Waiting on Bitcoin Reliability the Right Move for Multifamily
Though wave after wave of new smart-home technology and automated property management systems seem to continually reshape the multifamily landscape, the apartment industry has taken a careful approach to certain facets of innovation.
Often opting to wait and see as other sectors serve as guinea pigs for new tech and trends, multifamily has built a reputation for cautious and deliberate adoption and implementation.
Fortunately, when it comes to Bitcoin, that approach may prove to be spot on.
In theory, the day will come when consumers will be able to universally use bitcoins for any and all transactions. Eventually, it could completely replace government-backed currencies such as the U.S. dollar. For that reason, investment in and acceptance of the cryptocurrency is rapidly gaining popularity.
The convenience of resident portals and online payments already has drastically streamlined transactions for the industry, and it’s easy to see the practical applications of cryptocurrency. But the reality is, the Bitcoin era has yet to fully arrive.
Stability continues to be an issue. Wildly fluctuating values in the past have exposed Bitcoin holders to unexpected losses and created issues with frustratingly inconsistent pricing. Introducing those potential value swings to the already fluid nature of apartment rates would just add fuel to a highly flammable equation.
Despite encryptions, each Bitcoin is essentially a computer file stored digitally on a smartphone or computer app and is susceptible to hacking and theft. Last year’s hacker infiltration of Binance, one of the largest cryptocurrency exchanges in the world, resulted in the theft of more than $40 million worth of Bitcoin.
While bitcoins can be converted to cash through several methods – most commonly by selling it on a cryptocurrency exchange – the sparse number of businesses that will accept payment in Bitcoin makes such conversions a near necessity. These conversions can also be time-intensive, and due to the volatile nature of Bitcoin value, one cannot be guaranteed an absolute dollar value at the time of the exchange.
Bitcoin currently isn’t classified as legal tender in the U.S., and the Security Exchange Commission has stated that it is neither a commodity nor a security. It remains largely unregulated globally, too, which could pose complex issues for international renters.
While several countries – most of which are located in the Middle East — have banned Bitcoin entirely, many others have restricted its use. For example, in China, India and Indonesia, Bitcoins can’t be traded or used for payment, and financial institutions are prohibited from engaging with cryptocurrency exchanges.
While Bitcoin isn’t illegal in the U.S., the government appears to be waiting things out to see whether the cryptocurrency overcomes the struggles of its infancy.
The apartment industry seems to be doing the same, and it’s probably a prudent tactic.