In this video, Ron Koenigsberg, CCIM, President of American Investment Properties will discuss Cryptoccurency and Blockchain technology. These two terms and technologies are relevantly new to the commercial real estate space. Learn how this virtual technology is changing the way we conduct commercial real estate sales and transactions. Watch the video now!
Video Transcript: Hi, I’m Ron Koenigsberg, President of American Investment Properties. One of the goals of our monthly video series is to demystify terminology and trends relevant to commercial real estate. In today’s edition, I’ll be simplifying and explaining two relatively new terms that many find puzzling, cryptocurrency and blockchain technology, and discussing the role they play in commercial real estate.
Are you familiar with Bitcoin? Yes? Then you already know what cryptocurrency is. If you answered no, that’s okay. Chances are you know more than you think you do. Simply put, cryptocurrency is a digital or virtual currency designed to work as a medium of exchange. Defined as the “peer-to-peer electronic cash system,” the very first cryptocurrency and best known example is Bitcoin.
How Does Cryptocurrency Work?
Cryptocurrency operates independently of a centralized bank with encryptions used to secure and verify transactions as well as to control the creation of new units. Encryptions are completed by people called miners. Only miners can confirm transactions by solving a cryptographic puzzle. They take transactions, mark them as legitimate and spread them across the network.
The Details of Blockchain Technology
The transactions are then instantly added to something called a Blockchain, which is a public ledger of all transactions that ever happened within the network. This ledger, or Blockchain, is available to everyone. Therefore, everyone in the network can see every account’s balance. Each transaction is a file that consists of the sender’s and recipient’s public keys (wallet addresses) and the amount of coins transferred. Although Blockchain technology is complex, it is incredibly accurate and transparent.
Cryptocurrency and Blockchain in Commercial Real Estate
As technology advances, people are looking to use other forms of currency as payment across many industries – commercial real estate is just one one them. Cryptocurrency and blockchain technology could potentially play a huge role in commercial real estate as digital currency has already began being used as essentially a trade for property. Even further, using a technology system like Blockchain to record the transactions of buying and selling real estate could be incredibly efficient and seamless, thus creating “smart contracts.” These smart contracts and a Blockchain style technology will significantly change the way we conduct transactions. Thanks for watching our monthly video. I hope you found the content concise and informative. As always, if you have any questions about the topic discussed or the Long Island commercial real estate market please contact us at American Investment Property.