STAFF NEWS & ANALYSIS
Imagine selling your home, and still living in it
By Kevin Bloom - October 14, 2019

I went into why I don’t think the current cryptocurrencies function as a store of value in my last article.

I don’t think Bitcoin, in particular, will reach its lofty heights again because of the principle of substitution—there are lots of other cryptocurrencies right now (I like Waves, because of their desktop trading system) and many of them are faster and cheaper to use than Bitcoin.

The good news is that there are better cryptocurrencies coming, that will pay dividends and rise in value, and will actually function as an investment AND a store of value. IBM just made a big splash by partnering with Securitize to change the way corporate debt is traded.

That’s cool and fun, but not really quite what I have in mind.

Almost everyone thinks they know what a mortgage is, just as I did, and I spent years in the real estate industry dealing with mortgages all the time. It’s just a process, people go to the mortgage company, fill out oodles of forms, and eventually, the mortgage company sends a check to the title company and we’d have a closing.

The title company would write checks to everyone who had one coming, and then we’d all go for drinks and snacks. But do you know who the money for the mortgage comes from? Would it surprise you to know that it comes from YOU?

Nowadays, the government issues the money and takes the payments. The mortgage company just services the loan, for which they get upfront fees and 3/8 of a percent. This happens in the vast majority of mortgages in the United States. Since the government collects the taxes from you… you get to pay twice, at least!

What if mortgages weren’t what we think of them as now, but a store of value rather than just a debt? What if you didn’t have to make monthly payments? What if the property itself guaranteed a stable token? What if you could just pay a dividend once a year?

We could extend this idea to both commercial and consumer mortgages, and the owners of the tokens could gain from both appreciation and dividends. If the property was sold, the token holders would receive the payoff. The owner of record could be a token holder, or not.

You could mortgage your own house, in pieces if you chose, and pay it off if and when you liked.

Someday we’ll have stable coins backed by land. Also, airplanes, ships, and cars. Plus corporate debt, of course.

More to come…

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