FAQs

FAQs

Can You Reach €1 Million with a ‘Bitcoin Retirement Plan’ in Just 5.5 Years? Find Out Here!

For the past 5.5 years, I’ve been buying Bitcoin every month as part of my ‘bitcoin retirement plan’, with the goal of reaching 1 million euro. I document my journey and progress on this blog. Although I’m only about 10% to my target, I’m confident I won’t need another 45 years to get there!

My journey so far has been nothing short of incredible. I’ve managed to accumulate over 4 Bitcoin for around 40k, which is something that’s truly amazing. I’m also glad to share posts like these with newcomers to Bitcoin.

I believe that the best way for newbies to get into Bitcoin is to DCA slowly over time. This way, they can learn what Bitcoin is while also stacking every paycheck they make. Even if they FOMO in with all their fiat and the price drops 10%, they’ll be less uncomfortable than if they had bought in at once.

The next Bitcoin bullrun is expected in 2025, so I’m looking forward to that. In the meantime, I’m sharing a link to the template I used to create my own charts with my data.

For the past 5.5 years, I’ve been investing in Bitcoin as part of my ‘Bitcoin retirement plan’, with the goal of reaching 1 million euros. What started as a dream has become a reality, and I’m now only about 10% away from my target. I’ve documented my journey and progress on this blog, so if you’re interested, do take a look.

I’ve also shared a template so you can create your own charts with your data. With over 4 BTC for around 40k spent, I’m incredibly proud of what I’ve achieved. I’m also glad to share posts like these with newcomers to Bitcoin.

I believe that the best way for newbies to get into Bitcoin is to DCA slowly over time. This way, they can learn what Bitcoin is while also stacking every paycheck they make. This way, even if the price drops 10%, they won’t be as uncomfortable as they would be if they’d FOMOed in with all their fiat.

The next Bitcoin bullrun is expected in 2025, so I’m looking forward to that. In the meantime, I’m continuing with my Bitcoin retirement plan and I’m confident that I won’t need another 45 years to reach my target.

My journey with Bitcoin has been an incredible one, and I’m sure it will continue to be so! To anyone interested in getting into Bitcoin, I recommend taking it slow and DCAing, while also learning what it is all about. I’m sure you’ll make it to your target in no time.

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FAQs

Could Steve Jobs Have Been Satoshi Nakamoto – Will We Ever Know?

It seems like the mystery of who Satoshi Nakamoto is will never be solved. There have been quite a few speculations over the years from Steve Jobs to Kim Jong Un, but the truth is no one will ever really know. Steve Jobs was known for his love of neat tech, but his focus on usability, simplicity and user experience didn’t really match with the creation of Bitcoin. Even though the idea that Steve Jobs invented Bitcoin is cute, it’s not true.

Craig Wright has recently been brought up as a potential Satoshi Nakamoto, but that doesn’t make much sense either. Hunter Biden has been suggested as well, since he is tech savvy and connected, but again, it’s unlikely that he is Satoshi.

Steve Wozniak is another name that has been thrown around, and at least he makes more sense than Craig Wright. It’s possible that Wozniak is the one who put the Bitcoin whitepaper in the Mac OS. Hal Finney makes the most sense to me, but there are still plenty of other people who could be Satoshi.

The truth is, it’s impossible to know who Satoshi Nakamoto is, and it seems like they never wanted to be found. This whole mystery has made many people from the outside think that this space is full of “fucking morons.” In the end, we are all Satoshi in one way or another.

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FAQs

Can Bitcoin Lead to True Financial Freedom?

Being a bitcoin enthusiast, I’m always considering the possibilities of what I can buy with my bitcoin and when. When I managed to accumulate enough bitcoin, I was presented with a variety of options I could choose from; I could use it to pay off a house, start a business, or just maintain enough to enjoy financial freedom.

When it comes to financial freedom, I understand the risks of fiat currencies losing their value over time. But that’s not enough to deter me from wanting to make more bitcoin. I’m content with outcomes 1 and 2, where bitcoin becomes widely accepted and increases in value, or even just increases in value without becoming a mainstream currency. Outcome 3, where bitcoin decreases in value over time, is not something I’m willing to accept.

I’m continuing to trade and buy little bits here and there in order to build my bitcoin funds, and I’m also happy to take advantage of new opportunities like stablecoin. I’m aware that I’ll still have to pay property taxes on the house even if I manage to pay it off with bitcoin, but it’s a risk I’m willing to take. Ultimately, I’m looking to become financially free and make the most out of my bitcoin.

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FAQs

Do Government and Politicians Really Care About Us, or Are We Just Being Taken Advantage Of?

Politicians are only focused on keeping themselves in power and enriching themselves at the expense of the people they are supposed to serve. This is done in a variety of ways, such as excessive taxation, inflation, and other forms of theft. All of these actions are designed to keep the people distracted from their own oppression and powerless to do anything about it.

It’s time for us to take back our power and fight the system. Bitcoin is the perfect weapon for this fight. Bitcoin is the only form of protest that can actually make a difference. By voting with our wallets and starving the system of its resources, we can make a real change. We can fix the money and fix the world.

We owe a tremendous debt of gratitude to Satoshi Nakamoto and all those involved in the creation of Bitcoin. Bitcoin has given us a way to fight back against the system, and it is our only hope of reclaiming our freedom.

It’s time to stand up and fight back. Bitcoin is the only way to do this. We have the power to make a real change in the world, and Bitcoin is our best chance of doing so. Let’s use it to its fullest potential and fight for a better world.

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Cryptocurrency, FAQs, News

Ethereum 2.0 is cancelled!?!

What you need to know?

The Ethereum network has for many years been the cradle of thriving innovation. We have thus seen the emergence of various phenomena such as ICOs , DeFi , NFTs and more recently the Metaverse .

However, the performance of the network cannot keep up with the growing demand. Thus, for several months Ethereum has been the victim of significant congestion . One of the main consequences of this congestion has been the drastic increase in charges on the network.

Fortunately, the developers have imagined several developments aimed at improving the performance of the network and allowing it to process a larger volume of transactions, without negatively impacting the user experience.

These evolutions have long been grouped under the name of Ethereum 2.0 . Thus, Ethereum 2.0 designates various updates:

  • The change in consensus , with the passage from proof of work to proof of stake;
  • The deployment of sharding , a solution to split the network into multiple subnets, in order to increase throughput.

“Ethereum 2.0”… it’s over

In a post published on January 24 on the official blog of the Ethereum Foundation , it announces the end of Ethereum 2.0 . Don’t worry, we’re only talking about the terminology and not the various changes included in this update.

Indeed, in the old versions of the roadmap, Ethereum as we know it had to give way to a new version of the network, hence the name Ethereum 2.0.

“As part of this roadmap, the existing proof of work chain (Eth1) would eventually be deprecated via the difficulty bomb. Users and applications would migrate to a new proof-of-stake Ethereum chain, known as Eth2.”

However, changes to the roadmap have disrupted the course of this transition.

Thus, with the appearance of The Merge , which aims to connect a part of each of these two versions of Ethereum, it no longer makes sense to differentiate them.

Indeed, The Merge aims to connect the “application” part of Ethereum as we know it, namely the entire application ecosystem, to the consensus part of Ethereum 2.0 in proof of stake. As a reminder, this consensus layer was deployed in December 2020, via the launch of the beacon chain.

Execution and consensus layer

This is why the developers decided to drop the name of Ethereum 2.0. Instead, they offer the following designations:

  • Ethereum 1.0 becomes: execution layer ;
  • Ethereum 2.0 becomes: consensus layer ;

Therefore, Ethereum will now be the addition of these two entities.

Execution layer + consensus layer = Ethereum.

In practice, this does not change much. However, this helps to bring more clarity and not to lose newcomers, who are new to Ethereum, Ethereum 2.0 and may find it difficult to understand the link between the two.

“A major problem with the Eth2 appellation is that it creates the wrong thinking pattern for new Ethereum users. They intuitively think that Eth1 comes first and Eth2 comes after. Or that Eth1 ceases to exist once Eth2 exists. Neither is true. By removing the Eth2 terminology, we save all future users from navigating this confusing mental model.”

This decision was made due to the imminent arrival of the said fusion of the execution layer and the consensus layer via The Merge. Thus, the connection of the two entities has been announced for around June 22, 2022.

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FAQs, Cryptocurrency

Will Bitcoin become the World Reserve Currency?

Key facts:
  • The petrodollar standard is running out of steam with China’s negotiations with Saudi Arabia.
  • There is a crisis of confidence in the dollar as a result of US sanctions on Russia.

An event of great importance is taking place on a world level: the dollar has weakened as an exchange currency in the commodity market, which opens the possibility that a new world monetary reserve will be decided. While this is happening, China’s renminbi (better known as the yuan) and bitcoin are on the table as two options to become the next world currency.

To understand why and how all this is happening, we must first do a brief historical review and go back to the last century. By the early 1900s, the monetary system that governed the world was very different, since it was based on gold reserves. Each country undertook to guarantee that its currencies were worth a certain amount of gold that was under its protection. However, with the outbreak of two world wars, the international economy underwent a violent transformation and the gold standard saw its end.

By 1944 an agreement of great importance for the financial memory of the world would be signed, the Bretton Woods. This event gave birth to the World Bank, the International Monetary Fund (IMF) and established the use of the dollar as the world currency. The idea was that the United States would become an issuer of currencies backed by its important gold reserves, and that this money could be used by other countries to market goods and services.

However, the idyllic system proposed by Bretton Woods did not last long, because in the 1970s we would see the beginning of the financial chaos that we still carry today. The US president at the time, Richard Nixon, delinked the dollar from the gold standard during a period of inflation caused by the US war in Vietnam. This produced an international financial collapse, as well as many tensions in foreign countries, where some decided to float their currencies on the open market to support the value of their economies.

This measure determined the beginning of the depreciation of the US dollar, although it continued to be the currency with the greatest dominance in the international market. Currently, 90% of currency trading is done with the dollar, and it remains the most common reserve currency, accounting for 60% of world reserves. A much higher percentage than that of other highly relevant currencies, such as the euro, the yen, the renminbi and the Canadian dollar.

But… what is the reason for the continued success of the dollar as a currency of exchange if the economic decisions of the United States in recent years have not been the most successful? Well, in general terms, this has been determined by the political power of the American power and its international relations, with oil being a very important piece in its use as a world currency. In addition to all of the above, to understand the current situation it is important to know a concept: the petrodollar.

Oil, the cornerstone of market dominance

Also in the Nixon government and with the intention of financing the war without depending on gold reserves, the United States reached an agreement with Saudi Arabia so that the oil of this country would be sold in exchange for dollars. Alex Gladstein, director of the Human Rights Foundation, explains that through these negotiations the American country was able to accumulate oil and that the oil-producing nations invested their profits in the US debt .

To make a long story short: the United States achieved what it was looking for, since shortly after the agreement with Saudi Arabia, OPEC – which is one of the most important organizations of oil countries in the world – also agreed to sell its products only in exchange for dollars. In this way, almost 80% of crude oil production worldwide is still traded under the petrodollar system. Nations of the European Union, China and even Russia have been forced to have the dollar to buy or sell oil. Yes, in a nutshell, they have to use a foreign currency to price their own raw materials or buy from other states.

And although on several occasions there have been attempts to overthrow the petrodollar pattern, the reality is that the United States has jealously protected its dominance in this market. Let’s take an example, in the 2000s one of the bloodiest wars described as “oil wars” broke out, after Saddam Hussein, president of Iraq, tried to sell his crude oil to Europe in exchange for euros. Although the US government argues that the war started because of Iraq’s terrorist connections and its development of weapons of mass destruction (atomic bombs). However, with the end of the war for some it became clear that the hegemony of petrodollars was protected.

Venezuela has been another country that recently tried to market its oil with a currency other than the dollar, in this case the Chinese yuan. Crude oil was quoted in different international currencies, trying to disassociate itself from the US government that had recently imposed sanctions on the country, but at present this had no major repercussions. And even today the Caribbean country is once again in talks with the United States to market its crude oil.

But today, the dominance of the petrodollar (and the dollar as a world currency) is facing one of its greatest threats since the moment of its creation. China, which is the buyer of 25% of the oil generated in Saudi Arabia, is in talks with the country to close the trade in crude oil in yuan. This is a discussion that has been going on for years without a resounding answer, but today China’s political relations with this kingdom in the Middle East are stronger than ever, while US relations with the Arab country have weakened. .

With this move between China and Saudi Arabia, it is clear that the Asian giant wants to take away ground from the dollar as the world currency and who will also impose a petroyuan standard. It is not the first time that China has tried to introduce oil contracts quoted with the yuan to the market, just as the government has promoted a fierce campaign for the adoption of its cryptocurrency (the digital yuan) as the new currency of commerce.

If we take into account the power that China has in world trade, it is obvious that this movement endangers the hegemony of the dollar. Additionally, the war that is taking place in Ukraine as a result of the Russian invasion can also change the rules of the game and worsen the already precarious situation that the US dollar is experiencing.

Collapse of confidence and change to a new monetary order

If the floor of the petrodollars is collapsing, the confidence generated by the traditional financial system and the dollar as a world reserve is also cracking after years of erosion. With the constant sanctions that the United States has imposed on countries such as China, Venezuela, North Korea, Iran and Russia, the message has been clear and forceful for the citizens and leaders of the world. The money does not belong to everyone, but to the one who issues it, protects it and distributes it. Ergo, the United States .

This represents, statistically, that a country of just over 300 million inhabitants can control the lives of the more than 7 billion that are on earth and that (possibly) do not share the same culture, the same geographical reality, or much less the same economic benefits. This, for obvious reasons, generates an imbalance in world finances that different powers want to correct by promoting the use of their own currencies (as is the case with China).

As if that were not enough, the war has also generated a new economic climate (due to sanctions) that brings new elements to the table, such as the blockade of Russian oil. Russia is another of the countries that leads the export of crude oil worldwide, along with the production of gas and other raw materials. However, because the entire country was blocked from accessing dollars through the SWIFT system, the Eastern European nation has been unable to benefit from the current rise in oil prices, the price of which has plummeted, according to data. of Ecoanalytics.

For financial experts like Zoltan Pozsar, from Creddit Suisse, this is the beginning of an economic crisis that will generate a new monetary order , baptizing it as «Bretton Woods III». Poszar predicts that, due to the current weakness of the dollar and the euro —as well as the lack of confidence they are going through— it could generate a debacle in the world commodity market. Due to this, interest in foreign money grows over the internal money that each country has, with products such as flour, oil, gold and gas rising more and more in price.

The analyst points out that, because the raw material from Russia was left out of the game, the value of all the raw material from the other countries has grown. Those who are allied with Europe and the United States will stop doing business with the sanctioned country. However, powers like China, which are decoupled from Western interests and do not want to depend on the dollar, could see Russia’s raw material as an opportunity to continue carrying out their petroyuan contracts and support their currencies such as oil. (and gas) from Russia.

For Poszar, everything that is happening today is the prelude to a new era of money, in which the renminbi will emerge stronger and the dollars will be seriously affected. Even so, he does not believe that China is the only strong piece in this chess game, but instead proposes that if Bitcoin manages to survive this situation, it could also benefit greatly.

Does Bitcoin have life in that scenario and who will stay with the reign?

It is not yet known who will get the title of “the world currency” in case the dollar finally loses its power, the answer is probably not as simple as simply saying the yuan, the yen, the euro or bitcoin. However, if we must take into account that in a globalized world like the one we live in today, going through a huge institutional and confidence crisis, it is difficult for a single currency to prevail as the dollar did in the past.

China also has many “buts” in its financial system because, although it knows how to take advantage of the situation, there is great resistance in the West to accept the way in which the government of the Asian giant works. With the possibility of losing privacy over your finances and freedom of decision, there are not a few people who reject the use of the digital yuan and any form of adoption of the Chinese monetary system. In the case of the yen or the euro, they do not turn out to be the favorite options nor are they powerful enough to generate the expectation that they will be the substitutes for the dollar.

Likewise, it must be taken into account that, although the dollar is weakened, the United States continues to be a country of great political and economic influence, so it will not be so easy for an abrupt change to occur in the world economy without the American power of the battle to stay.

In the midst of all this context, it is curious that a new name has crept into the table of candidates to become a reserve currency. With the adoption of bitcoin (BTC) as legal tender in El Salvador, Satoshi Nakamoto’s cryptocurrency has reached the governmental leadership and is shown as an option to store value that is supported by those who seek greater freedom, privacy and decentralization in world finance.

Alex Gladstein, in the aforementioned article, points out that “bitcoin is an asset that is competing to become the new world reserve” in a context where money is centralized in the hands of a dome. With people thinking that this way of using money is unreliable and fair, Bitcoin is presented as an option that cannot be controlled by a few for manipulation or censorship, just as it is impossible to change its monetary policies to benefit one. group of people above others.

In an ideal world, where all humans have the right to choose what money to use and enjoy the same benefits of the financial system, it is likely that Bitcoin will be the currency that governs the world and not a currency issued by a Central Bank with its own agenda. However, we must also be realistic that cryptocurrency has not even reached 20 years of its creation and is still a very niche form of money, which may not yet be ready for the level of demand that it has. it would generate him to become the new world reserve .

In conclusion: we will have to wait and see what the current power struggles decide, but it is obvious that money as we know it will never be the same again and that it will be difficult for the dollar to emerge victorious from the current crisis in which it finds itself submerged.

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Tutorials, Cryptocurrency, FAQs

How To Get Passive Income With Cryptocurrencies

It is better to invest in Bitcoin and cryptocurrencies at the beginning of the market cycle , because you can accumulate and wait quietly for the price to rise without worrying. If, in addition, the amount of cryptocurrencies increases as they appreciate in value, it is almost a gift.

Nothing has a risk 0 and less in cryptocurrencies, so first of all, you have to remember the number 1 rule of cryptocurrencies.

If they are not your keys, they are not your coins.

Andreas Antonopoulos

Cryptocurrencies are easy to use with basic knowledge. They are yours if you have the public key (it is shown to everyone, as a user) and the corresponding private key (it is not shown to anyone, like a password). If you have both, you can do whatever you want with them, it’s that simple.

Therefore, all the services in which you trust your keys and, therefore, your coins, are susceptible to being stolen or lost due to mismanagement. It is important that you analyze the security measures of the service where you have them stored, if you do not have the keys yourself.

The ways to get passive income are:

  1. Staking
  2. Exchange cryptocurrencies that pay out dividends
  3. Lend your cryptocurrencies with interest

1. Staking

All cryptocurrencies have a mechanism that secures the network so that repeated expenses of the same currencies do not occur and infinite inflation is created. The best known mechanisms are proof of work (Proof-of-Work) and proof of possession (Proof-of-Stake) .

Proof-of-work coins require expensive equipment to be assembled, make noise, use a lot of electricity, and require technical knowledge.

In contrast, coins that use the proof of possession mechanism require buying a quantity of coins and putting them to generate a return more easily. When you have coins that are securing the network, it is called ” staking “.

A few years ago, if you wanted to staking, most coins needed you to set up a team for this purpose. Nowadays, you can do staking from an exchange, with the risk that you do not have your private keys, and even from a physical wallet such as a Ledger or a Trezor , having control of your coins.

The amount of profit you can get varies by currency. Those that give a high yield are very attractive, but bear in mind that high inflation is a selling pressure and it is more difficult for the price to be sustainable over time. The inflation values ​​that I think are viable are all those below 10% per year.

What cryptocurrencies have proof of possession?

In addition, in some cases the “dividend” payments are through another currency, as in the case of NEO, which pays the rewards in the GAS token. I do not recommend these cryptocurrencies for the purpose of generating passive income, because the benefits do not accumulate or compound interest is generated and you have to be aware of two assets.

I am going to give a few examples of the cryptocurrencies that have a proof of possession mechanism, their annual profit percentages and where you can staking. It is not a purchase recommendation, just a brief summary, but they are the ones that seem most interesting to me: Tezos , Algorand , Cosmos and Harmony .

Personally, I have Tezos and Harmony and am staking both.

You can see my tutorial on how to staking tezos from a Ledger Nano wallet to be able to earn passive income safely.

Currency % Annual Staking From Exchange Staking From Wallet
Tezos (XTZ) > 5.5 Binance, Coinbase, Kraken, KuCoin Ledger, Trezor, Mobile Apps and Desktop
Algorand (ALGO) > 8 Binance, Coinbase, KuCoin Ledger, Mobile Apps and Desktop
Cosmos (ATOM) > 6 Binance, Coinbase, KuCoin, Poloniex Ledger, Mobile Apps and Desktop
Harmony (One) > 8 Binance Binance, Mobile Apps and Desktop

Advice

Most of the coins that have proof of possession require that you install and have your wallet connected 24 hours a day. The ones that I have included in the table can give you dividends from a physical portfolio such as Trezor or Ledger , you have the keys and therefore they are the safest way .

They usually have a “maturing” period, so you will have to go for a while without receiving rewards. However, when you withdraw your coins from the wallet, you will continue to receive rewards for a period equal to what you expected.

Make sure that the payments are in the same currency as the one you have ensuring the network. All the ones I have included in the table above meet this requirement.

If you decide to staking from an exchange, distribute your funds in different wallets or online services, for security.

Remember that you will earn a percentage of the amount you have, the more coins, the more reward and vice versa. Compound interest is generated, as you have more, you get paid more .

In addition, an increase in the price of the asset can increase the value of both the initial investment and the dividends . However, the same happens if the price decreases, keep in mind that you may lose your investment.

2. Exchange cryptocurrencies that pay dividends

Some exchange cryptocurrencies have their own token that offers dividends from the commissions they earn, commission reductions or advantages when investing in IEOs (Initial Exchange Offerings) or initial coin offerings.

Exchanges always win, like casinos, so it is a fairly safe way to make passive income with cryptocurrencies. However, it has its associated risks:

  • If the exchange loses volume, you will make less money and the value of the currency will likely decrease.
  • If the exchange is hacked, you lose your coins.
  • You are at the complete disposal of the business executives.

One of the best-known exchange tokens is Binance Coin , which is in the top 10 of the cryptocurrencies in market capitalization at the time this article was written. However, the cryptocurrency of the Binance exchange does not offer dividends , it only offers discounts and advantages on its IEOs.

List of high dividend exchange tokens

The advantage of these tokens over proof of possession coins is that they share part of the profits and can be higher percentages.

Although Binance Coin has no dividends, Kucoin and Bitmax have a high annual dividend.

In addition, an increase in the price of the asset can increase the value of both the initial investment and the dividends. However, the same happens if the price decreases, keep in mind that you may lose your investment.

The return of Bitmax is quite suspicious, so I recommend KuCoin Shares , staking or cryptocurrency loans with interest .

3. Cryptocurrency loans with interest

It consists of lending your cryptocurrencies to third parties in exchange for interest, like lifelong loans. Interest is payments in exchange for giving others the opportunity to create value.

In most they use central organizations that guard your assets and ensure that each party fulfills its obligations. DeFi, or decentralized finance , allows these processes to be carried out without third parties involved , through smart contracts.

You can lend your cryptocurrencies to earn interest in the following ways:

Ia. Loans in exchange to operate with leverage :

  • Kraken
  • Bitfinex
  • Poloniex

Ib. Loans on exchanges automated by bots:

  • Coinlend
  • Cryptolend

II. “Conventional” financial services :

  • Blockfi
  • Celsius Network

III. Decentralized financial services :

  • AVEE (LEND)
  • Compound (COMP)
  • Other platforms for making user-to-user loans without a central body (DeFi)

Ia. Exchange loans to operate with leverage

Loans on a cryptocurrency exchange so that other users can use leverage and trade a position larger than the funds they have.

Kraken

Under the “staking” tab, Kraken allows you to lend Bitcoin (XBT) , Dollars (USD) or Euros (EUR) in exchange for annual interest.

The loan is made directly into your leverage pool . Therefore, it is an annual fixed interest on the amount that you put at their disposal and they are in charge of lending it at the interest they deem appropriate.

The main advantage is that you do not have to worry about setting a rate nor do you have to be aware of whether the loan has ended . You put your coins at their disposal and they take care of the rest, although the interest is lower than in other exchanges.

The interests it provides are:


Bitfinex

Under the “Funding” tab, Bitfinex allows you to make your cryptocurrencies available to traders who want to use leverage.

You can define your own terms such as the interest rate , maximum loan duration , and amount . When a trader uses leverage, they use your cryptocurrencies to buy or sell another cryptocurrency (open a position). When closing the position, the money is returned to your wallet along with the interest, in the same currency as the loan.

The amount of interest you can earn is calculated:

Daily interest = Amount borrowed * defined rate * 0.85 * seconds borrowed / seconds a day has

In the following table you can see the calculation of the benefits that can be obtained by lending $10,000 with the interest rate of the day, of 0.017%.

Initial
Amount Borrowed		 $10,000
Interest Rate 0.02%
Loan Time (Days) Interest ($) Interest (%)
1 $2.01 0.02%
2 $4.02 0.03%
3 $6.03 0.05%
4 $8.04 0.07%
5 $10.05 0.09%
6 $12.06 0.10%
7 $14.07 0.12%
8 $16.08 0.14%
9 $18.09 0.15%
10 $20.10 0.17%
365 $733.65 6.21%

During times of high volume and therefore high demand for loans to open positions with leverage, the rate is 3 – 5%. Therefore, at the right times you can easily double this amount of interest.

You don’t lose your money if the person who asked for the money loses it . Bitfinex users can only borrow a% of their account and if they are at a 33% loss, their position is closed and the loan is returned to you.

The main problem is that you have to be aware of whether the loan has ended and renew it. Consequently, it is no longer really passive income. Bots like Coinlend fix it.

Poloniex

Poloniex offers the possibility of lending your cryptocurrencies so that other people can trade with leverage.

Unlike other exchanges, Poloniex does not guarantee the safety of your funds and warns you that you may lose your money if borrowers liquidate in volatile markets. In times of high volatility, they may not jump the stops and may lose more money than they are required to return, so they have more associated risk than Kraken or Bitfinex.

At the time of writing the article, it offers the possibility of lending the following cryptocurrencies:

  • Bitcoin (BTC)
  • Dash (DASH)
  • Litecoin (LTC)
  • Stellar Lumens (XLM)
  • Tether (USDT)
  • Monero (XMR)
  • Ripple (XRP)
  • Ethereum (ETH)
  • Ethereum Classic (ETC)
  • EOS (EOS)
  • USD Coin (USDC)
  • Bitcoin Cash (BCH)
  • Bitcoin SV (BSV)
  • Cosmos (ATOM)
  • Tron (TRX).

Annual interest percentages range from 0.03% for less demanding cryptocurrencies to 3% per year for Bitcoin or 7% per year for USDT.

Ib. Loans on exchanges automated by bots:

Loans in cryptocurrency exchanges through bots, to automate the loans and you can get passive income with real cryptocurrencies.

Coinlend

Coinlend is a program or bot that automatically lends your money on exchanges like Bitfinex , Poloniex or Liquid .

As I have discussed in your section, Bitfinex and Poloniex loans require you to update them periodically. It is a cumbersome process because you have to be aware of whether the loan has ended to set up a new one.

Bots like Coinlend allow you to automate it 24 hours a day, 7 days a week for a minimum commission of $ 4 per month and 5% of the interest generated. I have not tried it personally, but I am convinced that it has to be worth it.

Your money is stored in an exchange and, through an API, you give it permissions to access some functions of your account that you can control . So the real risk is the same as storing your coins on an exchange.

The accepted currencies are those that the exchanges have available for loans. The following image shows those available when the article was written.

Cryptolend

Cryptolend is an exchange lending bot much like Coinlend. It currently accepts the Bitfinex and Poloniex exchanges.

Connect the bot to your exchange account through an API and in a few clicks you have the bot configured to automate loans at the best possible prices.

The risk of losing your coins is the same as having your assets on an exchange. Although I still recommend saving your cryptocurrencies in a Trezor or Ledger , it is an easy way to get passive income with the assets you have on the exchange to trade or longer trades.

II. Conventional financial services

Blockfi

BlockFi offers loans in USD guaranteed by your cryptocurrencies.

They provide you with dollars in exchange for depositing Bitcoin (BTC), Ether (ETH), or Litecoin (LTC) as a refund guarantee.

Also, you can deposit certain cryptocurrencies to earn annual interest. The annual calculation is based on current rates and the payments received are added to the same account ( compound interest ).

The coins you can deposit are:

  • Cryptocurrencies: Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), Paxos Standard (PAX)
  • Fiat currencies: USD Coin (USDC), Gemini USD (GUSD)

The approximate annual interests for each of them are:

Celsius Network

Celsius network is a mobile application that allows you to deposit, transfer, lend and take loans of different cryptocurrencies.

They offer interest on loans of a large amount of cryptocurrencies. Interest varies depending on the cryptocurrency you lend, but the values ​​range between 3% and 9%.

You can choose to charge the interest on your CEL token, which uses the Ethereum blockchain, or you can charge it on the asset you lend. The interests you receive are higher if you charge them in your token.

The following list shows the assets that can be lent, both cryptocurrencies and stablecoins.

  • Cryptocurrencies : Bitcoin (BTC), Ethereum (ETH), Dash (DASH), Bitcoin Cash (BCH), Bitcoin SV (BSV), Litecoin (LTC), Ripple (XRP), Stellar Lumens (XLM), Omise Go (OMG) , Paxos Standard (PAX), Dai (DAI), Celsius (CEL), 0x (ZRX), EOS (EOS), Saga (SGA), Tether Gold (XAUT), Ethereum Classic (ETC) and Basic Attention Token (BAT) .
  • Stable or tokenized fiat currencies : True USD (TUSD), Gemini Dollar (GUSD), USD Coin (USDC), Tether (USDT), TrueGPB (TGBP), TrueAUD, TrueHKD, TrueCAD, Binance USD (BUSD).

III. User-to-user loans without a central body

This method to get passive income with cryptocurrencies is one of the safest, as with staking, you can earn interest while maintaining total control of your cryptocurrencies.

AVEE (LEND)

Aave (AAVE) is an open source, non-custodial protocol that enables the creation of money markets. Users can earn interest on deposits and borrowed assets.

AAVE changes the user-to-user (P2P) lending protocol to a pooled strategy. Lenders provide liquidity by depositing cryptocurrencies in a shared group contract.

Simultaneously, in the same contract, pooled funds can be borrowed by placing a guarantee, in the form of cryptocurrencies. Loans do not need to be matched one-to-one, but are dependent on group funds, as well as loan amounts and collateral. This allows instant loans based on the status of the group.

Unlike conventional financial services , you do not send cryptocurrencies to anyone and, therefore, you maintain control of the private keys of your cryptocurrencies . You can use wallets like Metamask or even Ledger . In this way, you lend your assets to get performance from them safely and without worry .

The returns it offers are between 0 and 13% and the assets it allows to lend are:

  • Cryptocurrencies : Ethereum (ETH), Dai (DAI), ETHLend (LEND), Basic Attention Token (BAT), Enjin Coin (ENJ), Ren (REN), Kyber Network (KNC), Chainlink (LINK), Decentraland (MANA) , Maker (MKR), Augur (REP), Synthetix Network Token (SNX), Wrapped Bitcoin (WBTC) and 0x (ZRX).
  • Stable coins or tokenized fiat currencies : True USD (TUSD), sUSD (SUSD), USD Coin (USDC), Tether (USDT) and Binance USD (BUSD).

Compound (COMP)

Compound (COMP) is a decentralized lending application that uses the Ethereum blockchain. Essentially, anyone who owns an accepted cryptocurrency can deposit it into a Compound smart contract, where it joins a pool and starts earning interest.

This interest comes from other users who borrow funds and pay interest on the loans. However, unlike banks, when you withdraw the funds, they do not stop earning interest.

When you deposit funds in Compound, the protocol generates tokens for you. If you deposit Ether (ETH), you receive an amount of cETH, which you can use as collateral (or surety) to request a loan and spend the funds while earning you interest.

The interest earned is regulated by smart contracts, based on supply and demand. If there are a large number of people borrowing a particular asset, the smart contract will increase the interest rate to attract lenders and make it more expensive to obtain a loan.

Compound currently supports assets:

  • Cryptocurrencies: Ethereum (ETH), Dai (DAI), Basic Attention Token (BAT), Augur (REP), Wrapped Bitcoin (WBTC) and 0x (ZRX).
  • Stable currencies or tokenized fiat currencies: USD Coin (USDC) and Tether (USDT).

Other platforms for making user-to-user loans without a central body (DeFi)

DeFi or decentralized finance is all the rage and there are many similar projects trying to take the lead in the sector.

Here is a non-exhaustive list that will grow in the near future. I have not personally checked if they are reliable, if they are scams and I do not gain anything by mentioning them.

  • Kava
  • Nexus
  • EOSRex
  • Fulcrum
  • NUO Network
  • Voluto
  • PoolTogether
  • Dharma
  • dYdX

If you liked the article on how to get passive income with cryptocurrencies, share it with your friends so they can benefit too!

Note: Some of the services contain affiliate links. It is the only source of income for this blog and you do not lose anything by using them. I will never promote scams.

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Real Estate, FAQs

Can I buy real estate property in the US if I live outside the country?

Buying a home is a step that requires deep analysis. It is not only about the place where you are going to live, but the amount and the years that are going to be invested.

Some nonresident aliens have chosen to buy a home in the United States. The most requested payment is in cash.

Buying a house is a step that requires a deep analysis. It is not only about the place where you are going to live, but the amount and the years that are going to be invested. CNN published a video in which the details that the potential foreign buyer should know are listed.

According to data from the National Association of Realtors, between April 2019 and March 2020, foreigners acquired a volume of houses in the United States worth $74 billion , it is quoted in the audiovisual. 61% were people who had recent residence in that country. With Texas, New York, California, Florida and New Yersey being the top five most preferred states.

CNN reports that purchasing conditions differ between those who are not Americans and permanently live outside the country and recent residents (or visa holders).

Of these two groups, the second has more facilities to buy a residence because it is easier for banks to acquire information about their finances. However, CNN highlights, there are foreigners outside the US buying houses, mainly from China, Colombia, Mexico and India .

So can I buy a house in the United States if I live abroad?

According to the publication, although there is no law that prohibits foreigners from buying houses in the US, there are prohibitions related to national security that can vary by state.

Knowing these rules in advance, you can buy a condo, but with certain limitations, says the American media.

Nonresident aliens tend to buy with cash, compared to those who do live in the United States. The latter opt for financing because they have greater access to banks in the country.

This is an alien reality for those who are outside. CNN highlights that there are no loans subsidized by the Federal Housing Federation for non-resident foreigners. This makes banks more demanding.

The requirements are made innumerable because financial institutions cannot access the credit history of the future buyer and have to apply another procedure. Added to the list is that the initial value is high. There are banks that ask for up to 20% down payment , says CNN.

Interest also goes up. In these cases it is 8% , according to Fidelity Group. Another limitation is that the property cannot be a reason for moving but for investment . The foreigner needs to demonstrate that he has economic stability in the country he resides and that his intention is to rent the house or use it for another activity.

CNN also highlights the taxes each state collects annually from homeowners. The foreigner will have to pay them even if they do not live in the United States.

In conclusion?

Buying a house in the United States is not an easy procedure, but it is not impossible either. At first, non-resident foreigners can buy their home, although with cash the process is easier.

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Real Estate, FAQs

Beginner’s guide on real estate investing strategies

Real estate investments are one of the greatest sources of wealth in history. Of the total global assets, 60% corresponds to real estate. Learn to invest even with little money.

What is real estate

Real estate, real estate or farms are the things that cannot be transported, such as land and mines, and those that are permanently attached to them, such as buildings. Real estate investments include sale, rent and other business models related to real estate.

Tax dictionary, supplemented by income passive.co

Is it good to invest in real estate?

Knowing if investing in real estate is a good business is one of the most frequent questions of those who want to venture into this field.

We are going to answer the question from several angles:

First, according to Wealth X , 7.6% of wealthy people built their fortune in real estate.

On the other hand, according to ecyY (founder of the information and research center for Development and research on construction REDBRIC) of the total global assets, 60% corresponds to real estate.

According to a Morgan Stanley survey , 77% of millionaire investors in the United States own real estate investments.

With these data there is no doubt that real estate investments CAN be an excellent business. That said, it’s important to say that like all businesses, it has risks and downsides, which we’ll talk about later in this article.

Robert Kiyosaki’s phrase is famous , perfectly applicable to real estate investments:

“Risk is not the investment but the investor.”

Kiyosaki

Real estate has some characteristics that make it excellent investments, however, it is important to have a solid strategy and well-founded knowledge when investing.

In response to the question: Investing in real estate can be an excellent business if you select the right business model for your situation, knowledge, available assets and market situation.

Read on to learn more about low-cost real estate investment business models.

Countries to invest in real estate

Investing in real estate is a more local investment alternative than other options such as stocks, mutual funds or bonds. The success of a real estate investment depends on many local aspects, such as the growth of the market in a specific area, in a specific segment and at a specific time. In addition, knowledge of local regulations and codes is essential.

With this in mind, often the best place to invest is the one you know best . If you live in Philadelphia, you will probably have access to more and better sources of information about the used housing market in that city than if you live in San Francisco or Miami.

On the other hand, in case you need resources, such as tax advisers, real estate lawyers or even plumbers or electricians, you are better prepared if your investment is in the place you know best.

Despite the above, there are many ways to invest in other countries, such as REITs, real estate ETFs among other figures that we will see later in the article.

The best countries to invest today, according to the Fine Homes and Living portal are the following:

United Arab Emirates: It is a country with tax benefits in which it is feasible to obtain high returns for real estate investors. There is no income tax. It is possible to achieve an income yield of 5.19%.

Germany: It is a safe bet for investors looking for opportunities in Europe. Germany is a super power and a thriving economy with stable conditions.

France: Another popular destination for real estate investment in Europe. France is the best option for real estate investors looking for a long-term return. Mortgage interests are low and it is possible to finance up to 85% of the value of the properties.

United States: It is considered the best country for real estate investments. Several cities score high in the rankings of the best destinations for real estate investors, such as Los Angeles, San Francisco, New York and Washington DC.

Other countries to consider are: Canada, Australia, Turkey, Indonesia, Colombia, the Philippines and Morocco

Advantages and Disadvantages of investing in real estate

We start with the downsides of real estate investments:

Disadvantages of investing in real estate:

  • High transactional costs: Buying or selling real estate has numerous associated costs, which vary with the country and the city. Taxes, fees, contributions, notary fees, agency fees, property transfer costs are just some of the frequent outlays.
  • Low liquidity: Selling real estate is slow, unless you sacrifice a significant part of the asset. It is faster to sell stocks, bonds, shares in funds than real estate.
  • Real estate requires management and maintenance, which carries additional costs.
  • The real estate markets have significant inefficiencies. This point is in both the advantages and the disadvantages, precisely because inefficiencies can play for or against.
  • Real estate often carries financial and legal liabilities. If you have a property, the pipe breaks and floods the apartment below, you have a responsibility. It is essential to cover yourself with insurance against all risks.
  • High cost: In most cases, real estate has a high cost, which inhibits many investors without much capital to invest in them. This can be mitigated by using financing or investing in other business models that require low capital.
  • In the case of rental properties, there is often a time of no income when one tenant leaves and another enters.
  • The tenant (s) can stop paying. When renting a property it is advisable to take out rental insurance to maintain the rental income, even if the tenant stops paying.
  • The real estate market is very local. When changing city or country, taxes, costs, recovery areas and the dynamics of the sector change.
  • Events outside the property can drastically change the value of the property: Pollution, noise, new contiguous developments, new legislation, among many others. This point can eventually also lean towards the advantages. More than one neighborhood has been greatly appreciated by new roads or shopping centers in the area of ​​influence.

Advantages of real estate investments

  • Double income for valuation and rent
  • Good refuge from inflation
  • Easy to understand investment
  • Real estate market is inefficient, allowing bargains to be found
  • Real estate assets can be easily financed because they provide collateral for the lender.

Why Invest in Real Estate?

In addition to the advantages that we indicated above, investing in real estate has some characteristics that make it very attractive:

  • In the long term they tend to appreciate
  • They are relatively passive investments, that is, the administration of a property requires less management and time than many businesses
  • It is possible to build scalable businesses from real estate.
  • Positive cash flow: by calculating and executing the financing conditions well, it is possible to have one or more properties with a positive cash flow, which allows the business model to scale.
  • It is possible to improve assets, increasing valuation and income.
  • The same property can produce income for life.
  • It is possible to start with very simple business models, such as buy and sell or buy and rent, and move towards more complex business models (such as buying land and building) as you have more knowledge and experience.

How to invest in real estate with little money

Fortunately, there are business models, which we will see in more detail later, through which it is possible to invest in real estate without much money. Some of them are:

  • Securitization
  • Real Estate Crowdfunding
  • ETFs
  • Pro-undivided funds
  • REITs

Real Estate Investments: 12 business models

Today there are numerous business models for investing in real estate of all kinds, for all budgets and levels of experience and knowledge.

Next, we will list some of these models, so that you can choose those that best suit your current situation:

Buy and sell (flipping houses)

It is one of the simplest models that exists, however, there are techniques to make this modality a scalable and sustainable business over time. It should be mentioned that it is not a passive business , in the sense that it requires a lot of work to execute it properly.

The essence consists of buying a property and reselling it at a higher price, in such a way that a profit is obtained from the operation, after subtracting all the implicit expenses. People who are dedicated to this business specialize in obtaining information on dations in payment or auctions, in such a way that they manage to buy real estate at prices lower than the market average.

Buy, remodel and sell

A very frequent variant consists of remodeling, renovating or improving the property that is purchased. As the goods that these investors buy in many cases are in poor condition, by improving their standing, the expectation of the sale price increases significantly.

Buying, remodeling and selling requires knowledge, dedication and a team of specialists, so that the operation results in profitability.

By “team of specialists” I normally mean a real estate agent, a construction contractor, a real estate agent who helps to find the appropriate properties for purchase, a real estate attorney who is proficient in the study of titles and the buying processes and transfer of ownership. Having a good accountant to support you in the tax planning of operations is highly recommended.

Buy and rent

This is another type of figure, in fact, it is the one that I have used the most for years. Unlike buying and selling, this operation seeks to keep the property for a much longer period of time, which makes it a much more passive type of business.

Buying and renting is a real estate business model applicable to various types of properties: housing, commercial, industrial and offices.

Buy and rent furnished

This variation in the figure of buying and renting is very common in some cities, and in some sectors in which the term of the rental contract is short, say months and up to a year. The furniture impacts the rental fee upwards, so that the purchase value is amortized.

Buy, remodel and rent

It is a variation of the buy and rent model, according to which it is sought to increase the value of the rent through an improvement of the property. As always, it is necessary to calculate if the value of the remodeling is recovered through the higher value of the rental fee.

The phrase is called “buy, rehab, rent, refinance, repeat” (BRRRR for its acronym) which ultimately seeks to use mortgage credit (long-term and low rate) to cover the costs of remodeling through the refinancing of the remodeled property.

REITs

REITs are an abbreviation for Real Estate Investment Trust, that is, Real Estate Investment Trust. A REIT is a publicly traded real estate investment company (usually the owner and manager of real estate that produces rental income).

In the same way as a company can issue shares that are publicly traded and investors can buy them to be co-owners of the company and receive a fraction of its profits through dividends, in the same way through a REIT a person can be co-owners of large residential or commercial real estate and get part of its profits.

REITs earn their income from the rental fees they collect from tenants on real estate and / or interest on mortgages and transfer most of the income to investors, via dividends.

On the other hand, REITs and their investors profit from the gradual depreciation of the properties they own.

There are currently 3 types of REITs:

Capital REITs:

They are owners of large residential properties (buildings, apartment complexes or complexes of houses) or commercial (hotels, offices, shopping centers, data centers, medical centers, cell phone antennas and industrial estates, among others) and obtain their profits mainly from rents paid by the tenants of the properties

Mortgage REITs

They own the mortgages backed by real estate and derive their income mainly from the interest paid by the borrowers.

Mixed REITs

They are companies that own both real estate and mortgages and derive their income from income on real estate and from interest on mortgages.

To give you an idea of ​​the popularity of these instruments, according to the Morgan Stanley report , 35% of millionaire investors in the United States own REITs.

ETFs

ETFs is corresponds to Exchange Traded Funds in English, or Funds Traded on Stock Exchanges. For a more detailed explanation, we invite you to read the article on ETFs and index funds .

In short, a REIT ETF is a collection of REITs that are traded as a complete package. For example, the Vanguard Real Estate ETF is a fund that is traded on the stock exchange under the symbol VNQ and is made up of REITs in various real estate sectors:

  • Properties for health centers: 8.6%
  • Hotels and Resorts: 2.5%
  • Industrial properties: 11.5%
  • Residential real estate: 13.2%
  • Specialized REITs: 42%
  • Shopping centers and warehouses (retail): 8.1%
  • Offices: 7.4%

among others.

By investing in ETFs containing REITs we can increase diversification by type of property (residential, commercial and industrial) and by geographic region, since the properties are located in different countries and continents.

If at first glance it seems a bit complex, don’t be scared. Both REITs and ETFs are widely used instruments that you can access through an investment account. In the article on ETFs and Index Funds we give you some suggestions.

However, it is important that you read the prospectuses, know the historical behaviors and raise awareness about the risks and mitigations before investing.

Real Estate Crowdfunding

Crowdfunding is another figure that allows you to access real estate investments, even if you don’t have a lot of money. In our article on Crowdfunding and Crowdlending you can go deeper into this interesting concept.

Real estate crowdfunding is a model that seeks, through a technological platform, to unite investors and promoters of a real estate project so that it can be carried out.

For example, if I want to build an apartment building in a certain specific location, but I don’t have enough money to finance the work, I can present the project to a specialized platform, so that potential investors know about it, review and compare the profitability and risks against other projects. If they are attracted to it, they will invest their money in the project, and it will be built.

Securitization

This scheme is similar to REITs, although they have some method differences:

A securitization company sells the securities to investors like you, and in return you receive a right to benefit from it .

In other words, if the securitization company builds an office building, you are entitled to a fraction of the rent that tenants pay monthly in exchange for your money.

Important: You are not a co-owner of the property. You own the usufruct rights over the asset.

Divide properties

Dividing a house into two or more apartments or a large apartment into two small ones is sometimes possible and very profitable and other times it is totally impossible.

The demographic profile of families in most countries has changed dramatically. 50 years ago it was not uncommon to find families of 6, 7 and even 10 people.

In the following graph with data from the United States Census Bureau we can confirm this trend.

Today most families are small (having only 1 to 3 people) .

This change makes large houses and apartments oversized for the need of the average family. In addition, the high prices for buying and renting real estate makes us look for smaller flats.

Given these perspectives, the division of real estate makes a lot of sense.

NEVERTHELESS…

Carrying out a work of these characteristics may require the permission of the joint ownership and of the respective governmental entity: the city council or the mayor’s office.

To apply for permits you must do a complete project, which has architectural, structural, legal and financial implications, among others.

Build and develop real estate projects

In the development of real estate projects, there is usually the greatest potential for operating profits while owning the property and greater capital gains at the time of sale.

It is a risky process, but a satisfying one, once executed successfully.

The process of developing real estate projects requires a lot of knowledge in various areas, such as finance, engineering, urban legal, commercial and project management among many others, as well as a team of professionals each expert in their area.

What is understood by real estate development:

According to Ben Bulloch & John Sullivan , real estate development is the process of creating value by making tangible improvements to real estate.

Developing a real estate property is achieved either by building structures, modifying existing ones or generally improving a real estate property in a way that increases its value. Real estate includes permanent or temporary land and structures that occupy this land.

The phases of a real estate development

  • Pre development: understand the market; find the property, analysis and study of the property; the area, the local regulations; design; negotiation with tenants; cost analysis and redesign and negotiation with the community.
  • Construction
  • Post development: There are generally two options. Maintain it and operate or sell it.

Tourist income through the sharing economy (Airbnb model)

Through this model you can rent your apartment, your house or even a room inside the apartment you live in. It allows you to obtain additional income from a property that you own, even if you live in it.

We include this modality in the list of ways to invest in real estate with little money, since you do not even have to own the property. On the other hand, you can receive more money through Airbnb or Booking for tourist housing than through a conventional long-term rental.

Airbnb: The other side of the coin

So far there are many advantages, however, it is necessary to take into account:

  • Tourist rents through sharing economy platforms are not a passive business model.
  • Many cities, mainly those that are tourist destinations, have modified local legislation so that homes for tourist use have identical conditions to those of hotels in fiscal and tax terms. In other words: if they allow it, you do pay taxes like a hotel.
  • In many cases, the homeowner must request authorization from the co-ownership to make tourist use of the property.
  • The administration of tourist properties is expensive: admitting visitors, receiving the property for departing visitors, fixing, provisioning, repairing damage, etc. This implies more time and additional costs.
  • There are wonderful guests and others not so much: it is necessary to be very selective when accepting reservations.

Real Estate Investments as Property for Undivided or in Community

It is possible to buy a property between several people. If you and your friends want to buy an apartment for tourist rental in Barcelona and neither of them wants to invest all their assets to buy it, they can buy it together, so that they acquire it and benefit from it as a community.

When the property in joint venture generates income, these are distributed in the same proportion in which each co-owner owns the property.

The costs associated with maintenance and improvements must be borne by all co-owners pro rata of the participation of each one.

Aside from the obvious advantages, you have to anticipate the possibility that one or more will want to sell their stake and that the others will not want to sell.

Conclusion on real estate investments

  • Real estate investments have been a tool for generating wealth for centuries
  • It is possible to invest in real estate through numerous modalities, including some that require practically no capital. We have mentioned the following:

1 Buy and sell

2 Buy, remodel and sell

3 Buy and sell

4 Buy, rehab, rent, refinance, repeat

5 REITs

6 ETFs

7 Real estate crowdfunding

8 Securitization

9 Divide properties

10 Build or develop real estate projects

11 Tourist income through the sharing economy

12 Assets owned by individuals or in the community

  • All real estate investment models have advantages and disadvantages, as well as implicit risks that the investor must know, anticipate and mitigate through planning, knowledge of the rules and code and mitigate in the company of the work team constituted, among others, by a expert in real estate law, finance, construction, accounting among others.
  • Some options are much more difficult and risky than others. Get started in the world of real estate investments with the easiest and least risky options, such as REITs, ETFs or securitization.

As your knowledge and experience grow, study and prepare to venture into other increasingly profitable business models.

Start preparing now to have your real estate investments. In a few years you will see how you achieve an entire emporium.

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FAQs, Real Estate

What is fractional real estate?

Founded in January 2019, RealT is an American company based in Florida that offers fractional investment in real estate in the United States market through the Ethereum blockchain.

a) Fractional real estate: real estate investment for all?

In general, when you buy real estate you own it 100%: it is yours and yours alone. However, with the emergence of blockchain in recent years, a new concept has emerged: fractional real estate.Fractional real estate is based on the tokenization of goods: concretely, this results in the division of a good into token. Each token represents part of the ownership of the asset.Let’s take an example: a house that costs $100,000. To be able to buy it at 100% (classic real estate) you must pay $100,000 (cash or via a bank loan).With fractional real estate you can decide to buy only 10% of this house: in effect, the house has been divided into token. It was arbitrarily decided by the seller that the house would be divided into 1,000 tokens with a unit value of $100.Thus, if you want to own only 10% of the house, you will have to buy 100 tokens for a total value of $10,000. You will then be co-owner of the property and you will receive 10% of the annual rental income.What are the advantages of a fractional real estate investment?

  1. It’s more affordable: you only invest what you can afford and you don’t need to get a bank loan
  2. You reduce the risk of non-payment of rent: you can invest in several different properties to reduce the risk of non-payment of rent.
  3. You become an owner more quickly: during a classic real estate purchase, it takes at least several months before becoming an owner. With fractional real estate on the blockchain, a few hours is enough.
  4. It’s easier: no need to have a bank account in the United States or to be physically present for the signing of the contract!
  5. You keep your rights as owners: when a decision has to be made, a vote takes place on the blockchain.
  6. You can resell your tokens at any time : need liquidity? You can resell your tokens to RealT or resell them on the secondary market using Uniswap.

b) Tokenize real estate

It is this notion that is most often the most complicated to understand for people who are new to cryptocurrencies and blockchain: when I explained the concept of RealT to my mother the first time, she asked me if I had bought the toilet or the living room.In reality, when you buy a token, you are not buying a part of the house, you are buying a part of a company that owns the house: This company will own only one asset: the house or the building that the house is owned by. ‘we want to transform into a token. Thus legally the owner of the property is a company which itself is owned by investors through tokens. Each token represents a small part of the company and therefore by buying tokens you are actually buying a company which gives you back the money it receives from the tenants of the property.

c) Buying your first token

When buying your first token from RealT , you will have to register on the platform and fill out a form to indicate your identity. Once this has been verified, you can buy your tokens on the site.

If you are familiar with how cryptocurrencies work (You know how to create an Ethereum wallet, send and receive ethers, secure your wallet…) then you can go directly to the RealT website .

For beginners and for people who are not yet very comfortable with cryptocurrencies and the Ethereum blockchain, I recorded a video training in which I explain step by step how to invest on this platform .

d) Payment of rent

Rental payments are made in USDC, a stablecoin (ie a cryptocurrency that tracks the price of a fiat currency. Here, the USDC tracks the USD, the US dollar). The rents are sent to your Ethereum wallet. You can then convert your USDC into USD, EUROS or any other classic currency.Originally, rent payments were to be made daily, but due to the increased transaction fees on the Ethereum blockchain it was decided that rent payments would take place once a week on Wednesday. The RealT team is working on a new payment system that will allow them to have more flexibility.

e) Reinvestment of rents and secondary market: Uniswap

When you own at least one token of a real estate then you are part of the whitelist of investors for this good and you have access to the secondary market which uses the Uniswap protocol .Uniswap allows you to create liquidity for a RealToken : some investors may decide to sell their RealToken on Uniswap and therefore allow other whitelisted investors to buy back their tokens at the price of the Uniswap price. Thus, even if all the tokens appear as sold on the RealT site , it is possible to continue buying them on the secondary market as long as you have purchased at least one on the RealT site and that you are therefore on the white list.On the RealT website , you are obliged to buy a whole number of tokens: 1 token, 2 tokens, 10 tokens… This is not the case on Uniswap where you can buy fractions of RealToken : thus, you can buy 0.237366423943342345 or 3.748320394325346346 tokens if you like! In particular, this allows you to reinvest the rents you receive without waiting for the amount needed to buy a full token on the RealT site .

f) The revaluation of the property: the annual audit

Over time, the value of a property changes: to allow investors to follow this development, RealT uses an independent auditor to assess the value of the property each year. This audit is then made available on the property sheet on the RealT site .The evolution of the value of the good also causes another parameter to evolve: the price of the token. Therefore, if the value of the asset increases, the value of your token increases and you can resell it for more.

g) Resale

With classic real estate, the resale of real estate can be long and complicated: this is not the case with fractional real estate because you do not sell all the property, but only the fraction that belongs to you ( your tokens).There are currently three ways to resell your tokens:

  1. On the RealT site : The company buys back your tokens from you at the price in effect on their site for a sales charge (a small percentage of the total amount). RealT will then release them for free sale on its website.
  2. On Uniswap: You can put your tokens on Uniswap and wait for someone to buy them back from you. The price is set automatically by Uniswap based on availability and demand.
  3. By directly finding an investor who is already on the whitelist: Thanks to the Telegram group and the Discord server, you will quite easily find an investor who can buy back your tokens. You will set the price yourself in agreement with the buyer.
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