A large slice of tropical paradise bordering the Coral Sea has become one of the first properties in the Queensland region to go up for sale for cryptocurrencies.
Aquila Cove, 100km south of Mackay, has been owned by the same family for generations and recently hit the market for 30 bitcoins or 440 ethereum.
John De Costa, the owner of the 162-acre lot, said he had been trying to sell the place on and off for five years for $ 2.2 million.
At the current market rate, 30 bitcoins equals roughly $ 2,040,013.
“We had people who came over a couple of weeks ago and looked at it specifically because they have bitcoins and they believe in the bitcoin philosophy.
“They were looking for a property that would offer them and their families a refuge from the world of COVID.”
Mr. De Costa is an account manager for a rural supply company and it was his son who introduced him to the world of cryptocurrencies.
Last January, he said his son “got lucky”, investing a few thousand of his savings in bitcoin when it crashed, which tripled in value over the next month.
“He explained it to us, and we agree with the philosophy of cryptocurrencies, and bitcoin in particular,” De Costa said.
A first for regional Queensland
Antonia Mercorella, executive director of the Queensland Institute of Real Estate, said this was probably the first time she had seen a regional Queensland property being offered for sale in this way.
Mercorella said the infrastructure established for real estate transactions was clearly based on Australian dollars.
“I don’t think any of those processes are set up to recognize bitcoin,” he said.
“I think a prudent real estate practitioner if asked to market a property in this way would be telling his supplier to seek legal advice on this.”
De Costa said that he realized that the use of crypto was not very common or not widely understood in Australia, but believed it was gaining momentum.
“Around the world, there have been a lot of bitcoin sales,” he said.
De Costa said he suspected that using bitcoin could attract an international buyer.
“For them, transferring bitcoins to me is a simple, low-cost and almost no-cost operation,” he said.
“The actual transfer of money is instantaneous and there are no third parties involved.
“As long as for them to convert their currencies to Australian dollars and pay all the commissions and fees that the bank will charge for the transfer of that amount of money, there is also that logistical advantage.”
But like any sale, this one will involve negotiation.
“If the price of bitcoin falls to $ 20,000, obviously our price of bitcoin will have to go up,” he said.
What is bitcoin?
Bitcoin is a decentralized digital payment method in which transactions are not verified by a central bank or an authority, but by a chain of blocks.
They are stored in a digital wallet and there is also a limited supply.
Dr Christoph Breidbach from the University of Queensland School of Business said that a digital wallet was essentially like an app on your phone.
“You have a unique identifier, the public key, and then there is also a private key,” he said.
“With the keys, you can control the transfer of digital currency from one wallet to another.”
Dr. Breidbach said that there was still a lot of news in facilitated cryptocurrency transactions.
“That means it somehow protects against inflation.”
Dr. Breidbach said that one of the benefits of putting a property on the bitcoin market was the publicity it generated.
“If I ever sell a property, I could do it myself,” said Dr. Breidbach.
He said that the owner was fundamentally confident in the idea that the price of bitcoin would continue to rise. If that were the case, they would get a significantly higher monetary return than selling for Australian dollars.
How does the transaction work?
A record of the transaction is kept on the blockchain.
Dr. Breidbach said that to the best of his knowledge, there were no legal restrictions on selling a property for bitcoins.
“I mean, if you have a house, you could sell it for cocoa beans if you wanted, or you could trade it for a bean,” he said.
Can the government regulate the unregulated?
Last week, the federal government announced plans to investigate a custody regime to protect consumers who trade cryptocurrencies.
Dr. Breidbach said that the talks around decentralized finance were actually about making the current financial system obsolete.
He said that what can happen is the introduction of digital currencies issued by the central bank.
This is something that Treasurer Josh Frydenberg hinted at this week.
“That would essentially mean a centralized digital currency run by a government and that of course creates a lot of problems and challenges,” said Dr. Breidbach.
“I hope we don’t go down that road.”