A several-unit apartment building in Brooklyn, completely new York, may represent the first foray into a completely new investment design of which uses the technology underpinning cryptocurrency as well as allows investors to buy as well as sell their shares in an individual property at the click of a button.
The design relies on blockchain technology, which underlies cryptocurrencies such as bitcoin as well as ethereum. The project sets out to show how buying as well as selling an asset on the blockchain can help distribute wealth as well as improve transaction speed as well as data transparency.
Beginning next month, accredited investors will be able to buy shares of the three-story Brooklyn building inside the form of tokens of which are bought as well as sold using a website built on the ethereum blockchain.
Investors would certainly reap a proportionate amount of rental income through their shares as well as be able to buy as well as sell the shares with different investors. If the building increases in value, so would certainly those shares, said Brooklyn-based blockchain developer ConsenSys, which built the technology to “tokenize” the property. The project is actually called Pangea.
Each token represents one share as well as can cost as little as a few dollars, though the exact cost has yet to be determined. An accredited investor has to meet certain income as well as net worth standards, however, such as having $1 million in net worth or an annual salary of $250,000 For 2 years.
The project is actually a chance for people to acquire slivers of real estate rather than having to buy a property outright or invest in a pool of properties such as a real estate investment trust, said Pangea co-founder Mohammad Shaikh.
“By purchasing these tokens, investors no longer have to tie up large sums of money in single properties, nor are they restricted to REITs with little transparency, or funds with high fees,” he said.
The Brooklyn apartment building will be the first known property to offer fractional ownership through digital tokens, though several start-ups are working on the cause, Shaikh said. The design is actually likened to an individual-property REIT.
Cayuga Capital Management, a Brooklyn real estate developer, owns the building, located inside the Bushwick neighborhood.