Rental listing site RentHop thinks it can entice landlords and real estate brokers into using Bitcoin by slashing its listing advertisement fee if they pay with the digital currency.
Users must currently pay $2 to post listings on RentHop, which covers New York City, Boston and Chicago, and has plans to expand nationally.
But as of this week, if brokers and landlords use Bitcoin, they’ll have to pay only 0.833 milli-citcoin (1/1000th of a bitcoin), or $0.76 at today’s exchange rates. That represents a 60 percent discount off the rate that RentHop will continue to charge advertisers who pay in dollars.
“RentHop has always catered to early adopters exploring innovations in real estate,” said RentHop CEO Lee Lin in a statement. “Over the years we’ve noticed the most successful landlords are the ones who proactively seek out and embrace new and disruptive platforms. Bitcoin users are exactly the type of participant we welcome to our marketplace.”
RentHop intends to reduce the exchange-rate volatility of owning Bitcoin for customers by maintaing the exact number in bitcoins that it charges unless Bitcoin’s dollar value changes by more than 30 percent.
Lawrence Zhou, co-founder of RentHop, breaks it down for us:
“Most places fix the value of their items in dollars. For example, if something costs $100, and Bitcoin is valued at $1000/Bitcoin, then they would set the cost at 0.1 bitcoins,” he said. “But if Bitcoins went down in value — say to $800 per coin, then the cost would be 0.125 bitcoins.”
“We’re not going to do that. We plan to keep the price at 0.05 coins (as long as BTC [Bitcoin] is around $500 to $1,000) (i.e., around within 30 percent of the current price). This preserves the purchasing power of anyone with Bitcoins so that their cost in BTC doesn’t fluctuate.”
But that may not offer as much protection as you might think. Bitcoin’s value is known to fluctuate wildly. The Independent recently noted that Bitcoin’s value had quadrupled in a month in a story that summarized comments from a European banking watchdog warning against Bitcoin’s volatility.
But despite Bitcoin’s erratic record, companies like RentHop are increasingly accepting Bitcoin as the electronic cash gains broader acceptance among the government and consumers.
A federal judge ruled in August that Bitcoin “is a currency or form of money,” and during congressional hearings in November, lawmakers and regulators seemed sympathetic to arguments that the government needs to be careful to avoid hampering the digital currency’s growth.
Venture capital firm Andressen Horowitz recently made the largest bet yet on the digital currency, investing $25 million in Coinbase, a firm that helps consumers and merchants use Bitcoin, Wired reported.
Property management software provider Rentalutions said it would be the first real estate company to embrace the electronic currency when it announced plans to accept Bitcoin from tenants who use Rentalutions to pay their rent.
Beyond pleasing tech-minded customers, companies see other advantages to using Bitcoin. RentHop said using Bitcoin helps it avoid “significant processing fees” associated with credit card payments as well as “chargebacks with almost no recourse.”