In the realm of financial discussions, the age-old debate of real estate versus Bitcoin as a store of value continues to stir up passionate conversations. While both assets have their merits, a deeper exploration reveals that Bitcoin’s attributes, grounded in scarcity, divisibility, verifiability, portability, and more, establish it as a superior store of value compared to traditional real estate holdings.
Scarcity: The Immutable Foundation
First of all, the scarcity of an asset forms the bedrock of its value preservation potential. Bitcoin emerges as a victor here, as its intrinsic scarcity is meticulously coded into its framework. Unlike real estate, which can be subject to urban expansion and zoning changes, Bitcoin’s cap of 21 million coins ensures an unparalleled scarcity, immune to manipulation.
Divisibility: A Transactional Triumph
Second, Bitcoin’s divisibility transcends that of real estate, offering the flexibility to conduct microtransactions seamlessly. With divisibility down to satoshis, Bitcoin enables universal accessibility, contrasting with the challenges of fractional ownership models in real estate.
Verifiability: Trust in Transparency
Third, verifying ownership and authenticity are key for any store of value. Bitcoin’s blockchain architecture, open to all and free from third-party dependence, stands in stark contrast to the intricate and often murky processes of verifying real estate titles.
Portability: A Global Powerhouse
Fourth, the portability of an asset ensures global trade and safeguards against theft. Bitcoin’s digital nature allows for instant cross-border transactions at minimal costs. Real estate, on the other hand, grapples with geographic limitations and the logistical complexities of transport.
Durability: Battling the Elements
Fifth, both Bitcoin and real estate seek to be enduring stores of value. Bitcoin’s decentralized framework, bolstered by robust network defenses, demonstrates increasing resilience against cyberattacks and regulatory hurdles, setting it apart from real estate’s vulnerability to natural disasters and geopolitical instability.
Censorship Resistance: The Power of Peer-to-Peer
Sixth, the capacity to resist censorship or confiscation elevates Bitcoin’s status as a store of value. Bitcoin’s decentralized network ensures that transactions cannot be impeded by external forces, whereas real estate can fall prey to government control or expropriation.
Accessibility: Bridging the Divide
Seventh, accessibility to all strata of society is crucial for a superior store of value. Bitcoin’s ease of access, requiring only an internet connection or SMS, contrasts with real estate’s escalating entry barriers, especially in high-priced markets, potentially alienating prospective investors.
Liquidity: The Need for Speed
Last but not least, Bitcoin’s liquidity outshines that of real estate, with its ability to be swiftly converted into value without loss. Real estate’s time-consuming sale processes and market fluctuations underscore Bitcoin’s advantage in enabling swift, low-impact transactions.
A Word of Caution
It should be noted that while Bitcoin showcases compelling advantages as a store of value, it is essential to approach its potential with due diligence. The inherent volatility of the cryptocurrency market, coupled with its relatively brief history, warrants careful consideration. Additionally, the shortage of physical utility and the enduring track record of real estate lend credence to the stability of tangible assets.
Bitcoin’s ascendancy as a store of value is underscored by its technological prowess and innate attributes, making it a compelling contender against real estate. Its scarcity, divisibility, verifiability, portability, and censorship resistance grant it a unique standing in the financial landscape. However, investors must weigh these virtues against the inherent risks and established legacy of real estate, forging a balanced path toward preserving and growing wealth. In the end, everything boils down to investors’ preferences and risk appetite.
Giancarlo is an economist by profession with a career spanning nearly two decades. His professional journey has seen him assume vital roles in various government and private organizations such as the Department of the Interior and Local Government (DILG), the National Economic and Development Authority (NEDA), Megaworld Corporation, and the China Banking Corporation in the Republic of the Philippines.
In addition to his civic and corporate pursuits, his forward-thinking approach has led him to manage several prominent websites in the banking and finance sector, notably the Australia-based RateChoice, where he immersed himself in the world of emerging financial technologies and where he found particular interest in Bitcoin all the way back to 2013.
Prior to his addition to Blockzeit’s dynamic team, he held an essential role as Project Manager for initiatives encompassing blockchain, stablecoin, mining, special economic zone development, and iGaming. This noteworthy chapter in his career unfolded under the auspices of InPlan Consultancy Services, Inc., the think-tank of IMPERO Consortium Management Corporation headquartered in Manila, Philippines, and Tokyo, Japan. InPlan, led by a distinguished retired Cabinet member of the Philippines, collaborates directly with IMPERO’s core management team, contributing to strategic planning and business development endeavors.