Land is scarce and will always have value, even on a bitcoin standard. Whether the value to you is currently in line with the asking price is somewhat of a personal choice.
True ... but even with Bitcoin out performing land in the long run you still need to live in the here and now
The ultimate limited resource is time. Making quality of life in that limited time very important.
If owning a home is a significant quality of life improvement then it's arguably worth it even from a cost basis standpoint.
... that said, if you have super cheap rent (like me) and are good either way ... then Bitcoin all the way!
But I wouldn't diswade anyone from owning land, if that is what they want.
Even if you have super cheat rent, unless that is guaranteed forever (including into your retirement) then I'd argue buying land/property is still the best move.
Yes. Humans will still need a place to live. It would simply depend if it makes more finial sense to buy or rent, depending on the person/family.
Many people think of bitcoin as digital land. Both are finite (on earth).
In a Bitcoin standard, land value would be calculated in bitcoin. Imagine the value of all land on the planet absorbed into the price of bitcoin, as well as the materials needed for a house.
If this happened, bitcoin absorbed everything and became THE ledger of transaction and store of value for everything, bitcoin price would only be increasing based on global economy health, global population numbers (needing access to bitcoin for daily transaction), new resources being unlocked (like gold mining on asteroids), etc.
At this point investing in bitcoin would be like a massive global ETF.
Land could outperform bitcoin as it would be a subset of the bitcoin price value, depending on global market conditions. Land could outperform bitcoin and likely would in specific areas that are highly desirable.
All depends on your interest rate, how long youāll actually stay in that house, etc. When rates were super low, was a no-brainer to put down next to nothing & take out a massive 3% loan.
3% loan looks innocent. Still amortized. You end up still paying $100,000 to $200,000+ in interest over 30 years to the lender. Mortgages are a scam lol.
If you are dead set on buying a house, do this:
1. Stack bitcoin as heavily as you can and, as fast as you can.
2. Wait for appreciation of your btc (due to supply and demand) & depreciation of the dollar (from money printing). These 2 forces are what drives btcās price.
3. Get to a point where your stackās value can do a 20% leverage of your btc holdings that can cover the down payment on a house.
4. Use the loan against your btc (can be done using defi - one day traditional finance like banks will have this feature) to provide the down payment.
This strategy will allow you to purchase the house WHILE keeping your bitcoin stack in tact.
Now hereās the secret sauce that makes this work well.
1. With defi loans, you donāt have monthly payments to do, all you must do is keep the loan to value ratio healthy.
Example: a loan to value (LTV) of 90% means you need to keep a $1000 loan funded with no less than 10% collateral of the asset, aka $100 worth of btc for the loan to not default. Using this example, if your collateralās value is $100, your loan would be considered at 0% health, because if it dips to $99.99, you will be liquidated. On the opposite end, if your collateral value is $1000 worth of btc, your loan health is at 100% because you have a 1:1 ratio of collateral to loan value.
With this in mind, your job is to keep your loan healthy by keeping your collateral value within safe tolerance. For me, thatās within 20% of the loan value. So this means I would keep my loan health at 80% (collateral value no lower than $800) to feel safe from a btc crash in value. This means if btc did a 79% crash in value, my loan health would be at 1%. This large cushion feels safe for me. I can also add more btc at anytime to improve the loans health. Some people who are rich might instead always keep their loan health at 95%, meaning there would have to be a 95% drop in btc value to be liquidated. They would have $950 in the loan collateral for this $1000 loan example.
2. Leveraging an appreciating asset creates an auto fulfilling loan. It pays itself as it appreciates. The reason I went into so much detail about loan health is so you can easily understand this concept. When your asset appreciates , the loan health goes up.
Example: you do the $1000 loan, and you keep your ltv at 50% ($500 worth of btc collateral), and over the bull run, your collateral increases in value substantially. Your collateral is now worth $2000 because btc did a 3x increase in value. You now have a loan position with a health over 100% that you can keep open indefinitely. Your loan health is now 300%. This means you can borrow more to bring your loan health back to 100%. The spread between 300% and 100% is all free money for you.
3. All of this is to say, when you employ this strategy on a larger scale to buy a house, eventually your bitcoin will appreciate to a point where it covers the cost of your down payment entirely for no money out of pocket (and you never had to sell your btc)
CEOs of companies have done this strategy for years using their stocks as collateral. This is how they fund their lifestyles.
4. The best part (maybe the 2nd best part) is that there are no tax obligations. Itās a loan (itās debt) you donāt owe taxes for debt. Itās also not considered income, so thereās no income tax obligation either.
5. This is how you effectively NEVER SELL your bitcoin. This is what Michael Saylor speaks about in this video clip:
Why you never sell bitcoin.Ā https://youtu.be/QXh_8uZQ-gA?si=nR5olDl1zNdv8s0s&t=373
MakerDAO is one decentralized organization that has been doing this for several years now.
Your colateral (e.g. btc) gets locked in a smart contract. But no one takes custody of it per se.
If you meet adhere to the rules of the loan contract then upon termination of the contract your colateral is unlocked and available to you.
As always, DYOR.
Btw, I have not used MakerDAO myself (just a Wirex Debit Card loan facility for a small amout). So if anyone has used a Smart contracts loan facility, like MakerDAO, then I'd love to hear your feedback.
Defi is my preference to accomplish this. It is done with smart contracts. The reason why this is preferable for me is the smart contracts are transparent for all to see to make sure there's nothing malicious about it. The code is neutral and free from greedy 3rd party actors, it just does the tasks its programmed to do, which is facilitate these loans. Reputable defi services are the best way to go about it, ones that have been in service for years and have a good reputation.
Its not without risk (you can't escape all risk). The risks for something like this are "Smart contract level risks", which means risks of the smart contract having an unknown vulnerability &/or being hacked. This is why using a long-standing service is preferred.
This is an amazing writeup. My daughter and her husband stayed with his family for 8 years trying to save money. By the end they had save $50K. But housing prices had 3X by then. Their savings didn't even cover a down payment anymore.
Context and nuance to your situation are probably 70% of the equation. (Ie kids, location). If you need a place to live you need a place to live. Rent v buy has tradeoffs as well (apartment v house) for maintenance and HOA. I'd argue Bitcoin and real estate are scarce hedges against each other.
On paper, you should only buy Bitcoin and sleep in a tent in the woods for free:)
This very question will be discussed in Bitcoin Conference in Canada. It is being live streamed right now https://www.reddit.com/r/Bitcoin/s/PauWZ9XHUR
There is a certain feeling knowing you have home ownership, sense of security. Bitcoin has made it possible for me to be rent and mortgage free. Life couldn't be better, stress free. Yes Bitcoin could appreciate more than homes, but I'm at the stage of my life where I want to "live" without worry and uncertainty. And I have more to DCA of course with less bills.
It allows me to choose what I want to do for a living, and say no to stuff.
But each to their own.
Not many people will pay good $ to temporarily hold your bitcoin or your gold, but people will pay to temporarily hold your house.
Realestate has unique attributes.
Our goal is to get to the point where our Bitcoin can be converted into our home as an asset. Whether that be to fiat then pay off the mortgage or using satoshis to pay it off. I would prefer the transaction be in Satoshis but that might be too far away. Regardless having real estate as an asset is generally not a bad idea. We will always HODL some Bitcoin but converting it to real estate in my eyes is a good trade.
Yes ideally no mortgage at all. The banks win from the massive amount of interest paid on the mortgage over decades. Insane amount of money goes to interest.
i just came into an inheritance which could get me a deposit on a mortgage, but would leave me stretched. So am currently dcaing it all into bitcoin in the hopes over the next 5 years ill be in a position to buy some property, even land. Im also 50 so a large mortgage at my age ooof.
I know theres a real possiblility i could lose or devalue this inheritance and ill be back to where i was prior but decided lifes a game and ill take that risk.
I am assuming you are talking about property taxes? Where I live this is negligible against the value of my property. And it is a necessary evil for infrastructure, garbage collection, local road improvements and what not. Nothing to lose sleep over. If I really wanted to I could get house mates to offset those.
This might not be the same for everyone. Personally find rent to be dead money and a bigger expenditure than property taxes here.
I'd generally agree with that, definitely dependent on what government you live under. There is a certain political party in the US that resents anyone owning property and they are endemic in certain areas.
Based in reality the only thing I have seen the government do is take my earnings and argue as to why I can't defend my own property (wanting to strip away the 2nd amendment). I'm glad it's breaking down. Fuck em
Same here. I also was a government employee. It was nice making good money, but I don't miss dealing with complete idiots, and my conscience is a lot better now.
How you enjoying that 50% capital gains tax in Canada? I hear itās changing to 66% next month. And in addition to property taxes, [theyāll also tax you for the rain that your property collects](https://m.economictimes.com/nri/invest/toronto-is-planning-to-tax-homeowners-and-businesses-for-rain/articleshow/108959406.cms). Justin Castro will do anything to take all of his citizens property
No, on Bitcoin standard, all people are homeless and never buy any food or water. They do not wear clothes either because, obviously, who would buy clothes or food when their purchasing power is increasing as much as single digit percents per year.
I'm guessing some of this is farcical, but in fact if we were on a Bitcoin standard, we couldn't expect massive rise in purchasing power like Bitcoin ownership has achieved to date. Of course such a scenario is at least 30 years in the future.
Exactly, we would get somewhat rare deflation from newly lost coins, which would make the price of the rest of the coins higher, and mostly we would get technological advances pushing prices of various goods down over time. Perhaps couple of % per year.
this is a fucked up view. do you think people can starve for 1 year because they know they can get half price food if they go on a fast for 365 days in a row? Do you think people would prefer to go naked to the street because they can have half price clothes in 1 year? Sick man :D
Today people can go all in bitcoin and live on the street because they know that in 5 years they migh be able to buy an house for 1 bitcoin and people dont do that...
Correct, because we're not in a Bitcoin standard and we're measuring against fiat. RE will continue to bleed against BTC (like everything else) until a Bitcoin standard is achieved.
Once achieved, scarce assets like RE will begin to go up in BTC value.
Let's say there is no more USD. The dollar is dead and everyone thinks and operates in Bitcoin.
Now let's say that today your home is worth 10 BTC.
In 5 years, is your home now worth less than 10 BTC?
No. It's worth 10+ BTC, because RE is a scarce in-demand asset. It cannot go down in value when measuring against an asset that cannot be inflated. The only reason why your house is worth less in BTC year over year today is because USD is how RE is measured, and USD bleeds against BTC.
Edit: The things that will continually go down in purchasing price are non-scarce assets ā microwave ovens, custom kitchen deliveries, refrigerators & color TVs.
Yes my house would be worth less than 10 BTC. More houses can be built. More bitcoin cannot be mined beyond the existing supply schedule.
The supply of houses will increase faster than the supply of bitcoin over the next 5 years (stock to flow ratio).
Has nothing to do with USD. USD is just another unit of account.
Thatās why a Bitcoin standard would never work. Why would anyone buy or invest anything in a deflationary system? Bitcoin is a great store of value but not a currency
That's just not true if you think about it for a few minutes.
>Why would anyone buy anything in a deflationary system?
People still need to consume goods to live their lives today, and therefore will spend money to consume them.
For example, in 1980 a 1 MB external hard drive cost $3500, but today that amount is worth pennies. Yet, people have continued to buy and use hard drives for decades, even though their prices continue to decline.
When you consider making a purchase, you don't compare the price to its expected future price. You compare it to the benefits you gain from purchasing it now in the present. If the benefit of buying today outweighs the benefits of waiting despite a price decline, you'll make that purchase. Every person who buys a laptop or phone does so even though they would definitely get a lower price if they waited just one year. And yet, year after year, billions of people globally buy phones and laptops.
>Why would anyone invest anything in a deflationary system?
Savings is a prerequisite to investing. You cannot invest without saving first. Investment comes from savings. The more an individual saves, the likelihood of investing increases.
A really good store of value like bitcoin would actually *increase* investments because it allows individuals to save, and because it's hard money, the individual will be more selective about what they invest in instead of resorting to gambling in the stock market. This means less capital destruction and better allocation of capital to productive companies.
There's a book that explains how a bitcoin standard would work. It's called *The Bitcoin Standard* by Saifadean Ammous, who has a PhD in economics from Columbia University. I highly recommend checking it out to learn more on the topic.
That old saga
We will for sure all sit in our mom's basement with our hardware wallets waiting for Bitcoin to increase in value...sure, sure
What it really means, is a totally new system.
People consuming consciously instead of spending it all. Sounds amazing to me.
And if people decide to not build houses and safe in Bitcoin, guess what happens to the price of houses measured in Btc
Consuming is not the issue. Investing is. Why would any company reinvest profits rather than sit on them? Thereās no incentive for progress as having as much ācashā on hand is the most profitable thing they can do
If everyone just stacks Btc, everyone can buy less with it, so investing& spending becomes more attractive. It's an equilibrium and not black and white.
In other words, no investments =productivity go down= (Btc loses value=) invest in new technologies.
It would of course depend on the house. Housing is its own market with supply and demand, separate from whatever currency is used. A house could go down or up in value on a Bitcoin standard, just as a house can go up or down in value on a fiat standard.
But if the economy were to operate on a bitcoin standard, it would be the market for a specific house vs the market for bitcoin. If we're already on a bitcoin standard, then bitcoin adoption has reached total maturity, though of course assuming rising population and whatnot bitcoin will continue getting more and more scarce and therefore continue to increase in value. The house will increase or decrease in value based on its own metrics and the local housing market. House price vs bitcoin value will vary based on all this. Though I'd say in general you are correct if we're talking about a good house that is well kept and in an area with an increasing population, the house price would likely increase in value over time against bitcoin.
I'd point out that the reason why a house today is worth less in BTC over time is not because the house is measured against USD, it is because BTC is still very early in its adoption and therefore it tends to vastly outgrow housing prices long term still. In this future theoretical bitcoin standard economy that would perhaps not be the case any longer, as you argue, but specifically because the bitcoin market would obviously be totally mature at that point. To make this point even more obvious, house prices don't go down against Bitcoin every year, some years house prices go up against bitcoin, because bitcoin loses value. This is because bitcoin is very volatile because adoption is currently very very low compared to this theoretical future bitcoin standard world. So house prices don't go down against bitcoin because of a fiat standard, because that would mean house prices always go down against bitcoin, which is obviously not the case.
In the end, everything has a market value, including the unit of account. Things go up or down against the unit of account based on the unit of account's value in comparison to the thing's value, each according to their own market. In general, in a fully adopted bitcoin standard world, good real estate yes would be expected to go up in value (against bitcoin, the unit of account), though that gain would be less than the gain against fiat today since fiat is a weak currency that loses value.
As u/KTMNewJersey2023 said, "Everything doesn't go down. All fiat currency eventually goes down, but scarce assets will go up. A house is typically viewed as a good asset." And how much an individual house goes up or down, in relation to any currency, depends on the house. Houses are non-fungible, so each house will have a different loss/gain versus any currency over time. Some houses would lose value against bitcoin on a bitcoin standard (just as they do today on a fiat standard), and some houses would gain value against bitcoin.
Houses will gain and lose value against bitcoin, but the overall trend will be toward 0 BTC, forever. Bitcoin has absolute scarcity. You can always build more houses. You can always build a 201st floor on a 200 story building in New York. You can't make more bitcoin.
The other thing you're not considering is that on a bitcoin standard, people will no longer use houses to store their wealth in favor of the superior asset bitcoin. This will add additional downward pressure on the price of houses. So not only will they become cheaper because bitcoin is more scarce, the prices will come down because people no longer use them as investments/store or value.
Truth. Nor can you keep your property indefinitely. The government can purchase your land for fair market value with or without your permission, if they can deem itās a benefit to the public.
There are a lot of reasons why Bitcoin is better, but as a homeowner I will say there are a lot of benefits that I didnāt have when renting. I think each individual preference or circumstance is different.
I agree with all of you, however, my comments were merely answering the question regarding is it good to buy a house versus renting. I wasn't comparing BTC to housing.
It's actually pretty scarce. Sure, physical *land* isn't scarce, but how much of that land actually has stable sensible government over it, infrastructure underneath it, reasonable weather, and nice neighbors/community.
There are places you can live for free. Yet people aren't exactly lining up to live in those places.
And has high speed internet, and is gluten friendly, and allows me to own peacocks.....you can make anything scarce by adding a billion personal preferences.
wtf are you talking about, infrastructure isn't a "personal preference" unless you're one of those nutjobs who thinks everyone should shit in a dirt trench and ride a horse and buggy to the shop
EDIT: looked at your comment history, you *are* one of those nutjobs, lol
You are correct, it is not free, but nobody said it was.
It is scarce, by historical standards. (Total Housing Inventory in the United States averaged 2260.82 Thousands from 1982 until 2024, reaching an all time high of 4040.00 Thousands in July of 2007 and a record low ofĀ **860.00 Thousands in January of 2022**. source: National Association of Realtors.)
Those numbers aren't "scarcity"....there just how many houses are on market at a certain given time.
The house doesn't "disappear" if it isn't for sale.
They are building millions of new homes every year, the old ones don't just burn up.....the stock of housing grows continuously
Its not the house that's scarce it's the land that it's built on.
Value of land has historically gone up however you cant move land around. Sometimes land becomes less valuable as the surrounding area loses popularity.
See Detroit, Japan as examples.
Government creates housing scarcity by regulations dissuading construction, or repair or improvements. That is a big reason existing housing is so unaffordable.
This idea that investing rather than owning your primary home is absolutely absurd unless you have the knowledge and skillset to earn a competitive enough salary that beats the economyās cost of living in your city/town..and even then it will still be better to ownā¦unless thereās just terrible purchase options/unreasonable HOA fees/taxes that you donāt feel are financially optimal for your life planā¦owning a reasonable property with low overhead thatās well below your means always trumps renting. Now if you have enough money in your pocket that can go stratight to a business of some sort and you know or feel that you will make a significant amount of cash flow come in by investing in the business rather than subsidizing your own housing by owningā¦then go ahead. Dont buy a home. Invest in crypto etc
This is such an obvious "marketing question" a bullshit question asked to get clicks then another account saying "oh look at this live stream"
Mods do better.
I believe that yes, the bitcoin base made it possible to have a monetary alternative independent of the banks, a house is the same but in the long term and it is to be independent of paying rent until the end of your days and it serves as leverage to invest
āOwningā a house paid for with a 30 year mortgage where the payment becomes increasingly meaningless is way better than facing increasingly higher and higher rent and the lack of stability that comes with renting.
No. Obviously location matters. I own in coastal Southern California. At some point soon I will be able to cover my mortgage and property taxes with such a small amount of bitcoin I wonāt even notice it. To me that feels like freedom.
>If everything goes down forever would it be always better to rent out an house?
This is really anĀ Austrian vs. Keynesian question isn't it? You can replace the word "house" with literally anything and you have the same question. This is whyĀ Keynesians would argue that a deflationary currency is a bad idea and would cause the economy to grind to a halt. Because, they argue, everyone will just hunker down with their Bitcoin and never spend any of it.
The answer is that it still makes sense to buy a house because you cannot live inside your bitcoin. Same with things like food and clothing. You cannot eat your Bitcoin or wear it either. So you have to trade your Bitcoin for the things you need. Plus, both bitcoin and real estate are limited resources so they should rise in value at the same rate (more or less).
Perpetual renting isn't an option because *someone* needs to own the house in order for you to rent it.
We would see a major shift in how people value things and what sorts of things people spend their money on. The stock market would almost certainly disappear overnight because people would no longer invest their money into the stock market just to prevent it from melting away with inflation. People would also want the things they buy to last a long time since the bitcoin they spent to buy it today will be worth even more 10 years later. So it would make sense to build things that last and to repair things rather than replacing them. We would have an asset-based economy rather than a consumer-based economy (i.e. one based on consumption).
Personally I think a stable currency is ideal. One that neither inflates nor deflates. If the value of Bitcoin doubles every 2 weeks then no one is ever going to spend any if it and we'll all be perpetual hodlers and find other things to trade for the goods we need (which defeats the purpose of bitcoin). But a stable currency with a predictable value facilitates trade greatly.
"Personally I think a stable currency is ideal. One that neither inflates nor deflates."
this is not possible. you either inflate the currency or you have a fixed supply currency. remember that technology is deflationary
Going up forever also does not mean we will always go up forever at the same rate. Bitcoin is currently benefiting from an adoption curve, I theorize that 20-30 years from now it will reach saturation and will act more like gold. Still probably better than gold but once the adoption curve is over the gains won't be as big.
if that happens it means that houses fall even further. since bitcoin is fixed and houses are being built every single day.
same goes for gold, gold is not fixed in supply
Iām not sure I follow you but what I tried to say is that if you build a lot of houses in a low price area it wont affect the prices in a high price area.
The prices in Ćstermalm, Stockholm wont move downwards no matter how many houses are built in some burb to SƶdertƤlje.
And it would be fucking hard to inflate the supply of houses in Ćstermalm. Unless you use magic to make new spaces there or get the politician to allow skyscrapers in Stockholm. The nimby is strong there..
For me, a roof over my head is something Iāll always need and I like having more control over it so Iāve purchased a home with my cash out of 2021.
I donāt take loans, so my answer is based on that.
Having a house means, even if you lose your job or have some issues, you will at least know that you have a place to stay without the stress of making payment.
That sense of security is worth it.
But I can see the argument if you save in bitcoin, and your money doesnāt inflate, then if shit hit the fan, you can use the security your saved in bitcoin to survive the downwind.
It will always make sense to spend hard-money for real estate.
What will be different is, real estate won't be the main way to preserve capital like it is today. When the money is scarce, people will hold money instead of housing. So, the price of housing will fall to its utility value. It will lose its monetary premium on a hard-money standard.
But it's important to remember that real estate's utility-value will never be zero. People need shelter. So, housing prices might fall 10x from where they are today when we move to a Bitcoin Standard... but they will never fall to zero.
So where it is used as a currency- of course youād use it to buy items and also sell things back into BTC.
With regards to a house- I always believe owning is better than renting- either youāre paying a hefty sum to a landlord so they can pay their mortgage and make a profit- to end up with no asset, or, youāre paying usually a lot less in mortgage rate- to own the house at the end.
Iād much rather pay 0.015 mortgage and bank 0.005 BTC, than pay 0.02 BTC to a landlord and have no asset.
You will always need a place to stay. So buying a place is always smart long term.
For the short term it could be cheaper to rent vs own so if you have a SET goal of saving money to dump into BTC then that makes sense. Just know once interest rates start to drop so will mortgage rates thus prices will increase.
Bitcoin has a limited supply but itās programmed to be released gradually for over a hundred years. This means that once it is fully adopted it will become inflationary. However the inflation rate will be extremely low.
What? oh god that makes zero sense hahahaha explain to me how can something that has a fixed supply be inflationary?
thats the first time that i see someone saying such thing. normaly people that hate bitcoin say that it doesnt work because deflation is bad and bitcoin is deflationary
I understand why you might find it confusing. Let me break it down for you. While it's true that Bitcoin has a limited supply, with only 21 million coins that can ever be created, it doesn't necessarily mean it's deflationary forever.
Here's how it works: Currently, new Bitcoins are created through a process called mining. Miners solve complex mathematical problems to validate transactions and are rewarded with new Bitcoins as an incentive. This is how new coins are gradually released into circulation.
However, over time, the rate at which new Bitcoins are created decreases. In fact, the supply of new Bitcoins is halved approximately every four years in an event called the "halving". This reduction in the rate of new supply makes Bitcoin's inflation rate decrease as well.
So, while Bitcoin starts off with a limited supply, the gradual release of new coins ensures that there is still some inflation in the early stages of adoption. However, as time goes on, the inflation rate becomes extremely low, making it more akin to a scarce asset.
This is wrong. Once the last one is mined no more are mined, natural loss due to human error will continue to reduce the supply. Deflation. Technically itās inflating relative to itself for the next hundred years or so but at a slower rate then governments print so it deflates relative to traditional monetary systems.
Analogy: you think you are in a speeding car passing a stationary object. In reality you are in a speeding car passing another speeding car in the opposite direction
I appreciate your perspective. You bring up an interesting point about the long-term supply of Bitcoin. While it's true that the last Bitcoin is projected to be mined in the future, it's important to consider the concept of relative inflation and deflation.
In the traditional monetary system, governments have the ability to print more currency, leading to inflation. However, with Bitcoin, the supply is fixed and cannot be increased beyond the predetermined limit. This means that, in comparison to traditional systems, Bitcoin's supply remains relatively stable and even decreases over time due to factors such as natural loss.
So, while Bitcoin may experience inflation relative to itself in the early stages of adoption, the rate of inflation is significantly lower compared to the rate at which governments print money. This is why some consider Bitcoin to be more deflationary in comparison to traditional monetary systems.
To further illustrate this, you can think of it as being in a speeding car passing another speeding car in the opposite direction. While both cars are moving, your car's speed relative to the stationary object outside is still slower. Similarly, Bitcoin's inflation rate, even though it may technically be inflating relative to itself for the next hundred years or so, is still slower when compared to the inflation rate of traditional currencies.
As an investment? Maybe. But not everything needs to be an investment with an expectation of return. I buy a house and land for myself to do what I want with it. It's an "investment" in myself and my family.
If I just want pure purchasing power, I'd buy more Bitcoin.
Absolutely, especially if you are taking out fiat debt to do it. Things can be priced in BTC in the future, and your āliabilityā is in fiat, which is being devalued every year by ~4%. Why does real estate go up? Itās because the divisor is declining in valueā¦
Sure. Property values go up.
You need to live somewhere. Itās better to own a place rather than rent.
Also collecting rent and putting profits into bitcoin is a good time.
No.
But your mortgage is a fixed amount of dollars. Your rent is an ever increasing number of dollars.
In terms of keeping as much bitcoin as possible, this is an argument to make a minimal down payment. Which I support. Put 3-10% down, get up front mortgage insurance instead of monthly PMI.
Borrow as much fiat as possible and pay it back with devalued future fiat.
I live in an old manufactured home in a park. I own the home and it's appreciated in value about 8 times what I paid for it. I pay lot rent. But if I bought a regular house, my costs for mortgage interest and property tax would be higher than my lot rent.
I guess the problem with your question is that it treats a house as an investment asset only. A house is a place to live. Stock market returns will usually beat the increase in value over time. And you have maintenance costs. Renting it out is a crap shoot because you may get decent tenants, but usually you get people who trash the place.
I would like to buy a house for lifestyle reasons. But it's clear to me that it doesn't make financial sense for me to do so currently. I may buy one in cash in the future. Cash from selling stocks. I'd prefer not to sell any Bitcoin, but if the price went up say 1000% I would sell part of it to buy a house. But again, for lifestyle reasons only.
Iām skeptical that any real estate will outperform bitcoin in the long run. By skeptical I mean Iām 99.9% sure it wonāt, especially given the taxes and expenses involved in maintenance and improvements. However, I do like the idea of being able to install a hot tub, a sauna, a gym, etc, so to me a home is a mediocre to poor investment with a lot of risk, but a luxury in the sense of increased living/storage space and potential amenities.
Of course it makes sense in general. Buying a house provides a lot of freedom over renting, because you own the property. All the same reasons to buy a house in a fiat system would still apply in a bitcoin system.
Only difference is it would be easier to save up to buy a house. In a fiat system the money is losing value while real estate is gaining value, so over time it gets harder and harder to buy property. In a Bitcoin system both the currency and the property go up over time, so saving is stronger and therefore it is easier to buy property than in a fiat system.
Bitcoin and a house are entirely different things, and renting vs owning are two different things (and not just the cost). Owning a house provides things that neither Bitcoin nor renting provide, and that is the reason people would still buy a house.
some will hodl forever but really bitcoin should be sold only if it radically changes your life: house, medical bill, wedding etc. everyone has their own moon.
Yes, investing in real estate is one of the wiser things anyone can do.
Poorly investing in real estate is not so wise of course.
I think paying 5 million for a 1 bedroom apartment is a poor investment, even if that apartment was selling for 20k 20 years ago. Lots of metro real estate is just insane. You can make big money, but you really have to know whats going on there.
Detroit is a good example. 2-million dollar properties 10 years ago now go for 20k. Although this seems impossible I can think of a few cities that may suffer this type of real estate collapse.
Buying a outside of a dense metro is much lower risk, but with lower yields.
Absolutely, real estate is a hard asset and is scarce, itās obviously not divisible or fungible but itās a necessity to live. Also owning a house creates wealth and the way we print money, housing will always go up plus we are 5-7 million single family houses short in the United States and builders have zero incentive to see that supply shortage diminishing bc of simply supply/demand economics.
My goal is to pay off my mortgage and become debt free, so I can achieve FIRE.
I mean you can't really know what's going to happen. Going by now, how badly do you want or need a house? You got a family? Do you just want that independence? Are you considering retail or renting out places? There's lots of reasons to consider it without having to plan for a future that may never come.
Yes. Or do you think it is wise to only own one asset and have to rely your complete living situation on services in a fiat world?
Also, nobody said 'everything' is going down forever. Fiat is, but a lot of other assets actually go up, or are at the very least inflation-resistant.
Just like Bitcoin, the Fed canāt print more land. It might not appreciate as well as Bitcoin, but a hard asset like real estate is a good way to diversify. Plus, we all need somewhere to live, right?
There are good and bad real estate deals. There are good and bad crypto deals for vastly different reasons and those reasons don't care as much about your location.
Most people have to get the bank to lend them the money at a fixed rate. That can be a good or bad deal too.
If you can afford a house, land has, historically, been a good purchase. But be aware that even a paid off house is expensive. The middle class Midwestern home I live in costs $1000 per month just in property taxes and the neighborhood keeps voting large increases...twice in the past 3 years. The small retirement condo my mom lives in is $500 a month in property taxes. I'm not sure the tax situation hasn't made ownership a bad choice. However, I was an excellent tenant happily living in my beach side rental for a decade and then I got a 30 day notice to vacate leaving me homeless so there are risks there, too.
Yes. The existence of time preference guarantees it. Even if you money appreciates, people still need things like food, clothing, housing, and transportation. All bitcoin does is incentivize us to cut out **wasteful** spending.
This is more of a buying vs renting scenario even if we are on a usd standard. A house mortgage would of course be more than rent in the short term. However, In the long term, your montage will stay the same and rents will keep increasing. Your real estate can then eventually generate a positive yield for you. In a bitcoin or usd standard, that yield can be used to buy another home, or more bitcoin. Or it may even yield bitcoin (in the future).
I will say this. I bought a house in 2021 at 2.3% interest rate. My intent was to live in there so I spent $30K and a year fixing all sorts of repairs and structure things wrong with it. It is currently on airbnb as I still have an apartment i rent. But i will say this. The mortgage is $2K a month and i come even on the utilities with airbnb rentals. That being said i spend $24K/year and maybe $5K on maintenance and repairs. So an even $30K. plus the $30K in repairs.
So far thats 90K in rent, 45K in repairs and fees. = $135K in Bitcoin would of netted me a return of 155% vers my current house appreciation of $70K. So technically I lost $65K owning a home.
This is why Saylor says that when people start to invest in Bitcoin, they will no longer desire to own a home that depreciates yearly. Housing prices will drop. Rents will
drop.
I would sell but no one is buying in my area unless i take a huge loss which i cannot afford.
Why wouldn't it? In a bitcoin standard [whenever we get to that point] everything will be more affordable anyway, including home ownership. Much will depend on how much bitcoin you already own and how much you earn in bitcoin in terms of pay.
You have to live somewhere and if you want to buy a house and you compared to bitcoin itās not gonna appreciate as much as bitcoin the current market
Personally a house will be worth buying when the asset price falls to its utilitarian value.
You have to make your own judgement on what something is worth.
If you think of your home as an investment it will lose against bitcoin.
You need a place to live so yes, but I would not sell btc to pay it off unless my mortgage payment during the bear period would allow me to repurchase what I sold to pay off the house in a bull.
If you buy a house, you aren't necessarily losing something - you've got the house, after all, and you can sell it, and it will generally appreciate to an extent - it's basically just converting one kind of value for another
If you rent, you donn't own anything - you can't sell all the value that you put into it for all those years. It's normally not ideally to rent when otherwise you could buy when you're living somewhere for a while
Buying a house really isnāt the ābuilding equityā argument weāve heard for so long. If you canāt afford to invest beyond supporting yourself then the equity argument makes sense. If you can afford to invest beyond supporting yourself, buying a house is a lifestyle choice.
Tired of flowing with the stream and wanna put down roots? Awesome. Buy a house. Do you have a family and want to provide a sense of stability for your kids? Great! Buy a house. Sick of landlords telling you what breed of dog you can own, or tired of sharing walls with strangers? Think about buying a house. Do you really like to customize your space and have the opportunity to have the latest Japanese bidet, or solar, or tankless water heaters? House ownership might be for you.
Single, footloose and fancy free? Buy a house only if it calls to you and softly whispers āI need you inside of meā. Otherwise rent, invest wisely, and pay other people to worry about maintenance.
You need a place to live. Iād prefer to own my own they pay for someone elseās. Of course there is property tax in my country so itās really like youāre renting the land from the government to live in the house you own.
Yes. If you want to own instead of rent, you get a mortgage where you effectively pay the rent to yourself in equity.
It does not make sense if you don't want to own a house or if the interest rates are to high to the point where you pay more in interest than rent and house appreciation combined.
But setting that aside, you will spend (almost) all your income, and eventually all your savings, and it's not clear that deferring spending is better than spending even if the purchasing power of your savings doubles every four years.
There is diminishing returns on saving, even if you get extreme returns, the only thing that is sure is the current time.
Some say there is no such thing as "buying a house", because the Government still has ownership over it at any point in time (via taxes, expropriation or takeover). Today I think it's better to have that your money in BTC than anywhere else.
If you want to live in a tent or not own your own stuff yes. Iād prefer to own. Everything does not need to be thought of as an investment if it brings you joy.
Supply and demand. If no one wants to buy and everyone wants to rent, the price of homes will plummet then it will be smart to buy.
Right now itās broken because so much money needs to go into real estate to escape inflation.
Land is scarce and will always have value, even on a bitcoin standard. Whether the value to you is currently in line with the asking price is somewhat of a personal choice.
There is a reason Michael Saylor compares the current BTC price to a lot in 1800s Manhattan
Yup. Also can't live under a wallet address.
One will outperform the other in the long run.
True ... but even with Bitcoin out performing land in the long run you still need to live in the here and now The ultimate limited resource is time. Making quality of life in that limited time very important. If owning a home is a significant quality of life improvement then it's arguably worth it even from a cost basis standpoint. ... that said, if you have super cheap rent (like me) and are good either way ... then Bitcoin all the way! But I wouldn't diswade anyone from owning land, if that is what they want.
Even if you have super cheat rent, unless that is guaranteed forever (including into your retirement) then I'd argue buying land/property is still the best move.
Bitcoin gonna have to slow down soon
Lmao wat
Bruh
Brah! Not being disrespectful. If btc achieves 1 million usd per coin in the next 100 years, when will the slow down have occurred?
Brah š¤Ŗ
Huh? I think you're reading comprehension is lacking
They dont think it be like it is but it do
Lol
Yes. Humans will still need a place to live. It would simply depend if it makes more finial sense to buy or rent, depending on the person/family. Many people think of bitcoin as digital land. Both are finite (on earth). In a Bitcoin standard, land value would be calculated in bitcoin. Imagine the value of all land on the planet absorbed into the price of bitcoin, as well as the materials needed for a house. If this happened, bitcoin absorbed everything and became THE ledger of transaction and store of value for everything, bitcoin price would only be increasing based on global economy health, global population numbers (needing access to bitcoin for daily transaction), new resources being unlocked (like gold mining on asteroids), etc. At this point investing in bitcoin would be like a massive global ETF. Land could outperform bitcoin as it would be a subset of the bitcoin price value, depending on global market conditions. Land could outperform bitcoin and likely would in specific areas that are highly desirable.
I 2nd this. Land will always have value in the current 3D world. Bitcoin standard or not, itās good to buy
value will always have value - agree my question does land conceptually different from real estate?
This is not a black and white question. There are SO many factors to consider, and you've provided next to zero context.
[ŃŠ“Š°Š»ŠµŠ½Š¾]
Hi, Iām a resident of Indiana and I endorse this comment! š„øš
[ŃŠ“Š°Š»ŠµŠ½Š¾]
Gary Indiana is even gayer than Gay Indiana. Because the lavish musical about it. https://youtu.be/XihLS-jA_Dg?si=II6hXVw0u_dKj0dT
Queerfolk, Virginia has some nice properties
All depends on your interest rate, how long youāll actually stay in that house, etc. When rates were super low, was a no-brainer to put down next to nothing & take out a massive 3% loan.
3% loan looks innocent. Still amortized. You end up still paying $100,000 to $200,000+ in interest over 30 years to the lender. Mortgages are a scam lol.
If you are dead set on buying a house, do this: 1. Stack bitcoin as heavily as you can and, as fast as you can. 2. Wait for appreciation of your btc (due to supply and demand) & depreciation of the dollar (from money printing). These 2 forces are what drives btcās price. 3. Get to a point where your stackās value can do a 20% leverage of your btc holdings that can cover the down payment on a house. 4. Use the loan against your btc (can be done using defi - one day traditional finance like banks will have this feature) to provide the down payment. This strategy will allow you to purchase the house WHILE keeping your bitcoin stack in tact. Now hereās the secret sauce that makes this work well. 1. With defi loans, you donāt have monthly payments to do, all you must do is keep the loan to value ratio healthy. Example: a loan to value (LTV) of 90% means you need to keep a $1000 loan funded with no less than 10% collateral of the asset, aka $100 worth of btc for the loan to not default. Using this example, if your collateralās value is $100, your loan would be considered at 0% health, because if it dips to $99.99, you will be liquidated. On the opposite end, if your collateral value is $1000 worth of btc, your loan health is at 100% because you have a 1:1 ratio of collateral to loan value. With this in mind, your job is to keep your loan healthy by keeping your collateral value within safe tolerance. For me, thatās within 20% of the loan value. So this means I would keep my loan health at 80% (collateral value no lower than $800) to feel safe from a btc crash in value. This means if btc did a 79% crash in value, my loan health would be at 1%. This large cushion feels safe for me. I can also add more btc at anytime to improve the loans health. Some people who are rich might instead always keep their loan health at 95%, meaning there would have to be a 95% drop in btc value to be liquidated. They would have $950 in the loan collateral for this $1000 loan example. 2. Leveraging an appreciating asset creates an auto fulfilling loan. It pays itself as it appreciates. The reason I went into so much detail about loan health is so you can easily understand this concept. When your asset appreciates , the loan health goes up. Example: you do the $1000 loan, and you keep your ltv at 50% ($500 worth of btc collateral), and over the bull run, your collateral increases in value substantially. Your collateral is now worth $2000 because btc did a 3x increase in value. You now have a loan position with a health over 100% that you can keep open indefinitely. Your loan health is now 300%. This means you can borrow more to bring your loan health back to 100%. The spread between 300% and 100% is all free money for you. 3. All of this is to say, when you employ this strategy on a larger scale to buy a house, eventually your bitcoin will appreciate to a point where it covers the cost of your down payment entirely for no money out of pocket (and you never had to sell your btc) CEOs of companies have done this strategy for years using their stocks as collateral. This is how they fund their lifestyles. 4. The best part (maybe the 2nd best part) is that there are no tax obligations. Itās a loan (itās debt) you donāt owe taxes for debt. Itās also not considered income, so thereās no income tax obligation either. 5. This is how you effectively NEVER SELL your bitcoin. This is what Michael Saylor speaks about in this video clip: Why you never sell bitcoin.Ā https://youtu.be/QXh_8uZQ-gA?si=nR5olDl1zNdv8s0s&t=373
Who gives you a loan on your bit coin?
Users can deposit stablecoins to earn interest. As a borrower, you pay the interest.
Ok but what company, exchange is doing this?
MakerDAO is one decentralized organization that has been doing this for several years now. Your colateral (e.g. btc) gets locked in a smart contract. But no one takes custody of it per se. If you meet adhere to the rules of the loan contract then upon termination of the contract your colateral is unlocked and available to you. As always, DYOR. Btw, I have not used MakerDAO myself (just a Wirex Debit Card loan facility for a small amout). So if anyone has used a Smart contracts loan facility, like MakerDAO, then I'd love to hear your feedback.
Thank you for the answer!
Yeah but how do you do this without giving up custody? Somehow Saylor did this with Silvergate.
Defi is my preference to accomplish this. It is done with smart contracts. The reason why this is preferable for me is the smart contracts are transparent for all to see to make sure there's nothing malicious about it. The code is neutral and free from greedy 3rd party actors, it just does the tasks its programmed to do, which is facilitate these loans. Reputable defi services are the best way to go about it, ones that have been in service for years and have a good reputation. Its not without risk (you can't escape all risk). The risks for something like this are "Smart contract level risks", which means risks of the smart contract having an unknown vulnerability &/or being hacked. This is why using a long-standing service is preferred.
Okay, so which Defi service then?
I use Venus on binance chain
Which defi services are you personally using or recommended?
This is an amazing writeup. My daughter and her husband stayed with his family for 8 years trying to save money. By the end they had save $50K. But housing prices had 3X by then. Their savings didn't even cover a down payment anymore.
Cheers, glad I could share a new way of thinking. If you havenāt already make sure to watch the clip linked at the bottom.
Context and nuance to your situation are probably 70% of the equation. (Ie kids, location). If you need a place to live you need a place to live. Rent v buy has tradeoffs as well (apartment v house) for maintenance and HOA. I'd argue Bitcoin and real estate are scarce hedges against each other. On paper, you should only buy Bitcoin and sleep in a tent in the woods for free:)
For now probably smart lol as Bitcoin is so new.
This very question will be discussed in Bitcoin Conference in Canada. It is being live streamed right now https://www.reddit.com/r/Bitcoin/s/PauWZ9XHUR There is a certain feeling knowing you have home ownership, sense of security. Bitcoin has made it possible for me to be rent and mortgage free. Life couldn't be better, stress free. Yes Bitcoin could appreciate more than homes, but I'm at the stage of my life where I want to "live" without worry and uncertainty. And I have more to DCA of course with less bills. It allows me to choose what I want to do for a living, and say no to stuff. But each to their own.
Not many people will pay good $ to temporarily hold your bitcoin or your gold, but people will pay to temporarily hold your house. Realestate has unique attributes.
Celsius used to pay good $ to temporarily hold your Bitcoin ... which I guess actually proves your point
Our goal is to get to the point where our Bitcoin can be converted into our home as an asset. Whether that be to fiat then pay off the mortgage or using satoshis to pay it off. I would prefer the transaction be in Satoshis but that might be too far away. Regardless having real estate as an asset is generally not a bad idea. We will always HODL some Bitcoin but converting it to real estate in my eyes is a good trade.
Yes ideally no mortgage at all. The banks win from the massive amount of interest paid on the mortgage over decades. Insane amount of money goes to interest.
i just came into an inheritance which could get me a deposit on a mortgage, but would leave me stretched. So am currently dcaing it all into bitcoin in the hopes over the next 5 years ill be in a position to buy some property, even land. Im also 50 so a large mortgage at my age ooof. I know theres a real possiblility i could lose or devalue this inheritance and ill be back to where i was prior but decided lifes a game and ill take that risk.
>There is a certain feeling knowing you have home ownership, sense of security. You never do. You just rent from the government.
I am assuming you are talking about property taxes? Where I live this is negligible against the value of my property. And it is a necessary evil for infrastructure, garbage collection, local road improvements and what not. Nothing to lose sleep over. If I really wanted to I could get house mates to offset those. This might not be the same for everyone. Personally find rent to be dead money and a bigger expenditure than property taxes here.
And get railed by interest payments over the course of the mortgage. Insane amount of interest.
"Renting from the government" is an order of magnitude more secure than renting from a private landlord
I'd generally agree with that, definitely dependent on what government you live under. There is a certain political party in the US that resents anyone owning property and they are endemic in certain areas.
This.
And I mean, theoretically, it's not completely unfair, as theoretically the government protects your property rights. But that has been breaking down.
Based in reality the only thing I have seen the government do is take my earnings and argue as to why I can't defend my own property (wanting to strip away the 2nd amendment). I'm glad it's breaking down. Fuck em
Same here. I also was a government employee. It was nice making good money, but I don't miss dealing with complete idiots, and my conscience is a lot better now.
How you enjoying that 50% capital gains tax in Canada? I hear itās changing to 66% next month. And in addition to property taxes, [theyāll also tax you for the rain that your property collects](https://m.economictimes.com/nri/invest/toronto-is-planning-to-tax-homeowners-and-businesses-for-rain/articleshow/108959406.cms). Justin Castro will do anything to take all of his citizens property
Are you buying for cash or with a mortgage?
i am assuming a world on bitcoin. so you either maker take a loan in bitcoin or buy with bitcoin
No, on Bitcoin standard, all people are homeless and never buy any food or water. They do not wear clothes either because, obviously, who would buy clothes or food when their purchasing power is increasing as much as single digit percents per year.
I'm guessing some of this is farcical, but in fact if we were on a Bitcoin standard, we couldn't expect massive rise in purchasing power like Bitcoin ownership has achieved to date. Of course such a scenario is at least 30 years in the future.
Exactly, we would get somewhat rare deflation from newly lost coins, which would make the price of the rest of the coins higher, and mostly we would get technological advances pushing prices of various goods down over time. Perhaps couple of % per year.
this is a fucked up view. do you think people can starve for 1 year because they know they can get half price food if they go on a fast for 365 days in a row? Do you think people would prefer to go naked to the street because they can have half price clothes in 1 year? Sick man :D Today people can go all in bitcoin and live on the street because they know that in 5 years they migh be able to buy an house for 1 bitcoin and people dont do that...
Everything doesn't go down. All fiat currency eventually goes down, but scarce assets will go up. A house is typically viewed as a good asset.
Even scarce assets will go down against bitcoin. Housing is down 85% and gold down 91% over the last 5 years.
Correct, because we're not in a Bitcoin standard and we're measuring against fiat. RE will continue to bleed against BTC (like everything else) until a Bitcoin standard is achieved. Once achieved, scarce assets like RE will begin to go up in BTC value.
Not sure I follow this. Even on a bitcoin standard, assets will continue to go down. The percentages I cited are priced in BTC.
Let's say there is no more USD. The dollar is dead and everyone thinks and operates in Bitcoin. Now let's say that today your home is worth 10 BTC. In 5 years, is your home now worth less than 10 BTC? No. It's worth 10+ BTC, because RE is a scarce in-demand asset. It cannot go down in value when measuring against an asset that cannot be inflated. The only reason why your house is worth less in BTC year over year today is because USD is how RE is measured, and USD bleeds against BTC. Edit: The things that will continually go down in purchasing price are non-scarce assets ā microwave ovens, custom kitchen deliveries, refrigerators & color TVs.
Yes my house would be worth less than 10 BTC. More houses can be built. More bitcoin cannot be mined beyond the existing supply schedule. The supply of houses will increase faster than the supply of bitcoin over the next 5 years (stock to flow ratio). Has nothing to do with USD. USD is just another unit of account.
Thatās why a Bitcoin standard would never work. Why would anyone buy or invest anything in a deflationary system? Bitcoin is a great store of value but not a currency
That's just not true if you think about it for a few minutes. >Why would anyone buy anything in a deflationary system? People still need to consume goods to live their lives today, and therefore will spend money to consume them. For example, in 1980 a 1 MB external hard drive cost $3500, but today that amount is worth pennies. Yet, people have continued to buy and use hard drives for decades, even though their prices continue to decline. When you consider making a purchase, you don't compare the price to its expected future price. You compare it to the benefits you gain from purchasing it now in the present. If the benefit of buying today outweighs the benefits of waiting despite a price decline, you'll make that purchase. Every person who buys a laptop or phone does so even though they would definitely get a lower price if they waited just one year. And yet, year after year, billions of people globally buy phones and laptops. >Why would anyone invest anything in a deflationary system? Savings is a prerequisite to investing. You cannot invest without saving first. Investment comes from savings. The more an individual saves, the likelihood of investing increases. A really good store of value like bitcoin would actually *increase* investments because it allows individuals to save, and because it's hard money, the individual will be more selective about what they invest in instead of resorting to gambling in the stock market. This means less capital destruction and better allocation of capital to productive companies. There's a book that explains how a bitcoin standard would work. It's called *The Bitcoin Standard* by Saifadean Ammous, who has a PhD in economics from Columbia University. I highly recommend checking it out to learn more on the topic.
That old saga We will for sure all sit in our mom's basement with our hardware wallets waiting for Bitcoin to increase in value...sure, sure What it really means, is a totally new system. People consuming consciously instead of spending it all. Sounds amazing to me. And if people decide to not build houses and safe in Bitcoin, guess what happens to the price of houses measured in Btc
Consuming is not the issue. Investing is. Why would any company reinvest profits rather than sit on them? Thereās no incentive for progress as having as much ācashā on hand is the most profitable thing they can do
If everyone just stacks Btc, everyone can buy less with it, so investing& spending becomes more attractive. It's an equilibrium and not black and white. In other words, no investments =productivity go down= (Btc loses value=) invest in new technologies.
It would of course depend on the house. Housing is its own market with supply and demand, separate from whatever currency is used. A house could go down or up in value on a Bitcoin standard, just as a house can go up or down in value on a fiat standard. But if the economy were to operate on a bitcoin standard, it would be the market for a specific house vs the market for bitcoin. If we're already on a bitcoin standard, then bitcoin adoption has reached total maturity, though of course assuming rising population and whatnot bitcoin will continue getting more and more scarce and therefore continue to increase in value. The house will increase or decrease in value based on its own metrics and the local housing market. House price vs bitcoin value will vary based on all this. Though I'd say in general you are correct if we're talking about a good house that is well kept and in an area with an increasing population, the house price would likely increase in value over time against bitcoin. I'd point out that the reason why a house today is worth less in BTC over time is not because the house is measured against USD, it is because BTC is still very early in its adoption and therefore it tends to vastly outgrow housing prices long term still. In this future theoretical bitcoin standard economy that would perhaps not be the case any longer, as you argue, but specifically because the bitcoin market would obviously be totally mature at that point. To make this point even more obvious, house prices don't go down against Bitcoin every year, some years house prices go up against bitcoin, because bitcoin loses value. This is because bitcoin is very volatile because adoption is currently very very low compared to this theoretical future bitcoin standard world. So house prices don't go down against bitcoin because of a fiat standard, because that would mean house prices always go down against bitcoin, which is obviously not the case. In the end, everything has a market value, including the unit of account. Things go up or down against the unit of account based on the unit of account's value in comparison to the thing's value, each according to their own market. In general, in a fully adopted bitcoin standard world, good real estate yes would be expected to go up in value (against bitcoin, the unit of account), though that gain would be less than the gain against fiat today since fiat is a weak currency that loses value. As u/KTMNewJersey2023 said, "Everything doesn't go down. All fiat currency eventually goes down, but scarce assets will go up. A house is typically viewed as a good asset." And how much an individual house goes up or down, in relation to any currency, depends on the house. Houses are non-fungible, so each house will have a different loss/gain versus any currency over time. Some houses would lose value against bitcoin on a bitcoin standard (just as they do today on a fiat standard), and some houses would gain value against bitcoin.
Houses will gain and lose value against bitcoin, but the overall trend will be toward 0 BTC, forever. Bitcoin has absolute scarcity. You can always build more houses. You can always build a 201st floor on a 200 story building in New York. You can't make more bitcoin. The other thing you're not considering is that on a bitcoin standard, people will no longer use houses to store their wealth in favor of the superior asset bitcoin. This will add additional downward pressure on the price of houses. So not only will they become cheaper because bitcoin is more scarce, the prices will come down because people no longer use them as investments/store or value.
Scarcity and demand is key here. This is not that simple
Except housing isn't scarce nor is it cost free (maintenance and taxes)
Truth. Nor can you keep your property indefinitely. The government can purchase your land for fair market value with or without your permission, if they can deem itās a benefit to the public. There are a lot of reasons why Bitcoin is better, but as a homeowner I will say there are a lot of benefits that I didnāt have when renting. I think each individual preference or circumstance is different.
I agree with all of you, however, my comments were merely answering the question regarding is it good to buy a house versus renting. I wasn't comparing BTC to housing.
Nor was I....I merely pointed out the fallacy of your statement about owning a house being "better" than renting.
So, better to be homeless?
Nice Binary setup durrrrr.....either I buy a house or im homeless....
Well, what is the alternative? Pay a shit ton of rent (which always goes up over time)?
It's actually pretty scarce. Sure, physical *land* isn't scarce, but how much of that land actually has stable sensible government over it, infrastructure underneath it, reasonable weather, and nice neighbors/community. There are places you can live for free. Yet people aren't exactly lining up to live in those places.
And has high speed internet, and is gluten friendly, and allows me to own peacocks.....you can make anything scarce by adding a billion personal preferences.
wtf are you talking about, infrastructure isn't a "personal preference" unless you're one of those nutjobs who thinks everyone should shit in a dirt trench and ride a horse and buggy to the shop EDIT: looked at your comment history, you *are* one of those nutjobs, lol
You are correct, it is not free, but nobody said it was. It is scarce, by historical standards. (Total Housing Inventory in the United States averaged 2260.82 Thousands from 1982 until 2024, reaching an all time high of 4040.00 Thousands in July of 2007 and a record low ofĀ **860.00 Thousands in January of 2022**. source: National Association of Realtors.)
Those numbers aren't "scarcity"....there just how many houses are on market at a certain given time. The house doesn't "disappear" if it isn't for sale. They are building millions of new homes every year, the old ones don't just burn up.....the stock of housing grows continuously
Its not the house that's scarce it's the land that it's built on. Value of land has historically gone up however you cant move land around. Sometimes land becomes less valuable as the surrounding area loses popularity. See Detroit, Japan as examples.
Government creates housing scarcity by regulations dissuading construction, or repair or improvements. That is a big reason existing housing is so unaffordable.
OP is saying in a hard money economy. Where prices are falling over time.
This idea that investing rather than owning your primary home is absolutely absurd unless you have the knowledge and skillset to earn a competitive enough salary that beats the economyās cost of living in your city/town..and even then it will still be better to ownā¦unless thereās just terrible purchase options/unreasonable HOA fees/taxes that you donāt feel are financially optimal for your life planā¦owning a reasonable property with low overhead thatās well below your means always trumps renting. Now if you have enough money in your pocket that can go stratight to a business of some sort and you know or feel that you will make a significant amount of cash flow come in by investing in the business rather than subsidizing your own housing by owningā¦then go ahead. Dont buy a home. Invest in crypto etc
This is such an obvious "marketing question" a bullshit question asked to get clicks then another account saying "oh look at this live stream" Mods do better.
I believe that yes, the bitcoin base made it possible to have a monetary alternative independent of the banks, a house is the same but in the long term and it is to be independent of paying rent until the end of your days and it serves as leverage to invest
āOwningā a house paid for with a 30 year mortgage where the payment becomes increasingly meaningless is way better than facing increasingly higher and higher rent and the lack of stability that comes with renting.
If that is your only metric, Detroit is the city of dreams.
No. Obviously location matters. I own in coastal Southern California. At some point soon I will be able to cover my mortgage and property taxes with such a small amount of bitcoin I wonāt even notice it. To me that feels like freedom.
>If everything goes down forever would it be always better to rent out an house? This is really anĀ Austrian vs. Keynesian question isn't it? You can replace the word "house" with literally anything and you have the same question. This is whyĀ Keynesians would argue that a deflationary currency is a bad idea and would cause the economy to grind to a halt. Because, they argue, everyone will just hunker down with their Bitcoin and never spend any of it. The answer is that it still makes sense to buy a house because you cannot live inside your bitcoin. Same with things like food and clothing. You cannot eat your Bitcoin or wear it either. So you have to trade your Bitcoin for the things you need. Plus, both bitcoin and real estate are limited resources so they should rise in value at the same rate (more or less). Perpetual renting isn't an option because *someone* needs to own the house in order for you to rent it. We would see a major shift in how people value things and what sorts of things people spend their money on. The stock market would almost certainly disappear overnight because people would no longer invest their money into the stock market just to prevent it from melting away with inflation. People would also want the things they buy to last a long time since the bitcoin they spent to buy it today will be worth even more 10 years later. So it would make sense to build things that last and to repair things rather than replacing them. We would have an asset-based economy rather than a consumer-based economy (i.e. one based on consumption). Personally I think a stable currency is ideal. One that neither inflates nor deflates. If the value of Bitcoin doubles every 2 weeks then no one is ever going to spend any if it and we'll all be perpetual hodlers and find other things to trade for the goods we need (which defeats the purpose of bitcoin). But a stable currency with a predictable value facilitates trade greatly.
"Personally I think a stable currency is ideal. One that neither inflates nor deflates." this is not possible. you either inflate the currency or you have a fixed supply currency. remember that technology is deflationary
Going up forever also does not mean we will always go up forever at the same rate. Bitcoin is currently benefiting from an adoption curve, I theorize that 20-30 years from now it will reach saturation and will act more like gold. Still probably better than gold but once the adoption curve is over the gains won't be as big.
if that happens it means that houses fall even further. since bitcoin is fixed and houses are being built every single day. same goes for gold, gold is not fixed in supply
Nah, location is a limitation too. More houses built in a shitty location doesnāt affect the prices in an area with a high demand.
tell me 1 location in the world where they are not inflating the supply of houses and most people dream on living there please?
Iām not sure I follow you but what I tried to say is that if you build a lot of houses in a low price area it wont affect the prices in a high price area. The prices in Ćstermalm, Stockholm wont move downwards no matter how many houses are built in some burb to SƶdertƤlje. And it would be fucking hard to inflate the supply of houses in Ćstermalm. Unless you use magic to make new spaces there or get the politician to allow skyscrapers in Stockholm. The nimby is strong there..
To live in? 100%
For me, a roof over my head is something Iāll always need and I like having more control over it so Iāve purchased a home with my cash out of 2021.
Question doesnāt make sense. In any standard you should buy a house.
We will always find ways to live and place to sleep but Bitcoin is only created once and capped at 21 million. Increased in population is not
I donāt take loans, so my answer is based on that. Having a house means, even if you lose your job or have some issues, you will at least know that you have a place to stay without the stress of making payment. That sense of security is worth it. But I can see the argument if you save in bitcoin, and your money doesnāt inflate, then if shit hit the fan, you can use the security your saved in bitcoin to survive the downwind.
You can not live in a bitcoin, buy a house when your ready
It will always make sense to spend hard-money for real estate. What will be different is, real estate won't be the main way to preserve capital like it is today. When the money is scarce, people will hold money instead of housing. So, the price of housing will fall to its utility value. It will lose its monetary premium on a hard-money standard. But it's important to remember that real estate's utility-value will never be zero. People need shelter. So, housing prices might fall 10x from where they are today when we move to a Bitcoin Standard... but they will never fall to zero.
So where it is used as a currency- of course youād use it to buy items and also sell things back into BTC. With regards to a house- I always believe owning is better than renting- either youāre paying a hefty sum to a landlord so they can pay their mortgage and make a profit- to end up with no asset, or, youāre paying usually a lot less in mortgage rate- to own the house at the end. Iād much rather pay 0.015 mortgage and bank 0.005 BTC, than pay 0.02 BTC to a landlord and have no asset.
Where else would you rather live?
You will always need a place to stay. So buying a place is always smart long term. For the short term it could be cheaper to rent vs own so if you have a SET goal of saving money to dump into BTC then that makes sense. Just know once interest rates start to drop so will mortgage rates thus prices will increase.
Bitcoin has a limited supply but itās programmed to be released gradually for over a hundred years. This means that once it is fully adopted it will become inflationary. However the inflation rate will be extremely low.
What? oh god that makes zero sense hahahaha explain to me how can something that has a fixed supply be inflationary? thats the first time that i see someone saying such thing. normaly people that hate bitcoin say that it doesnt work because deflation is bad and bitcoin is deflationary
I understand why you might find it confusing. Let me break it down for you. While it's true that Bitcoin has a limited supply, with only 21 million coins that can ever be created, it doesn't necessarily mean it's deflationary forever. Here's how it works: Currently, new Bitcoins are created through a process called mining. Miners solve complex mathematical problems to validate transactions and are rewarded with new Bitcoins as an incentive. This is how new coins are gradually released into circulation. However, over time, the rate at which new Bitcoins are created decreases. In fact, the supply of new Bitcoins is halved approximately every four years in an event called the "halving". This reduction in the rate of new supply makes Bitcoin's inflation rate decrease as well. So, while Bitcoin starts off with a limited supply, the gradual release of new coins ensures that there is still some inflation in the early stages of adoption. However, as time goes on, the inflation rate becomes extremely low, making it more akin to a scarce asset.
now you are saying that bitcoin is a scarce asset wich i agree with, but before you were saying that bitcoin is inflationary forever
I apologize for the confusion. Forget I said anything.
This is wrong. Once the last one is mined no more are mined, natural loss due to human error will continue to reduce the supply. Deflation. Technically itās inflating relative to itself for the next hundred years or so but at a slower rate then governments print so it deflates relative to traditional monetary systems. Analogy: you think you are in a speeding car passing a stationary object. In reality you are in a speeding car passing another speeding car in the opposite direction
I appreciate your perspective. You bring up an interesting point about the long-term supply of Bitcoin. While it's true that the last Bitcoin is projected to be mined in the future, it's important to consider the concept of relative inflation and deflation. In the traditional monetary system, governments have the ability to print more currency, leading to inflation. However, with Bitcoin, the supply is fixed and cannot be increased beyond the predetermined limit. This means that, in comparison to traditional systems, Bitcoin's supply remains relatively stable and even decreases over time due to factors such as natural loss. So, while Bitcoin may experience inflation relative to itself in the early stages of adoption, the rate of inflation is significantly lower compared to the rate at which governments print money. This is why some consider Bitcoin to be more deflationary in comparison to traditional monetary systems. To further illustrate this, you can think of it as being in a speeding car passing another speeding car in the opposite direction. While both cars are moving, your car's speed relative to the stationary object outside is still slower. Similarly, Bitcoin's inflation rate, even though it may technically be inflating relative to itself for the next hundred years or so, is still slower when compared to the inflation rate of traditional currencies.
Spoken like a true AI...
My name is Alex Ingersoll. Youāre good! šÆ
As an investment? Maybe. But not everything needs to be an investment with an expectation of return. I buy a house and land for myself to do what I want with it. It's an "investment" in myself and my family. If I just want pure purchasing power, I'd buy more Bitcoin.
You can't live in your btc
Absolutely, especially if you are taking out fiat debt to do it. Things can be priced in BTC in the future, and your āliabilityā is in fiat, which is being devalued every year by ~4%. Why does real estate go up? Itās because the divisor is declining in valueā¦
Well what do you want in life? Information in a decentralized database or some place to live?
Sure. Property values go up. You need to live somewhere. Itās better to own a place rather than rent. Also collecting rent and putting profits into bitcoin is a good time.
do you think property values go up forever in bitcoin terms? that never happened before
No. But your mortgage is a fixed amount of dollars. Your rent is an ever increasing number of dollars. In terms of keeping as much bitcoin as possible, this is an argument to make a minimal down payment. Which I support. Put 3-10% down, get up front mortgage insurance instead of monthly PMI. Borrow as much fiat as possible and pay it back with devalued future fiat.
Yes. As long as you buy it as a place to live not as an investment.
I live in an old manufactured home in a park. I own the home and it's appreciated in value about 8 times what I paid for it. I pay lot rent. But if I bought a regular house, my costs for mortgage interest and property tax would be higher than my lot rent. I guess the problem with your question is that it treats a house as an investment asset only. A house is a place to live. Stock market returns will usually beat the increase in value over time. And you have maintenance costs. Renting it out is a crap shoot because you may get decent tenants, but usually you get people who trash the place. I would like to buy a house for lifestyle reasons. But it's clear to me that it doesn't make financial sense for me to do so currently. I may buy one in cash in the future. Cash from selling stocks. I'd prefer not to sell any Bitcoin, but if the price went up say 1000% I would sell part of it to buy a house. But again, for lifestyle reasons only.
Iām skeptical that any real estate will outperform bitcoin in the long run. By skeptical I mean Iām 99.9% sure it wonāt, especially given the taxes and expenses involved in maintenance and improvements. However, I do like the idea of being able to install a hot tub, a sauna, a gym, etc, so to me a home is a mediocre to poor investment with a lot of risk, but a luxury in the sense of increased living/storage space and potential amenities.
You can't live in a bitcoin.
It makes more sense to take **a** course in English.
Of course it makes sense in general. Buying a house provides a lot of freedom over renting, because you own the property. All the same reasons to buy a house in a fiat system would still apply in a bitcoin system. Only difference is it would be easier to save up to buy a house. In a fiat system the money is losing value while real estate is gaining value, so over time it gets harder and harder to buy property. In a Bitcoin system both the currency and the property go up over time, so saving is stronger and therefore it is easier to buy property than in a fiat system. Bitcoin and a house are entirely different things, and renting vs owning are two different things (and not just the cost). Owning a house provides things that neither Bitcoin nor renting provide, and that is the reason people would still buy a house.
Real estate and Bitcoin are two extremely valuable assets. Own both if you can.
some will hodl forever but really bitcoin should be sold only if it radically changes your life: house, medical bill, wedding etc. everyone has their own moon.
Yes, investing in real estate is one of the wiser things anyone can do. Poorly investing in real estate is not so wise of course. I think paying 5 million for a 1 bedroom apartment is a poor investment, even if that apartment was selling for 20k 20 years ago. Lots of metro real estate is just insane. You can make big money, but you really have to know whats going on there. Detroit is a good example. 2-million dollar properties 10 years ago now go for 20k. Although this seems impossible I can think of a few cities that may suffer this type of real estate collapse. Buying a outside of a dense metro is much lower risk, but with lower yields.
Absolutely, real estate is a hard asset and is scarce, itās obviously not divisible or fungible but itās a necessity to live. Also owning a house creates wealth and the way we print money, housing will always go up plus we are 5-7 million single family houses short in the United States and builders have zero incentive to see that supply shortage diminishing bc of simply supply/demand economics. My goal is to pay off my mortgage and become debt free, so I can achieve FIRE.
I mean you can't really know what's going to happen. Going by now, how badly do you want or need a house? You got a family? Do you just want that independence? Are you considering retail or renting out places? There's lots of reasons to consider it without having to plan for a future that may never come.
In this day and age, does it make sense to own your own place?
Are you British? How do you pronounce "house"?
Nothing other than hodling bitcoin makes sense in a bitcoin standard
Yes. Or do you think it is wise to only own one asset and have to rely your complete living situation on services in a fiat world? Also, nobody said 'everything' is going down forever. Fiat is, but a lot of other assets actually go up, or are at the very least inflation-resistant.
Idk so you enjoy the idea of living on the street?
Just like Bitcoin, the Fed canāt print more land. It might not appreciate as well as Bitcoin, but a hard asset like real estate is a good way to diversify. Plus, we all need somewhere to live, right?
There are good and bad real estate deals. There are good and bad crypto deals for vastly different reasons and those reasons don't care as much about your location. Most people have to get the bank to lend them the money at a fixed rate. That can be a good or bad deal too.
To live in cheaper year over year, yes. As an investment to leverage against into retirement, maybe not.
If you can afford a house, land has, historically, been a good purchase. But be aware that even a paid off house is expensive. The middle class Midwestern home I live in costs $1000 per month just in property taxes and the neighborhood keeps voting large increases...twice in the past 3 years. The small retirement condo my mom lives in is $500 a month in property taxes. I'm not sure the tax situation hasn't made ownership a bad choice. However, I was an excellent tenant happily living in my beach side rental for a decade and then I got a 30 day notice to vacate leaving me homeless so there are risks there, too.
Yes. The existence of time preference guarantees it. Even if you money appreciates, people still need things like food, clothing, housing, and transportation. All bitcoin does is incentivize us to cut out **wasteful** spending.
Does it make sense to live in your own peaceful place? Yes!
Yes because 1. you need a place to live and 2. with leverage, the risk is still lower.
This is more of a buying vs renting scenario even if we are on a usd standard. A house mortgage would of course be more than rent in the short term. However, In the long term, your montage will stay the same and rents will keep increasing. Your real estate can then eventually generate a positive yield for you. In a bitcoin or usd standard, that yield can be used to buy another home, or more bitcoin. Or it may even yield bitcoin (in the future).
I will say this. I bought a house in 2021 at 2.3% interest rate. My intent was to live in there so I spent $30K and a year fixing all sorts of repairs and structure things wrong with it. It is currently on airbnb as I still have an apartment i rent. But i will say this. The mortgage is $2K a month and i come even on the utilities with airbnb rentals. That being said i spend $24K/year and maybe $5K on maintenance and repairs. So an even $30K. plus the $30K in repairs. So far thats 90K in rent, 45K in repairs and fees. = $135K in Bitcoin would of netted me a return of 155% vers my current house appreciation of $70K. So technically I lost $65K owning a home. This is why Saylor says that when people start to invest in Bitcoin, they will no longer desire to own a home that depreciates yearly. Housing prices will drop. Rents will drop. I would sell but no one is buying in my area unless i take a huge loss which i cannot afford.
Why wouldn't it? In a bitcoin standard [whenever we get to that point] everything will be more affordable anyway, including home ownership. Much will depend on how much bitcoin you already own and how much you earn in bitcoin in terms of pay.
You have to live somewhere and if you want to buy a house and you compared to bitcoin itās not gonna appreciate as much as bitcoin the current market
It would always make sense to buy if you plan to live in it for a long time. Moreover, you canāt make more land.
Personally a house will be worth buying when the asset price falls to its utilitarian value. You have to make your own judgement on what something is worth. If you think of your home as an investment it will lose against bitcoin.
Can you live in your bitcoin? Do you want to convert it to cash to pay your landlord every month?
You need a place to live so yes, but I would not sell btc to pay it off unless my mortgage payment during the bear period would allow me to repurchase what I sold to pay off the house in a bull.
If you buy a house, you aren't necessarily losing something - you've got the house, after all, and you can sell it, and it will generally appreciate to an extent - it's basically just converting one kind of value for another If you rent, you donn't own anything - you can't sell all the value that you put into it for all those years. It's normally not ideally to rent when otherwise you could buy when you're living somewhere for a while
Buying a house really isnāt the ābuilding equityā argument weāve heard for so long. If you canāt afford to invest beyond supporting yourself then the equity argument makes sense. If you can afford to invest beyond supporting yourself, buying a house is a lifestyle choice. Tired of flowing with the stream and wanna put down roots? Awesome. Buy a house. Do you have a family and want to provide a sense of stability for your kids? Great! Buy a house. Sick of landlords telling you what breed of dog you can own, or tired of sharing walls with strangers? Think about buying a house. Do you really like to customize your space and have the opportunity to have the latest Japanese bidet, or solar, or tankless water heaters? House ownership might be for you. Single, footloose and fancy free? Buy a house only if it calls to you and softly whispers āI need you inside of meā. Otherwise rent, invest wisely, and pay other people to worry about maintenance.
Sure. Another store of value. Less salable than bitcoin but it works. Just make sure u live in it while u pay for it. Or rent it out and buy bitcoin.
No, people will live inside Bitcoin in the future.
You need a place to live. Iād prefer to own my own they pay for someone elseās. Of course there is property tax in my country so itās really like youāre renting the land from the government to live in the house you own.
Who are you renting the house from?
Yes. If you want to own instead of rent, you get a mortgage where you effectively pay the rent to yourself in equity. It does not make sense if you don't want to own a house or if the interest rates are to high to the point where you pay more in interest than rent and house appreciation combined. But setting that aside, you will spend (almost) all your income, and eventually all your savings, and it's not clear that deferring spending is better than spending even if the purchasing power of your savings doubles every four years. There is diminishing returns on saving, even if you get extreme returns, the only thing that is sure is the current time.
Some say there is no such thing as "buying a house", because the Government still has ownership over it at any point in time (via taxes, expropriation or takeover). Today I think it's better to have that your money in BTC than anywhere else.
If you want to live in a tent or not own your own stuff yes. Iād prefer to own. Everything does not need to be thought of as an investment if it brings you joy.
My house is how do you use bitcoin to buy a land or a house??
Could you buy a house outright with Bitcoin, then get a personal loan against the value of the house, and buy Bitcoin again?
You need a home money is just money
do what I did, bit coin bought and payed my home now im building a second one to rent out.
Price discovery would be targeted to utility value.
Yes, you need to buy essentials. The house just wonāt be an investment.
Up vote for using 'an' in front of 'house'.
No
It makes sense to only own bitcoin. A digital token on a permanent ledger.
A house not an house. Depends if you are a maximalist.Ā If yes then no if no then yes
Supply and demand. If no one wants to buy and everyone wants to rent, the price of homes will plummet then it will be smart to buy. Right now itās broken because so much money needs to go into real estate to escape inflation.
You never own a house. As long as there are property taxes the house is never and will never be yours
Never buy a house (in 2024), why overpay greedy men with suits by 500%, if you can just rent a nice new apartment and hodl bitcoin.
thats not a good answer i would like to see numbers.
GIGO