You may have heard the term as it is now floating around in the ether. Bitcoin. What is it? I looked the term up on the Internet and CNN provided the following definition:
“Bitcoin is a new currency that was created in 2009 by an unknown person using the alias Satoshi Nakamoto. Transactions are made with no middle men – meaning, no banks! There are no transaction fees and no need to give your real name. More merchants are beginning to accept them: You can buy webhosting services, pizza or even manicures.”
Sounds intriguing. But is it money? It is defined as “cryptocurrency”, a kind of digital money. All the transactions ever made with this digital currency are recorded in a public ledger called a “Blockchain.” No coins, no paper, just a record of numbers called “keys” which are “linked through a mathematical encryption algorithm.” People and firms using bitcoins have “wallets” in which they store these “keys” that they buy from online exchanges. I’m giving you the direct quotes here because this is all news to me, and probably to you as well.
Let’s go back to CNN for more information. Why bitcoin?
“Bitcoins can be used to buy merchandise anonymously. In addition, international payments are easy and cheap because bitcoins are not tied to any country or subject to regulation. Small businesses may like them because there are no credit card fees. Some people just buy bitcoins as an investment, hoping that they’ll go up in value. “
Aha. Anonymity. Secrecy. Bitcoin transactions are recorded, but without identities of buyers and sellers. No names, just wallet IDs.
This may be pertinent to transactions involving illegal drugs, arms or other illicit trades, but why would it be utilized in real estate transactions, and has it even been used?