If you think that buying and selling homes with bitcoin sounds like a fad, for Shark tank’s Barbara Corcoran, it could be the future.
“It makes great common sense,” Corcoran said in a recent interview. “I’m being very optimistic because, as a long-term play, it’s perfectly suited for real estate transactions,” she added.
Bitcoin’s involvement in real estate is hardly anything new. There have been reports of properties sold for cryptocurrency from Texas to New York, and Zillow currently has 140 units for sale or rent that mention bitcoin in their listings. Corcoran foresees bitcoin-based real estate sales will be more common in the future.
“It’s peer-to-peer, with no central anything, and that’s why it’s so powerful,” Corcoran says. She explains that transactions like these grant buyers greater privacy. “The main idea is to eliminate the middle guy.”
As a matter of fact, Corcoran predicts that bitcoin and other cryptocurrencies will render banks useless.
“I really don’t expect banks to be around 10 years from now unless they change their model,” Corcoran says. “I don’t see why it’s going to be needed if bitcoin does what I believe it’s going to do,” she adds.
However, not everyone is quite optimistic that cryptocurrencies will catch on in the long run. Warren Buffet of Berskhire Hathaway called bitcoin “rat poison squared”, while Jack Bogle of Vanguard told investors to “avoid bitcoin like the plague”. And, although Corcoran believes in the potential uses of bitcoin in real estate, she says there are some challenges in its execution.
First, according to Corcoran, there is no insurance or appraisal in a peer-to-peer crypto sale, which is a cause of concern for most people. Second, cryptocurrency is notorious for its volatility.
“I could agree, this week, that that unit is worth $3 million,” Corcoran says. “If, by next Thursday, the bottom falls out and [the bitcoin] is worth $2 million, that $3 million agreement is useless.”
And finally, there’s one big reason why Corcoran is personally staying away from cryptocurrency
“I lose my credit cards at least once a week, I lose my cell phone once a month,” Corcoran says, “and I can’t even imagine being like that guy in England, what did he lose, $127 million because he lost his private key code?”
Still, Corcoran is hopeful that the cryptocurrency industry will survive these hurdles in the future.