A $134 Million real estate has sold on ethereum blockchain

Remember when everybody was convinced that blockchain was the future? In those halcyon days, nearly everyone with a modicum of technology-savvy was convinced that investing in Bitcoin or Ethereum was the key to striking it rich…until the bubble burst.

However, if the conditions of a splashy nine-figure business real estate deal are any sign, the inherent blockchain technology powering cryptocurrencies can become a substantial force in the world of property. To complete the deal with real estate investment group RFR Holding, known for purchasing the Chrysler Building in 2019, BrickMark partially finished the sale by creating and issuing proprietary BrickMark tokens depending on the Ethereum, a kind of cryptocurrency blockchain protocol.

With all these tokens representing a reported 20 percent of the approximately $134 million trade, BrickMark’s acquisition of the property currently registers as the largest blockchain token–established real estate transaction in history.

We are breaking new ground for the real estate industry,” BrickMark CEO Stephan Rind said in a release. “There has never been a token-based real estate transaction of this magnitude.”

The use of a blockchain-backed token is just a gimmick–it is a dynamic method for securely funding a property transaction that woos investors with the prospect of both immediate and more sustainable value. As opposed to a pure cash deal, BrickMark token holders have the opportunity to collect recurring payments of rental income from the 1,600-square-meter property, and also the BrickMark tokens potentially become another salable portfolio asset for RFR. Though using digital money may seem baffling, RFR’s willingness to accept thousands of dollars worth of payment in BrickMark tokens suggests there’s serious virtue to these sorts of deals moving forward.

“We gladly accepted the Brickmark tokens as part of the purchase price,” RFR managing director Alexander Koblischek said in conjunction with BrickMark’s announcement. “We assume that digital financial instruments will also significantly gain in importance in the real estate sector in the future. The current transaction may have an icebreaker function for the sector in terms of its volume and institutional character.”

As soon as it’s the biggest deal of its kind, this is far from the first time real estate has changed hands this way. An early Chinese Bitcoin adopter offered 500 units of this pricey digital currency to buy a San Francisco mansion in 2018. At the peak of this 2017 bubble, The Bloody Bay Company would allow you to only purchase 13 acres of land in St. Vincent and the Grenadines using Bitcoin, even though it’s unclear if there weren’t any takers before its value tanked.

Some in the real estate business will certainly remain doubtful of prices tied to blockchain tech. But when the person who owns the Chrysler Building sees the merits of dealing in digital tokens, then you can bet that some of the big shots in charge of property portfolios have put in a call for their IT team.