Bitcoin vs Real Estate

A significant portion of global wealth is stored in real estate — not because people necessarily want to be landlords, but because property has historically been one of the few assets that keeps pace with or exceeds inflation over long periods.

Real estate has properties that make it useful as a store of value: it’s scarce (land is finite), it’s durable, it generates income, and it tends to appreciate in environments of monetary expansion.

But it has significant limitations as a pure store of value.

Real estate is illiquid — selling a property takes months. It’s indivisible — you can’t sell 10% of a house when you need partial liquidity. It requires maintenance, insurance, and management. It’s subject to property taxes, zoning changes, and local government decisions. And it’s distinctly unfair to new entrants — young people trying to buy property in major cities find themselves priced out by a combination of monetary inflation and asset price appreciation.

Bitcoin offers something different: a store of value that is perfectly liquid (sell any amount in minutes), perfectly divisible (down to a sat), requires no maintenance, has no property tax, and is equally accessible to someone with $10 as to someone with $10 million.

The thesis isn’t that Bitcoin replaces real estate. People need somewhere to live, and property has genuine utility. The thesis is that a portion of wealth currently stored in real estate for lack of better alternatives might find Bitcoin more efficient for the pure store-of-value function.

Tomorrow: the Lindy Effect — why Bitcoin’s age makes it stronger.

— The Daily Bit