Brother, Can You Spare a Bitcoin? Miami Mansion Is Listed for About 1,400BTC (or $6.5M)

 
It wasn’t long ago that bitcoin was virtually worthless: In 2011, anyone could buy a single unit of the digital currency for around $1. Today, it would set you back $4,600. A $20 investment in bitcoin six years ago would be worth more than $92,000 today.

The world’s newly minted bitcoin millionaires are now hunting for big-ticket items to buy with their cryptocurrency. And what better place to drop some cash, virtually or otherwise, than some luxury real estate?


Earlier this month, bitcoin trader Mike Komaransky listed his 9,500-square-foot mansion in an upscale Miami suburb for a little shy of 1,400 bitcoins, or $6.5 million. Komaransky said he’ll also accept Zcash, another digital currency, and even plain old greenbacks.

Komaransky joins a small but growing number of homeowners who’ve offered to sell their homes for cryptocurrency. According to experts in Bitcoin, the currency and its underlying technology, the blockchain, will eventually revolutionize real estate.
But if you don’t know what bitcoin is, you’re not alone.

Bitcoin background

Bitcoin was the first cryptocurrency, a decentralized form of digital money that can be bought, sold, traded, and earned anonymously over the internet.
It was created in 2009 by a mysterious coder who went by the fictitious name of Satoshi Nakamoto, and has since inspired hundreds of smaller cryptocurrencies. People trade it through “mining”—a complex digital record keeping service and computer-driven transactional process designed for confidentiality and security. People can exchange bitcoins—the primary monetary unit—for cash, or to buy things online.
Every cryptocurrency transaction is recorded on a massive, public ledger called a blockchain.
In its short history, the value of bitcoin has swung wildly. In early 2011, a bitcoin was trading for around $1, jumped to $30 by the summer, and plunged back down to $2 by that Christmas. Less than two years later, it was trading for over $250.
In January this year, a bitcoin was trading for around $1,000—and its value has more than quadrupled since then.
On this point, Komaransky says he hasn’t set a hard cryptocurrency price on his house, adding that he’s looking for $6.5 million worth of cryptocurrency at closing. As of this writing, that’s about 1,373 bitcoins.

Bitcoin accepted here

Bitcoin’s volatile value doesn’t faze Komaransky, who says he’d prefer a cryptocurrency transaction for the home, which he bought in 2014 for $4.6 million.
“The tax issues are really straightforward; I don’t see any issues with that. Legal issues, I don’t see a problem,” says Komaransky. “The actual transfer of value in the form of bitcoins? It may actually be less risky to make a transaction with bitcoins than cash.
“Bitcoins, due to their irreversible and instantaneous nature, make the process much quicker. And once you have the coins in your possession, it’s a done deal, and anyone can see it because it’s on the blockchain.”
Komaransky is the former head of trading at Cumberland Mining, a large trading desk that helps people buy and sell cryptocurrency for cash. Cumberland Mining is best known for successfully buying 27,000 bitcoins at a U.S. Marshals Service auction in 2015.

What will your bitcoins be buying?

Komaransky's seven-bedroom, 8.5-bath mansion sits on an acre in Ponce-Davis, an affluent community south of Miami. It’s quintessentially Floridian, with a custom pool and spa, wraparound balcony, pool house with outdoor kitchen, and tropical landscaping.


There's a first-floor game room with a saltwater aquarium and wet bar. The all-white kitchen is anchored by a breakfast island and features a stainless-steel gas range, two refrigerators, and a butler’s pantry.





Elsewhere, there’s a library with floor-to-ceiling built-in bookcases (complete with a rolling ladder), playground, basketball court, and three-car garage.

How does the transaction go down?

Listing agents Carol Cassis and Stephan Burke say they’ve already talked to two bitcoin investors intrigued by the sale.
“For people who bought bitcoin years ago, they’ve seen its value increase a lot,” Burke says. “Buying a house with that investment is pretty interesting for them.”

A buyer using cryptocurrency will still need to go through the traditional title process, putting a small deposit in escrow while the title company transfers the homeownership. Once everything is complete, the buyer will need to transfer the remaining digital coins to either the title company or the seller.
“Buyers and sellers can agree to any transaction where there’s a transfer of value,” Burke says. “Someone could sell their house for 50 apples if they wanted to. That’s reflected on the closing statement, which is required by law.”

It’s still extremely rare to buy a home with bitcoin, and it might be many years before homes are regularly bought and sold using cryptocurrency.
What’s far more likely is brokers using the blockchain technology to speed up real estate transactions. The goal, Burke says, is to eventually compress the closing process to hours, not days, by instantly verifying data using a public ledger.

Luke Stangel writes about real estate, technology, and startups. His work has been published in the Mercury News, Contra Costa Times, and Silicon Valley Business Journal.

Follow @luke_stangel