryptocurrency.
The “Jetsons house”, a futuristic-style beachfront home in northern NSW, will be auctioned on April 8, with interested bidders able to buy the luxury property using either Bitcoin or Binance Coin cryptocurrency.
Cryptocurrency is a decentralised digital cash system – the technology behind it lets users, in this case bidders, to send currency directly to others without going via a third party like a bank.
The futuristic home is expected to fetch 700-800 bitcoins, or $3.5 million, when it goes under the hammer.
Bidding will be conducted in Bitcoin, but for those uninitiated, a live screen will show the conversion rate in the Australian and US dollar equivalents.
Listing agent Nick Witheriff, of LJ Hooker Kingscliff, said he already had registered bidders.
“We’ve been really surprised at the level of interest. So far, in the first week, we’ve had two registered bidders,” he told The New Daily.
“I’ve had calls from Switzerland, the US, Canada, Asia and from various investors who are in the cryptocurrency scene. It’s been generating a lot of buyer attention.
“It’ll be the first of its kind for a live bidding.”
Buying in Bitcoin: Nothing new
While the Casuarina Beach mansion is the first house to be sold in a live auction, it’s not the first to be bought via cryptocurrency.
In 2014, an undisclosed buyer bought a villa in Bali for 800 bitcoins, which equated to $500,000 at the time. Two months later a suburban home in Kansas City sold for the same amount, and just after that, an anonymous buyer purchased a 5500-square-metre block in a luxury community near Lake Tahoe in the US, for $US1.6 million ($2.26 million).
Across the world, properties have been purchased using Bitcoin in Portugal, Spain, Panama, Indonesia, Germany, Thailand and Argentina.
The way of the future
Dr Brendan Markey-Towler, of The University of Queensland’s School of Economics, says buying houses with cryptocurrency will only become more common.
“Especially as the next generation of blockchain consensus algorithms allow for greater … processing speeds and scaleability. That will almost certainly allow cryptocurrencies a new burst of growth as they become more efficient to use,” he told The New Daily.
He says the major factors hindering buyers from buying or renting properties in cryptocurrencies are acceptance and government regulation.
“What’s really holding renting especially, but also to some extent buying of real estate, back at the moment is simply that blockchain-based cryptocurrencies are still struggling to gain mainstream everyday acceptance as a medium of exchange.
“There has been significant progress, but the lack of clear regulation has meant that institutional actors in the economy [banks, estate agents and so on] do not yet, by and large, interface well with the crypto-economy.”
He says that unless you’re an enthusiast, selling property via blockchain just isn’t efficient.
“The various Australian governments do not yet recognise the validity of blockchain-based ledgers on the whole. And so while cryptocurrency transactions might take place on the blockchain, the government needs to be notified in order for off-chain transfers of ownership to be registered in government ledgers, and so that they can take their cut of the proceeds in stamp duty [in AUD].
“That makes the process of selling the house more cumbersome than it might otherwise be.”