Bitcoin and crypocurrencies may not interest you, but the underlying blockchain technology should.

Imagine that, early this year, you sold a property for $10m and opted to take payment in Bitcoin.

Perhaps your $10m of Bitcoin was transferred to you on January 6, when a Bitcoin was worth $17,135.84. If you didn’t use those funds by, say, the next Tuesday, your store of Bitcoin would have fallen in value by 16%. If you waited another week to spend those coins, you would find they’d plummeted 55% in value. Of course, had the sale taken place exactly a year earlier, you could have watched your $10m of Bitcoin turn into more than $200m by the end of 2017.

With this level of currency fluctuation, whether the real estate deal was a good one scarcely matters. At present, crypto-currencies are too unstable to act as a viable store of value for investors.

In June, the Bank of International Settlements (BIS) said crypto-currencies would never be a practical alternative to mainstream currencies because they were too unstable, subject to too much manipulation and fraud and also that they are killing the planet – Bitcoin mining currently uses as much electricity as Switzerland.

However, the travails of Bitcoin and other crypto-currencies do not mean that the underlying blockchain technology has no practical application. There are a number of potential uses for real estate for example.

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Matthew Powell, Director, Savills Hanoi

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