Bitcoins have been around for a few years with little known about how they worked or how they could be used.
The confusion, combined with the secretive nature of who developed crypto, did not draw much interest. It was only in recent years that cryptocurrency has started to get some mainstream acceptance, especially when values started to skyrocket. Similar cryptocurrencies to Bitcoin like Dogecoin have been a popular topic with entrepreneurs like Elon Musk. Cryptocurrencies have even been featured as part of a Saturday Night Live skit.
Once viewed as a futuristic form of payment for only those willing to take a risk on its volatile value, some retailers, banks, and investment firms are accepting it as a viable form of payment. Now, other industries are beginning to consider how they might accept this new form of currency as an acceptable payment. That includes HOAs and the community management industry. Here is an overview of what Bitcoin is and how cryptocurrency is likely to become a bigger part of the HOA structure.
Understanding Bitcoin
Bitcoin is one type of cryptocurrency. There are many types of this digital currency, but Bitcoin is the oldest and most well-known. As an instant payment and unregulated method for all types of transactions, Bitcoin can be exchanged for other currencies, such as dollars and Euros, which is another reason it may be set to replace plastic and paper payment methods.
This cryptocurrency uses complex algorithms to keep it secure so that users can feel confident about storing it in the cloud or on their computer. Thanks to the science behind it, the source code for cryptocurrency is considered to be nearly impossible to hack. Although each cryptocurrency transaction is recorded in a register known as a blockchain, those involved in the transactions can remain anonymous.
More Than an Investment Tool
Most of the news coverage on Bitcoin has been about the roller-coaster trading values associated with investing it. Beyond using it on online shopping sites, Bitcoin is becoming an accepted currency for real estate transactions, including purchases, rent payments, and even maintenance and assessment (HOA) payments.
In entering this new market of opportunity, other benefits of Bitcoin come to light compared to other payment forms. Traditional payment methods like credit and debit cards as well as checks and e-checks take time to process and often come with costs, especially if payment fails due to non-sufficient funds. There are often processing charges that the management company has to pay associated with HOA payments.
Also, payments can be sent from anywhere, which can ensure timely arrival of funds even when a tenant or homeowner is not present in their community to make the HOA payment. The processing time for a Bitcoin payment can be literally seconds versus days.
Other Crypto Applications for HOAs
The technology behind cryptocurrency known as blockchain is being used for other HOA applications. For example, it can be used to secure and verify HOA documentation authenticity. Forms can be securely submitted and verified electronically, also saving time and money. The same technology can also track and monitor delinquent HOA accounts.
Barriers to Adoption
Despite the benefits and wider adoption, there is still hesitation about using this “new” digital currency and document application. Pricing fluctuation and security seem to be the biggest concerns. However, both of these concerns can be addressed by exchanging Bitcoin for cash for a small fee and the ongoing tests that indicate that crypto is highly secure.
Improve Your HOA Assessment Collection Process
For community management companies everywhere, it is important to continually assess how new technology and developing digital solutions can assist with goals to provide a value-focused service experience for those in HOA communities. At the same time, you can enjoy greater cost efficiencies by reducing time-consuming tasks and the risk of payment processing fees.
For the past ten years, Bitcoin and the technology behind it, blockchain, have been proving worthwhile for many industries. As both have become refined, it’s clear that they are here to stay. Now may be the right time to address their value for the communities you manage.
