Bitcoin, Blockchain, the stock market, and real estate: Are We In the Twilight Zone?
Over the past twelve months or so, almost everyone has heard about Bitcoin, cryptocurrencies in general, and the blockchain. Simply stated, cryptocurrencies, such as Bitcoin, are an alternative form of payment different from paper currency. The Blockchain is a decentralized open ledger that publicly records transactions between two parties, eliminating the need for an intermediary, such as banks, and allows for end users and servicers to connect directly. What does this all mean? More and more products and services will be conducted through technology with less human interaction. And, the “currency” to transact business will be through the use of cryptocurrencies, the most known as Bitcoin.
Why less human interaction and more technology? Blockchain is premised on users’ mutual distrust of third party institutions, such as banks and government. Through the use of technology arguably there would be more of a seamless transaction and less risk of fraud since third parties are eliminated.
Many naysayers have not embraced this “new” technology, and believe that it will not change fundamentally how we all interact and do business. Yet, we are starting to see numerous indications to the contrary. The laws regulating cryptocurrency are still evolving.
The Times They are a Changin’
The times are definitely changing. Goldman Sachs has said that it is going to begin a trading desk for Bitcoin and probably other cryptocurrencies, and The Wall Street Journal has reported that the New York Stock Exchange is going to do something very similar. If the NYSE and Goldman Sachs are going to start trading in these currencies, it would suggest that it is becoming a commodity no different from gold or silver.
Several states, including Georgia, Illinois, and Arizona have proposed legislation aimed at allowing payment of state taxes using cryptocurrencies. That’s right, paying taxes with Bitcoin might very well be possible as soon as the 2019 tax season. Most recently, Florida’s Seminole County has announced that it will be the first United States government agency (and the first Florida county) to accept Bitcoin and Bitcoin Cash, and presumably other cryptocurrencies in the future, as a way to pay for real property taxes. Paying taxes with cryptocurrency may seem alien to us now, but may well become the new normal in just a few short years. Seminole County will use the payment processor BitPay to process cryptocurrency payments. The project goes into effect in June, and it applies not only to property taxes but also to fees relating to tags, driver’s licenses, titles, and Identification Cards.
The shift towards Bitcoin in Seminole County is a huge game changer because it signifies that a governmental municipality has actually validated that form of currency. The federal government’s shift towards acceptance of Bitcoin and cryptocurrency is also evident in the tax reporting requirements that it has instituted.
Thus, the crypto-world is converging on how we do business and how business will continue to evolve over time. Our law firm announced last fall that we accept cryptocurrencies as payment for legal services. Was this bold? We just accept that our world keeps on changing, and we all must adapt to technology or fall behind.
From the trenches.