Businessman Peter McGowan has purchased a two bedroom flat in Glasgow for 10 million Scotcoins or £60,000.
He bought the flat from his friend and business colleague David Low, who owns Scotcoin’s intellectual property. The pair first met more than 20 years ago when Low, the prime mover in Fergus McCann’s takeover of Celtic football club, fronted a Celtic roadshow in Corby.
“I was preaching the gospel according to Fergus,” Low said dryly. “It’s something than didn’t cost a lot of money. It’s a long-term punt,” he said.
“Peter wanted a flat and I wanted more Scotcoin,” Low said of the sale, “so we’re both happy.”
It may have been the first digital house sale but the transaction was still subject to normal conveyancing rules and procedures. “We commissioned a Home Report, which gave us the fair value of the flat in Sterling, which we translated into Scotcoin on the day of sale,” Low added.
“And because it’s not my principal home it’s subject to the Scottish Government’s Land Buildings and Transactions Tax,” said McGowan, “meaning that I will be paying three per cent( £1800) into their coffers.”
Cryptocurrency statistics are astonishing – if you had invested £2,000 in Bitcoin five years ago you would now be a millionaire. That same investment, as late as last December, would see you today with a return in excess of 500% on your money. The cryptocurrency, despite occasional blips and falls, hasn’t so much taken off as blasted into financial hyperspace, largely because more governments and financial institutions recognise it as a valid means of exchange.
At its simplest Bitcoin, is an encrypted digital currency, created and held electronically, that uses decentralised technology for secure payments and storing money anonymously that doesn’t require conventional banks. As there is no central bank, no one controls it.
Bitcoins aren’t printed like pounds or dollars and although Bitcoin is the main cryptocurrency on the market at present, there are hundreds of different; smaller ones, like Scotcoin, all benchmarked to the rise, or fall, of the main player.
“A rising tide floats all boats” is how Scotcoin director Willie Fleming puts it. The corollary is that a falling tide beaches or holes them.
Bitcoin was invented in 2008 by an unknown programmer, or group of programmers, called Satoshi Nakamoto. Various stabs have been made at identifying him. But what he, or they, did was to introduce the it worldwide using open-source software. It works peer-to-peer so that transactions take place directly between users with no intermediary.
The transactions are logged in a public ledger called a blockchain. The blockchain isn’t software per se, it’s decentralised information on every participant’s computer with dealings kept in electronic wallets – so hacking one location won’t, in theory at least, harm the entire network. However, individual computers and trading exchanges, can, and have been hacked.
Because trading isn’t overseen and payments and receipts can be performed anonymously it’s the perfect medium for drug dealers and criminal enterprises on the ‘dark web’, although reputable currencies and traders abide by the prevailing laws in the countries they operate in. For instance, you can’t buy more than £100 of Scotcoin in any one week without revealing your identity, to satisfy UK money laundering regulations.
DMZ thinks this is an interesting example of how encrypted digital currencies are on the rise and could represent how we buy houses, cars or even our next pizza in the future. Multi-million dollar apartments in New York have been bought using Bitcoin over the past 3 years, typically from buyers who wish to remain anonymous, concealing either the source of the quantity of their wealth.
Would you be comfortable selling a property in Bitcoin, or have you been involved in a cryptocurrency transaction in London? Let us know all about it.