¿What are cryptocurrencies and how can I use them?

The origin of cryptocurrencies began with the creation of Bitcoin in 2008 and since then countless cryptocurrencies have emerged that are native to different block chains or blockchains (for their translation into English). A blockchain is similar to a global registry of records or a distributed database where transactions are stored in data chains in chronological order and cannot be modified thanks to the protection provided by cryptography. The most important characteristic of blockchains is that it is a decentralized technology, that is, the information is stored in different nodes around the world without there being a centralized node such as the technology giants that today store millions of data and personal information of its millions of users such as Google, Amazon or Meta (Facebook and Instagram). Nor do they have a regulator such as a Central Bank such as the Bank of Mexico or the European Central Bank that regulates countries that have the euro as their common currency.

Types of cryptocurrencies

The most popular cryptocurrencies to carry out transactions are Bitcoin and Ether. Both live on their own blockchain and each one has different functionalities and objectives:

• Bitcoin is called the “digital gold”. The amount of total bitcoins that will be issued has been known since its foundation and it is estimated that by the year 2144 the 21 million coins will be mined (issued) (at the date of this publication there are around 19.2 million bitcoins in circulation). The fact that it is not possible to issue more currencies than those already established gives it the particularity of being considered a safeguard of value, unlike commonly used currencies such as the peso, euro or dollar that are issued by their central banks based on the economic situation of each of the countries where they circulate and consequently lose value year after year (inflation).
• Ethereum is an open source blockchain and its cryptocurrency is called Ether. This blockchain bases its functionality on smart contracts and has the quality that anyone can create applications and mount them on this platform. Thousands of applications have been created on Ethereum and today it is the most widely used to carry out transactions with more than a million daily operations.

¿How to buy a property in Mexico?

Although it is still uncommon, it is possible to buy a property in Mexico using cryptocurrencies (they can be Bitcoin, Ether or any other crypto asset) as long as the buyer and seller reach an agreement on the value of the property. In 2021, the first real estate transaction settled with Bitcoin in Mexico was publicly recorded and we will surely see more transactions of this type in the future.

Before purchasing a property with crypto assets, you must take into consideration all the legal and fiscal repercussions that a transaction of this nature could have due to the lack of regulation in some areas. It is also important to consider the volatility of this type of asset and the effects that said volatility could have for the buyer and seller once the negotiation is closed.

There is no doubt that the world is evolving at a rapid pace and that in the future we will see many more transactions in our daily lives executed through cryptocurrencies. The disruption of this type of technology will be comparable to what was experienced in the nineties with the creation of the internet. As humanity we are entering a new stage and there will surely be a change of paradigms with regard to the traditional financial system and many other areas of our existence.