First Real Estate-backed Coin
2018 marks the entrance of the world’s first real estate crytpocurrency.
A startup in California, Aperture Real Estate Ventures, launched a real estate-backed cryptocurrency this February.
The company states it gives investors an “opportunity to own a professionally managed portfolio of real estate assets via the blockchain.” When an investor buys their so-called Property Coin, the person is buying into a fund backed by the company’s fix-and-flip portfolio. Money raised in the initial coin offering is invested in properties around the country selected by the firm’s staff and its own algorithm, according to a report in Inman. Property Coin is built on Ethereum, a blockchain platform with an $84 billion market cap, second to Bitcoin worldwide.
Aperture’s Co-CEO Andrew Jewett stated that each Property Coin holder “owns a fractionalized piece of assets owned by that entity, and as we reinvest profits into property, the underlying value will go up.” This isn’t a new concept, however Aperture said it’s the first company to do so via cryptocurrency. The firm called it an attempt to democratize “country club” style fix-and-flip home investment deals that are typically only available to investors with big wallets.
It also sees the cryptocurrency as transparent, because investors can see what backs its value and aren’t subject “to the wild fluctuations in the belief of the value of that asset,” Jewett said. That’s a common criticism of Bitcoin — its value is largely speculative.
Bitcoin operates through a series of blocks of code known as blockchain that creates a record of every transaction and every access point. Keyholders, who each have a unique access code, can access a blockchain from virtually anywhere and can share important data with all parties in a transaction. But the system is also vulnerable to hacking, as seen most recently when the Japanese exchange Coincheck reported losing $530 million in cryptocurrency.
When it comes to Aperture’s Property Coin, there are some restrictions for investors. Property Coin will sell for $50 per coin at its initial offering on February 26, and U.S. investors must purchase a minimum of $1,000 worth of coins. Outside the U.S., investors can get in with just a $100 investment. [Inman] – Dennis Lynch
Source: The Real Deal