How Bitcoin improves Real Estate for those that actually use it \ stacker news ~bitcoin

How Bitcoin improves Real Estate for those that actually use it

1772 sats \ 23 comments \ @kepford 30 Apr bitcoin

Listening to Lyn Alden's conversation at Cheat Code and it reminded me of things Bitcoin has showed me. Obviously Lyn has said this and many others but I can rationally and logical make sense of the story.

The meme is Real Estate is a shitcoin. That's not really true. Shitcoins have little to no value. They don't have utility at least on a mass scale. Real Estate has utility. But, is Real Estate a good investment? Compared to a shitcoin? Yes. Much better because it has utility but if you compare it to gold or bitcoin its inferior as an investment if you look at generically.

When we think about bitcoin in the abstract without understanding fiat we miss many things. This is the problem I see most often with the crypto people. They don't understand the difference between price inflation and monetary inflation. They don't understand, even on a basic level how the dollar system works. They are normies. I'm no expert on economics but I've read a lot and learned a lot over the years. Fiat, the dollar specifically distorts so many things because it is the unit of account for the world. Fiat distorts many investments like real estate. In dollars real estate seems like a good investment across the board but its actually not.

When you factor in property taxes and maintenance over the long term I believe you'd be better off with gold. When you use gold as your unit of account (measuring stick) most real estate isn't as good of an investment over the long term. Now, in some places in some times with leveraged credit it is great investment but it isn't ALWAYS the case. Fiat distorts the market.

Real estate has utility though and because of that you can make income from it and it can be a good investment. Its just not passive like gold or bitcoin. You can invest in a business as well. If that business provides value you might make a good return on your money. Right now though compared to bitcoin pretty much any investment is going to lose to bitcoin. This won't always be the case.

Fiat distorts everything because it is always being inflated and it creates credit distortions. So bitcoin should make it much more affordable to own real estate by exposing the distortions and removing them. Real estate should return to a property that is valuable for its utility instead of it being a hedge against inflation.

If we fast forward 100 years in a bitcoin dominated world its not like owning land will be stupid. Its just that people won't be seeking to shelter their wealth in land. It makes more sense to use bitcoin. Bitcoin will allow businesses to think more generational vs. quarter to quarter. I can see a world where wealth bitcoiners own properties and rent them to young people. People that haven't figured out where they want to live. They will operate as a business. And if you consider business an investment then I guess you can say this is investment real estate but I would say this is different from buying gold as an investment. Real Estate is not dead but it will drastically change and I think this is great for people that want to USE land.

That's my thoughts at this point at least. What do you think? Did I get anything wrong?

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110 sats \ 5 replies \ @grayruby 30 Apr

Real estate as an investment will be a victim of its own success. There is a lot of dollar denominated equity in real estate that highly indebted governments would like to get their hands on.

I don't think real estate will be a bad investment over the coming decades but it won't be the no brainer fiat short it has been for the last 30 years,

60 sats \ 4 replies \ @kepford OP 30 Apr

Great summary. I agree.

55 sats \ 3 replies \ @grayruby 30 Apr

Already seeing the beginnings of this in Canada. Foreign buyer tax, vacant home tax, luxury property tax, land transfer tax, increase in capital gains tax and changes to inheritance rules. This is just the beginning. They are going to bleed every cent they can out of people's net worth.

50 sats \ 0 replies \ @kepford OP 30 Apr

In my mind when comparing bitcoin, gold, and real estate I separate state blood sucking from legit cost of ownership. Land is usually going to require maintenance unless it is undeveloped or wild land. Gold requires security as does bitcoin but bitcoin security is far cheaper and less trust is required. Its the superior asset. And on top of that you can take it anywhere and transfer it globally with no third party. On top of that you can use it as currency. Its quite amazing. I think even if it just killed fiat and all central banks had to peg to it we'd have a huge win for mankind. But it won't stop there.

20 sats \ 1 reply \ @kepford OP 30 Apr

I suspect this with bitcoin as well.

55 sats \ 0 replies \ @grayruby 30 Apr

Definitely any bitcoin held with a regulated, centralized custodian. At least bitcoin is portable unlike a house or building and you can try to escape to a friendlier regime.

71 sats \ 0 replies \ @TwoLargePizzas 1 May

My thoughts on this are pretty simple.

Real estate is great collateral for a loan. In other words, it's pretty easy to go to a bank and borrow $500,000 dollars against a house. The same is not really true for Bitcoin or many other assets.

So while I agree real estate doesn't have the potential upside of Bitcoin it can't be understated how beneficial it can be to have long term low risk leverage. If you manage your finances right you can use this to acquire more Bitcoin.

That said, it's not a no brainer. In the current high interest rate environment it might not be the right move to buy real estate right away. But over the long term it tends to work out because rent goes up with inflation and home loan repayments don't.

55 sats \ 2 replies \ @Undisciplined 30 Apr

I've always been reluctant to view land as an investment. We've always focused on what we need from the property, over what we think will appreciate best.

The exception I'd make though, is that if you think an area is going to grow for some reason, then there's nothing wrong with putting your money where your mouth is and buying some speculative land.

18 sats \ 1 reply \ @kepford OP 30 Apr

It clearly viewed as an investment worldwide today. Can be good or bad.

55 sats \ 0 replies \ @Undisciplined 30 Apr

For the reasons you laid out, though, it's usually suboptimal to treat it as an investment.

My father-in-law was always encouraging us to buy houses with this-or-that feature that he claimed was good for resale value. My attitude was always "but I don't want to pay the premium for features I don't care about, not to mention the extra taxes on a higher appraised home."

10 sats \ 9 replies \ @Coinsreporter 30 Apr

Bitcoin will allow businesses to think more generational vs. quarter to quarter. I can see a world where wealth bitcoiners own properties and rent them to young people.

That's why I asked earlier about investing in property as well. Now it's not that you can't diversify your portfolio, you jusr beed to think longer in time frames. Wealth should be hoarded for generations not for 3 months.

0 sats \ 8 replies \ @kepford OP 30 Apr

That quote is more about the melting ice cube and cheap debt fueled false growth.

0 sats \ 7 replies \ @Coinsreporter 30 Apr

Yes you're right. I agree. My only point is that if you have got enough wealth (without debt of course), you can buy some good properties as well.

0 sats \ 6 replies \ @kepford OP 30 Apr

Sure. But its actually more risky to use real estate as a substitute for gold or bitcoin. Inferior. Buying apartments to run a business is different. Buying land in a growing area is a speculation that could pay off. Those are different from bitcoin and gold.

0 sats \ 5 replies \ @Coinsreporter 30 Apr

Yes it is more risky. But it's and it'll always be better than stocks and Fiat savings that people often do just because they think their wealth is secured by the governments.

0 sats \ 4 replies \ @kepford OP 30 Apr

Not true. In recent years people have lost millions in real estate. That's my point. It depends. Saying stocks is the same. Which stocks? Each is different. Fiat has inflation but depending on the property you could be better off in cash.

The mistake here is generalizing it as good or bad. Can be either depending on the situated. Its not a single thing like bitcoin or gold.

0 sats \ 3 replies \ @Coinsreporter 30 Apr

People lost millions just because they couldn't HODL.

0 sats \ 2 replies \ @kepford OP 30 Apr

Yeah that is true in some cases but its more than that. There's a bubble. Not sure if you get what I'm saying or just want to argue. I've made my point repeatedly.

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20 sats \ 1 reply \ @nym 30 Apr

Land and real estate prices have consistently gone up on a low-time preference.

6 sats \ 0 replies \ @TwoLargePizzas 1 May

Real estate has generally gone up in tandem with currency debasement. You can see this if you plot real estate prices over monetary inflation.

This is not a bad thing per se. It means dollars stored in real estate have kept their purchasing power over time. If you borrowed dollars to buy real estate that's a pretty good deal because you've created an inflation hedge on the banks freshly printed money. Of course, your loan interest rates do play a role in this equation.

So strictly speaking, while real estate prices have gone up the 'value' of real estate has stayed relatively stable in purchasing power terms.

0 sats \ 0 replies \ @DiracDelta 30 Apr

Yes, it is a business, and with low barriers like restaurants, you will have as much luck gaining an edge as in restaurants. Some people will manage to make large "chains" by figuring out how to improve the technology of buildings itself, while most will eek out a meager living for the huge risk burden they take on a bitcoin standard. Most people will not be in the real estate business because it is inherently low ROI.

Most people will not be in most businesses that they know nothing about. The fuck do you know about real estate? Do you know the difference between a blue-phosphor-pump and a violet-phosphor-pump LED? etc.

This isn't esoteric or insightful, but like managing real estate today, fiat puts a large premium in people who manage to verbosely say rather straightforward and obvious things that scratch the surface of ideas and are <20% wrong to the choir like Lyn Alden.