GM 🌞
Leon
@leonwankum@BitcoinNostr.com
npub1v5k4...8rd9
Bitcoin. Real Estate. Philosophy & Ethics. Proof-of-Work. Newsletter: leonwankum.substack.com
As an actual (almost perfect) store of value, bitcoin has the potential to correct misallocation of capital in the real estate sector and force the industry to develop better products with higher market value.
Bitcoin and Real Estate:
“How bitcoin is revolutionizing the world's largest asset class.”
(@BTC Prague)
Bitcoin and Real Estate: How bitcoin is revolutionizing the world's largest asset class. 👇
I am thrilled by the positive feedback on my talk at @BTC Prague! 🌟 Find the slides in the thread below. A specialt hanks to @Imke Wedekind & Diarie (we'll get him on Nostr) who helped me build this presentation. Stay tuned for the video release. 🧵 1/19
(2/19) After learning about Bitcoin in University, I started working in the realestate industry, which allowed me to understand two things:
1. How broken our monetary system is
2. The potential of bitcoin as a superior store of value to real estate. 
(3/19) Today, real estate is the number one store of value. Depending on your view on fiat money and debt, up to ⅓ - ⅔ of the world's wealth is stored in real estate. What created #realestate’s role as the world's number store of value ? 
(4/19) This development coincided with the “Nixon shock” on August 15, 1971, when US President Richard Nixon announced that the US would end the convertibility of the dollar into gold at a fixed rate. This ushered in a new era of fiat-money, with no currency standard at all. Since then, monetary inflation rates have risen steadily. This has created the use of reale state as the most important inflation hedge (&SoV) in the market. 
(5/19) The role of #realestate as an inflation hedge becomes clear when we compare the growth rates of the monetary supply and #realestate prices since 1971.
M2 money supply, which broadly reflects the spectrum of funds available for saving, spending, and investment, has been growing exponentially, with a compound annual growth rate (CAGR) of approximately 6.8%. 
(6/19) When we examine the development of the average price of a #home sold in the US, we observe a very similar pattern: the average sales price of #houses has risen at a compound annual growth rate (CAGR) of 5.7%, closely tracking the increase in the money supply. 
(7/19) The same trend largely applies to commercial real estate, though its growth has not been as aggressive as that of residential properties, with a compound annual growth rate (CAGR) of around 4.4%. 
(8/19) Laying all three graphs on top of each other reveals that real estate prices closely track the growth of the money supply. As new currency enters the market, people invest to protect their buying power. Real estate, with its scarcity and attractive financing options, became the preferred investment. Banks create new money as credit for mortgages, channeling it into real estate and inflating its nominal value. Its rise largely mirrors the debasement of fiat currency, emphasizing real estate's role as a store of value and its substantial monetary premium. 
(9/19) In contrary to today, throughout history, the value of land and reale state has been largely tied to its utility—whether for agriculture, living, production, or generating rental income. This trend has spanned cultures and epochs for thousands of years. Historically, real estate symbolized prosperity, often linked to its agricultural productivity and the social status and political power that came with land ownership. The elite enhanced their estates to boost agricultural output and display their wealth. However, using real estate as a form of #money to store value is a relatively recent development. 
(10/19) Many #realestate professionals mistakenly think real estate is a solid investment due to its intrinsic value from utility or cash flow. But this is a flawed concept— value is ultimately subjective. 
(11/19) #CarlMenger, a pioneer of the Austrian School of Economics and arguably an inspiration for the Cypherpunks' creation of #Bitcoin, demonstrated already in the 19th century that value is subjective. Consider a Rolex watch: its worth is not primarily a reflection of the materials or craftsmanship, but rather what someone is willing to pay for it. Similarly, real estate's high value often stems not from its utility but its use as a speculative inflation vehicle to preserve buying power against inflation. 
(12/19) Comparing real estate and bitcoin shows bitcoin's clear advantages as a store of value: limited supply, high liquidity, divisibility, and ease of movement—crucial in a world with increasing conflicts. In contrast, real estate, or 'Immobile' in German (meaning immobile), creates local dependencies and is vulnerable to taxes, confiscation, or destruction. While #realestate generates cash flow, often used to service debt, it does not necessarily prove its reliability as a store of value. Instead, its rising nominal value is more a reflection of the debasement of fiat currency. Banks profit greatly by creating money, lending it, and charging interest. 
(13/19) In 2016, the average US home cost about 1000 bitcoin; now, it's just 10. Real estate is losing value fast compared to bitcoin. To stay competitive in real estate or any field, consider changing your unit of account to bitcoin—it's repricing the world. Like many Bitcoiners, I assess #realestate based on its utility value, and it's likely the market will soon align with this perspective. 
(14/19) Bitcoin, a near-perfect digital store of value, is disrupting the real estate sector, traditionally valued for its role as a store of value. By introducing digital scarcity, Bitcoin mirrors the disruptive impact of e-commerce on retail in 1995. Both real estate and bitcoin capitalize on scarcity, but bitcoin extends this concept into the digital realm, enabling exponential growth similar to how email surpassed postal services. Its digital nature allows for faster scaling and increased efficiency. Bitcoin preserves value like real estate but without its drawbacks and liabilities, positioning it as the superior store of value for the digital age. 
(15/19) The role of real estate as a trusted store of value and inflation hedge is slowly diminishing. Digital disruption by bitcoin is reshaping the investment landscape, as people can now default to saving in bitcoin rather than having to invest in real estate, which will push property values down to their utility value. Additionally, higher interest rates and surging construction costs have made real estate development and ownership increasingly unprofitable. Coupled with rising maintenance costs due to ESG requirements and the financial exclusion of younger generations like Millennials, Gen Z, and Gen Alpha, the real estate market is facing profound structural challenges. As digital natives, these generations are more likely to gravitate towards bitcoin as their preferred (digital) store of value, further destabilizing traditional real estate investments. 
(16/19) What happens as bitcoin absorbs the monetary premium from real estate? Housing becomes more affordable, benefiting individuals and families with access to reasonably priced living spaces. But this poses a challenge: How will developers survive?
While using real estate as a speculative investment has its drawbacks, the role of the private sector in constructing housing remains important. 
(17/19) Real estate investors face a dual challenge from rising interest rates: debts inflate, bloating the liability side of their balance sheet, while higher borrowing costs reduce affordability, depress property values, and shrink the asset side, compounding their financial strain and the challenges in the real estate market. 
(18/19) If you're a real estate investors, you can bring bitcoin onto the asset side of your balance sheet to hedge against the shift of the monetary premium from real estate to bitcoin, and create a more resilient business structure. Bitcoin is not just disrupting the real estate sector; it represents a significant business opportunity. IMO, it's not about choosing one asset over the other, but using both strategically in proper sequence to build wealth and a resilient portfolio over time. Even on a Bitcoin standard, the utility value of housing remains vital—people still need places to live and conduct business, making real estate a crucial service to the market that generates rental income. 
(19/19) Explore these effective bitcoin strategies I've developed to enhance #realestate investment:
Maintenance Reserves: Safeguard cash flow by potentially taking/converting rent in BTC.
Buy to Hedge: Diversify by converting real estate profits into bitcoin.
Refinance: As speculation shifts from real estate to bitcoin, secure your profits and future by refinancing to buy bitcoin. Note: Be cautious of high interest rates.
Utilize Bitcoin: Bitcoin is pristine collateral for lending and the accumulation of bitcoin, for example through rental income or through the sale of real estate to buy bitcoin, provides a company with a new novel capital base to finance operations or further investments.
Incorporate Bitcoin in Financing: Boost creditworthiness and hedge against defaults by using #bitcoin as collateral in #realestate development.
Managing bitcoin custody properly is crucial—consider multisignature setups or multi-custodial solutions to ensure security ('not your keys, not your coins'). 
I would like to thank you for your attention and @BTC Prague for the invitation. What a great event! Well done. My publications on Bitcoin and Real estate can be found in my bio.
(2/19) After learning about Bitcoin in University, I started working in the realestate industry, which allowed me to understand two things:
1. How broken our monetary system is
2. The potential of bitcoin as a superior store of value to real estate.
(3/19) Today, real estate is the number one store of value. Depending on your view on fiat money and debt, up to ⅓ - ⅔ of the world's wealth is stored in real estate. What created #realestate’s role as the world's number store of value ?
(4/19) This development coincided with the “Nixon shock” on August 15, 1971, when US President Richard Nixon announced that the US would end the convertibility of the dollar into gold at a fixed rate. This ushered in a new era of fiat-money, with no currency standard at all. Since then, monetary inflation rates have risen steadily. This has created the use of reale state as the most important inflation hedge (&SoV) in the market.
(5/19) The role of #realestate as an inflation hedge becomes clear when we compare the growth rates of the monetary supply and #realestate prices since 1971.
M2 money supply, which broadly reflects the spectrum of funds available for saving, spending, and investment, has been growing exponentially, with a compound annual growth rate (CAGR) of approximately 6.8%.
(6/19) When we examine the development of the average price of a #home sold in the US, we observe a very similar pattern: the average sales price of #houses has risen at a compound annual growth rate (CAGR) of 5.7%, closely tracking the increase in the money supply.
(7/19) The same trend largely applies to commercial real estate, though its growth has not been as aggressive as that of residential properties, with a compound annual growth rate (CAGR) of around 4.4%.
(8/19) Laying all three graphs on top of each other reveals that real estate prices closely track the growth of the money supply. As new currency enters the market, people invest to protect their buying power. Real estate, with its scarcity and attractive financing options, became the preferred investment. Banks create new money as credit for mortgages, channeling it into real estate and inflating its nominal value. Its rise largely mirrors the debasement of fiat currency, emphasizing real estate's role as a store of value and its substantial monetary premium.
(9/19) In contrary to today, throughout history, the value of land and reale state has been largely tied to its utility—whether for agriculture, living, production, or generating rental income. This trend has spanned cultures and epochs for thousands of years. Historically, real estate symbolized prosperity, often linked to its agricultural productivity and the social status and political power that came with land ownership. The elite enhanced their estates to boost agricultural output and display their wealth. However, using real estate as a form of #money to store value is a relatively recent development.
(10/19) Many #realestate professionals mistakenly think real estate is a solid investment due to its intrinsic value from utility or cash flow. But this is a flawed concept— value is ultimately subjective.
(11/19) #CarlMenger, a pioneer of the Austrian School of Economics and arguably an inspiration for the Cypherpunks' creation of #Bitcoin, demonstrated already in the 19th century that value is subjective. Consider a Rolex watch: its worth is not primarily a reflection of the materials or craftsmanship, but rather what someone is willing to pay for it. Similarly, real estate's high value often stems not from its utility but its use as a speculative inflation vehicle to preserve buying power against inflation.
(12/19) Comparing real estate and bitcoin shows bitcoin's clear advantages as a store of value: limited supply, high liquidity, divisibility, and ease of movement—crucial in a world with increasing conflicts. In contrast, real estate, or 'Immobile' in German (meaning immobile), creates local dependencies and is vulnerable to taxes, confiscation, or destruction. While #realestate generates cash flow, often used to service debt, it does not necessarily prove its reliability as a store of value. Instead, its rising nominal value is more a reflection of the debasement of fiat currency. Banks profit greatly by creating money, lending it, and charging interest.
(13/19) In 2016, the average US home cost about 1000 bitcoin; now, it's just 10. Real estate is losing value fast compared to bitcoin. To stay competitive in real estate or any field, consider changing your unit of account to bitcoin—it's repricing the world. Like many Bitcoiners, I assess #realestate based on its utility value, and it's likely the market will soon align with this perspective.
(14/19) Bitcoin, a near-perfect digital store of value, is disrupting the real estate sector, traditionally valued for its role as a store of value. By introducing digital scarcity, Bitcoin mirrors the disruptive impact of e-commerce on retail in 1995. Both real estate and bitcoin capitalize on scarcity, but bitcoin extends this concept into the digital realm, enabling exponential growth similar to how email surpassed postal services. Its digital nature allows for faster scaling and increased efficiency. Bitcoin preserves value like real estate but without its drawbacks and liabilities, positioning it as the superior store of value for the digital age.
(15/19) The role of real estate as a trusted store of value and inflation hedge is slowly diminishing. Digital disruption by bitcoin is reshaping the investment landscape, as people can now default to saving in bitcoin rather than having to invest in real estate, which will push property values down to their utility value. Additionally, higher interest rates and surging construction costs have made real estate development and ownership increasingly unprofitable. Coupled with rising maintenance costs due to ESG requirements and the financial exclusion of younger generations like Millennials, Gen Z, and Gen Alpha, the real estate market is facing profound structural challenges. As digital natives, these generations are more likely to gravitate towards bitcoin as their preferred (digital) store of value, further destabilizing traditional real estate investments.
(16/19) What happens as bitcoin absorbs the monetary premium from real estate? Housing becomes more affordable, benefiting individuals and families with access to reasonably priced living spaces. But this poses a challenge: How will developers survive?
While using real estate as a speculative investment has its drawbacks, the role of the private sector in constructing housing remains important.
(17/19) Real estate investors face a dual challenge from rising interest rates: debts inflate, bloating the liability side of their balance sheet, while higher borrowing costs reduce affordability, depress property values, and shrink the asset side, compounding their financial strain and the challenges in the real estate market.
(18/19) If you're a real estate investors, you can bring bitcoin onto the asset side of your balance sheet to hedge against the shift of the monetary premium from real estate to bitcoin, and create a more resilient business structure. Bitcoin is not just disrupting the real estate sector; it represents a significant business opportunity. IMO, it's not about choosing one asset over the other, but using both strategically in proper sequence to build wealth and a resilient portfolio over time. Even on a Bitcoin standard, the utility value of housing remains vital—people still need places to live and conduct business, making real estate a crucial service to the market that generates rental income.
(19/19) Explore these effective bitcoin strategies I've developed to enhance #realestate investment:
Maintenance Reserves: Safeguard cash flow by potentially taking/converting rent in BTC.
Buy to Hedge: Diversify by converting real estate profits into bitcoin.
Refinance: As speculation shifts from real estate to bitcoin, secure your profits and future by refinancing to buy bitcoin. Note: Be cautious of high interest rates.
Utilize Bitcoin: Bitcoin is pristine collateral for lending and the accumulation of bitcoin, for example through rental income or through the sale of real estate to buy bitcoin, provides a company with a new novel capital base to finance operations or further investments.
Incorporate Bitcoin in Financing: Boost creditworthiness and hedge against defaults by using #bitcoin as collateral in #realestate development.
Managing bitcoin custody properly is crucial—consider multisignature setups or multi-custodial solutions to ensure security ('not your keys, not your coins').
I would like to thank you for your attention and @BTC Prague for the invitation. What a great event! Well done. My publications on Bitcoin and Real estate can be found in my bio.
I was thrilled to hear the positive feedback on my talk on Bitcoin & Real Estate at @BTC Prague. 🌟 I will post the video as soon as it comes out. Thanks to everyone for coming and especially to my friends who helped me put together the presentation. I will post the slides later today too.
Bitcoin has taught me to respect other people's time because it has allowed me to value my own time.
The 21st edition of The Bitcoin Newsletter “The Need To Protect Individual Freedom” is out. Link in bio. 🧡
https://leonawankum.substack.com/p/the-need-to-protect-individual-freedom
“Thinking is difficult. That's why most people judge” — Carl Jung
Most interesting ‚thing‘ I watched in a while. Opinions ?
„The difference between those who fail and those who succeed is their courage to act repeatedly“— @Carl B Menger
Joy of Compounding
Episode XVI. Block height: 844000. Everything, in time. Compounding is key because human time is scarce.
Thank you to everyone reading and supporting my work. The upcoming newsletter will provide an in-depth exploration of why Bitcoin and individual freedom matter.
Look for it at the end of this month!
https://leonawankum.substack.com/
🌘
Great event at the Bitcoin Commons on Bitcoin & building culture.
#BitcoinUrbanism #realestate #housing 
The digital disruption Bitcoin embodies to the real estate industry can be likened to the advent of email. Just as email and other internet-based messaging services revolutionized communication by becoming the primary means of sending messages, bitcoin holds the potential to transform the way we store and send value.
It is conceivable that bitcoin could assume the role currently held by real estate as the foremost method of wealth preservation.
This potential shift in the paradigm of value storage and transfer is reminiscent of how email and digital messaging have largely replaced traditional postal services, underscoring the profound impact of technological advancements on societal norms.
#bitcoin #realestate
Bitcoin is the mental exit from the system.
It is not an inflation hedge it is a paradigm shift.
As Bitcoin makes its way into traditional financial markets, we can expect that its issuance plan will become increasingly important to financial markets and central bank's decision less important.
It has become the basis of my work and my life. When making economic decisions, I no longer base them on interest rates from central banks or government decrees, but rather on the supply plan of Bitcoin.
@gsovereignty when are you on at Bitcoin Atlantis ? 🙏
A beautiful day for ice diving today. 🥶
Whenever I see a trad-fi fund touting their annual returns of 8%, 10%, 25%, etc., I think to myself: I have outdone you all by doing literally nothing. #HODL
The nature of Bitcoin as a digital asset makes it impossible to fit 1:1 into the framework of property as we know it. One can possess Bitcoin, but not truly own it in the conventional sense.
Bitcoin is not about ownership, but about cryptographic control.
Here is my take on the subject via @Bitcoin Magazine.
Bitcoin Magazine
Bitcoin Is A Possession, Not Property
The nature of Bitcoin as a digital asset makes it impossible to fit 1:1 into the framework of property as we know it. One can possess Bitcoin, but ...
Bitcoin is primarily seen as an alternative to gold ($10-12 T) due to its limited supply and excellent monetary properties.
In fact, however, bitcoin is a competitor to the world's most used store of value, real estate ($330 T).
In the global financial landscape, gold has seen a shift from its traditional role as the primary store of value. Since 1971, this pivotal role has transitioned to real estate, characterized by its potent mix of scarcity and appealing financing opportunities, establishing it globally as the primary store of value.
The total value of global real estate has exceeded $330 trillion. In comparison, the value of all gold ever mined, estimated at $12.2 trillion, appears modest, accounting for just over 3% of global real estate value.
This development coincides with the “Nixxon shock” of August 15, 1971. When US President Richard Nixxon announced that the United States would end the convertibility of the US dollar into gold.
Since the adoption of a fiat-based monetary system globally, with floating exchange rates and no currency standards, the money supply has steadily increased. This has driven investors to seek protection against inflation, with real estate emerging as a favored asset.
Examining the annual growth rates of the money supply (M2) and housing prices in the U.S. reveals a discernible trend. Since 1971, the money supply (M2) had a compound annual growth rate of 6.9%, while housing prices had a compound annual growth rate of 5.7%.
This illustrates a direct correlation between monetary expansion and rising real estate prices, underscoring real estate's longstanding role as a preferred store of value for safeguarding wealth against inflationary pressures. However, this characteristic is increasingly challenged by the emergence of Bitcoin.
If you think about it, #bitcoin's characteristics reflect many of the value propositions of #realestate, in addition to inherently safer custody, easier maintenance, and, most importantly, the ability to liquidate or move your wealth in times of crisis.
Real estate cannot compete with bitcoin as a store of value. Bitcoin is rarer, cheaper to maintain, more liquid, easier to move and harder to confiscate, tax or destroy.
Given bitcoin’s vastly superior properties as a SoV, it has the potential to absorb a significant portion of the monetary premium that real estate carries as such.
If 1% of global real estate equity was reallocated to bitcoin it could drive the price to $18 million +/bitcoin. The math: $330 trillion market cap global RE x 1% = $3.3 trillion. $3.3 trillion x 118 Bank of America study multiplier = $390 trillion. Current #Bitcoin market cap = $1 trillion. Total hypothetical bitcoin supply = 21 million. 391 trillion / 21 million = $18 million per bitcoin. The price would probably be even higher as many coins were lost...
We can see in real time how the market recognizes the advantages of bitcoin over real estate for storing value. Swiss Bitcoin exchange Relai has reported that 75% of its OTC volumed came from real estate investors diversifying profits into bitcoin.
I expect this trend to continue, particularly in the current market environment. With bitcoin's price presenting an appealing prospect against its anticipated long-term growth, while real estate is facing challenges due to rising interest rates and lower demand, which encourages investors to look into Bitcoin.
Bitcoin Magazine
Why Bitcoin Is Digital Real Estate
The properties of bitcoin reflect many of real estate’s value offers on top of fundamentally more secure custody.