Bitcoin is pristine collateral for lending. Since #realestate development is very capital intensive, credit is important. That is, the more bitcoin you own, the more collateral you have to finance construction. We've discussed this in detail at Bitcoin Amsterdam.
Money is highly spiritual.
Some of my thoughts on what interest rates would look like under a Bitcoin standard? 👇
In a free market under hard money, the actual or market interest rate depends on various factors, in particular the supply and demand for capital.
When the supply of capital exceeds demand, the market interest rate falls, while it rises when demand exceeds supply. The market interest rate is therefore the price at which capital is exchanged on the market.
A net interest rate would likely emerge naturally. We can assume that the interest rate would reflect the general time preference of people in the economy. Under a Bitcoin standard, interest rates would likely be higher, as the risk of capital loss is higher with a finite money such as bitcoin than with a fiat currency. This will likely result in higher interest rates being demanded to compensate for the higher risk.
Under a fiat standard, the "risk-free" interest rate is tied to inflation. A US Treasury bond with a yield of 5-6% would be considered risk-free, among other things, because the yield theoretically compensates for the loss of purchasing power that fiat money experiences.
More importantly, the "risk-free" interest rate component of fiat money refers to a country's risk of default, which is generally considered very unlikely since states are able to produce money “endlessly”.
The term "risk-free" is misleading. It does not exist per se. Opportunity costs exist always and everywhere and the market interest rate depends on various factors, including the risk of capital loss.
There is also a historical certainty that any fiat currency will eventually go to zero, which is often not reflected in the fiat market's "risk-free" interest rate.
Under a Bitcoin standard, the lowest risk component relates to the risk of loss of bitcoin held in self-custody. When stored in cold storage, those bitcoin are the holder’s alone and not in danger of confiscation or inflation by third parties.
The lowest risk return for #bitcoin is directly related to productivity. Since bitcoin is finite, the value of individual units increases with human productivity. There is a risk of not participating in the increase in the value of bitcoin (deflation) in the event of a loss. The interest rate on a loan under a Bitcoin standard would likely be the deflation rate plus a risk premium to compensate for the potential loss of bitcoin.
Full article: https://bitcoinmagazine.com/markets/bitcoin-will-completely-change-real-estate-markets-and-interest-rates
Have you ever wondered what the cost of rent would be under a Bitcoin standard? 👇 #BitcoinUrbanism #Housing
An important factor in determining the average cost of rent in a given geographic area would be the average disposable income of a household in that area. Over time, rental prices would emerge naturally from the market. This is a very complex subject.
According to the Austrian economist Ludwig von Mises, rent is not the specific revenue from land, it is a market phenomenon, where entrepreneurs are willing to take risk by investing funds in the production of a house to earn a return (rent).
Mises called this “originary interest,” which refers to the markup between factor prices and the expected revenues from the sale of the finished product. The implied rate of return on a production project.
When renting, the surplus money from not purchasing a house can be used for something else that is considered more important. For example, to finance a business or to save (for comparison: Under fiat, excess cash can be used to buy bitcoin).
We can expect the #rent to be close to the risk-free interest rate under sound money, plus an adjustment for risk, because after all, the rental is not risk-free. The property could be damaged and rent not paid. Yes, insurance could be purchased, but it would be costly and time-consuming.
The market interest rate would reflect the overall time preference of people in the economy. A risk-free interest rate would naturally emerge from the market, as will for example the average rents.
Full article: https://bitcoinmagazine.com/markets/bitcoin-will-completely-change-real-estate-markets-and-interest-rates
I haven’t. Please share. 🙏
Have you ever wondered what the price #housing under a Bitcoin standard would be ? 🏛️
#RealEstate prices will ultimately depend on supply and demand. If people are willing to pay a premium for location, etc., they will. Deviation from the average will be the natural result of market forces.
Overall, price movements of housing will become more closely tracked to population changes and scarcity of land. Right now land scarcity is artificial due to government regulations (zoning laws).
It is likely that regulations will continue to exist as municipalities and similar entities are interested in creating a particular building appearance, but they are unlikely to be as restrictive as they are today.
In general, housing would be cheaper because the level of financialisation would be much lower, as people can save in bitcoin (by default) and not have to invest to compensate for inflation. Plus, deflation would make it cheaper over time. 💫
Demand for real estate investment loans would also decrease as people can save in bitcoin.
By functioning as an actual store of value, bitcoin will most likely absorb the monetary premium that real estate has accumulated over decades of monetary inflation and housing will collapse to its utility value. This would change the home buying experience. 🏠
Much of the current financial infrastructure surrounding real estate, including brokers, will become less important and partially disappear.
When buying a house, rent should be considered as an opportunity cost, because the opportunity cost of owning a house to live in is that it can’t be rented out to generate additional income. 🧡⚡
#Bitcoin. 💫
#Bitcoin is creating a paradigm of digital self-sovereignty, empowering individuals with full control over their wealth. 💫
https://bitcoinmagazine.com/culture/bitcoin-is-a-possession-not-property
By functioning as an actual store of value, bitcoin will most likely absorb the monetary premium that real estate has accumulated over decades of monetary inflation and housing will collapse to its utility value. nostr:note1e6aaqtdxdyl55syz9sm0tppqf43z44fk9jkp40uf0p6pz6634q2spdt97f
#Bitcoin radically changes the housing market for the better.
We often don't realize we are in the moment until it is a memory. 💫
Nothing like doing Breathwork in the morning. 💫 Connecting with the inner source. ✨
The nature of Bitcoin as a digital asset makes it impossible to fit 1:1 into the framework of property as we know it. One can possess bitcoin, but never truly own it in the conventional sense. In my new article for nostr:npub1t8a7uumfmam38kal4xaakzyjccht4y5jxfs4cmlj0p768pxtwu8skh56yu I explain the difference between possession and property as well as why Bitcoin continues to create the basis for peaceful coexistence and efficient resource allocation between market participants.
https://bitcoinmagazine.com/culture/bitcoin-is-a-possession-not-property
#Bitcoin emerges as the ultimate store of value, a prime treasury asset that safeguards productivity from the clutches of monetary inflation.
I had the honour of being guest on the 100th episode of nostr:npub1st4elxz4dphx2qxpuaklvs855zetnkglu8dvszdxamgqn5q3pk5svflv5p's German Bitcoin podcast "Was Bitcoin bringt.". He is a tremendous asset to this space. We talked about how Bitcoin will replace the broken monetary system - and with it, #realestate investments as we know them today. The first part of our conversation is online. 💫
nostr:npub1eln4r7kgp74ty4f70qcntu28lkfuxk7hflrsgewd7l3u7swj0exqrwz3pj —> Breathwork & Bitcoin.
The opportunity cost of buying a #house is not being able to buy bitcoin. A bad deal. #RealEstate cannot compete with bitcoin as a store of value. The latter is rarer, more liquid, easier to move and harder to confiscate.
https://europeanbitcoiners.com/bitcoin-vs-real-estate-what-is-the-better-store-of-value/