For decades, home ownership was the vehicle through which the middle class prospered. Unfortunately, while institutional and foreign investors are raising home prices and money printer prices, the “American dream” is now beyond the reach of many. In fact, as of 2017, rents in the U.S. were higher than at any time in the previous five decades.
This is why I propose Bitcoin as an alternative to home equity. While the American dream is dying, the dream of Bitcoin is barely beginning. Using lessons from history, I will outline eight reasons why Bitcoin has improved so much from residential real estate:
1. Bitcoin is digitally scarce
There will be no more than 21 million bitcoins. Even though your grandfather told you, “Buy the land, they’re not building it anymore,” that’s no longer true.
With the advancement of technology and changes in government regulations, people are able to “create” more land, thus building taller apartment complexes and increasing supply by developing previously uninhabitable areas. With Bitcoin, you are opting for a network with a predictable issue and known money supply instead.
2. Bitcoin is divisible
Anyone can buy $ 1 or $ 1 billion bitcoin. The split makes Bitcoin accessible to everyone and allows investors to average dollar-costs rather than spend time in the market with a large investment. Instead of spending a decade saving a declining currency in the hope of saving enough for a down payment, investors can start stacking SATs the moment they earn their first dollar. Moreover, by constantly buying small amounts of bitcoin, buyers should not be afraid to buy bike tops, who have bought real estate.
History Lesson: In July 200, thousands of Las Vegas residents bought a home 15 years later, Just broke. These unfortunate residents took out loans at the pinnacle of the housing bubble and were later forced to pay their mortgages for the next 30 years of their investable income.
3. Disable bitcoin
A Canadian bitcoin is no different from El Salvador. The non-fungus of housing complicates the decision to purchase. Is the house near a good school? Is it near the subway? Is it a good size? Is it in a growing city? These are just a few of the dozens of ever-changing factors that affect the quality of your home.
What if the subway is removed, the school closes, or the zoning law changes? While real estate as a whole can be appreciated, your home is losing value for reasons beyond your control.
History Lesson: In March 2020, The switch to work from home led to a sharp sell-off in New York City real estate. When owners of downtown apartments saw their life savings evaporate, less than 100 miles, Hampton real estate owners experienced Record appreciation and all-time value high. In this case, homeowners are rewarded with a random set while others are crushed.
4. Bitcoin low maintenance
Bitcoin can be bought, stored and sold for virtually zero fees. For most American homes, it is estimated that maintenance, repair and depreciation costs are about 3% of the value of the property each year. In addition, homeowners will have to pay significant transaction costs and property taxes. In contrast, Bitcoin can be safely purchased with a 20 basis point (bps) fee and stored for free with a paper wallet.
5. Bitcoin is transparent
Anyone can see all the information of the market on-chain. As institutional investors like Blackstone and technology companies like Zillow become increasingly important to buyers in the housing market, the inequality of market information expands.
Now, in addition to very limited value data, every day Americans are entering a bidding war with companies that have hundreds of billions of dollars in management and thousands of transaction data points from which to base their decisions. In contrast to the obscure housing market, the Bitcoin network allows any participant access and analyzes every historical transaction, starting from the beginning.
6. Bitcoin liquid
Bitcoin can be bought and sold anywhere in the world, 24 hours a day, 365 days a year. This constant price discovery not only leads to low price inconsistencies but also makes it incredibly valuable in times of emergency.
History Lesson: In 2001, when China Established its first cryptocurrency ban, Bitcoin owners were able to sell or transfer their holdings instantly. Conversely, in July 2021, when China Occupied the property of anti-communist protesters, Homeowners were powerless because their life savings were confiscated.
7. Bitcoin freedom
Bitcoin lets you transfer whenever and wherever you wish. Although the tongue is often used on the cheek, the term “old ball and chain” is appropriate when talking about accommodation.
Holding yourself to a 30-year mortgage that consumes half of your disposable income is a disaster recipe. As the rate at which people change careers and move geographically increases, the ability to pack up and move away with minimal friction is increasingly valuable.
History Lesson: In the early twentieth century, More than six million African-Americans have moved north from rural southern cities Avoid strict isolation laws and look for better opportunities. In order to relocate, these residents were forced to sell their homes and incur the costs and inconveniences of all related transactions.
8. Expect Bitcoin
Bitcoin gives you a call option for the future. Bitcoin is an open source protocol that has a specific cycle: as the network grows, developers are encouraged to build on it, which instead strengthens the network. If you believe that the future of investing on top of the Bitcoin network, investments or even money can be made by yourself, property ownership gives you the opposite exposure.
The American Dream is the Bitcoin Dream
Suppressing public opinion is not an easy task, as the American subconscious is so firmly entrenched in the desire to own a home. Arguing from the first principle and relying on lessons from history, I hope this article will help present Bitcoin as a better, safer and more readily available alternative to home equity. When America dreams May die, the dream of Bitcoin has just begun.
This is a guest post by Leo. The views expressed do not fully reflect their own and BTC Inc.’s Bitcoin Magazine.