The Collective x Bitcoin

The Collective recently announced that we’ll take rental deposits in Bitcoin and in the near future look to accept monthly rental payments across a range of cryptocurrencies. As Bitcoin performance continues to surpass all expectations and makes headlines around the world, people often ask us the same question; why?

Why accept Bitcoin?

Unlike most property start-ups, The Collective has an in-house technology team who share a passion for blockchain technology and its applications within the real estate sector. Whilst we’re advocates for the future use-cases (reducing middlemen, investment, fraud protection), we also wanted to find a way to dip our toes and experiment with the technology right now.

Real life applications for crypto are currently pretty limited, especially when it comes to lifestyle fundamentals such as paying your rent. If Bitcoin is to go on to establish itself as a valid real-world currency and not a niche speculative store of wealth, this needs to change.

We really want to support this change and witness the proliferation of blockchain tech throughout our industry. We also felt Bitcoin payments would be an interesting experiment… how popular would it prove as a payment method? Is it possible to manage efficiently in the back-office? Most importantly: did it provide a superior customer experience to those booking a room?

Finally, as The Collective continues to expand globally, enabling Bitcoin may allow us to provide members with a truly global payment method should they choose to live and work transiently across our international locations.

How does it work?

Today, we accept BTC (Bitcoin) payments against our £500 tenancy deposits (money used to secure against damages.) Our members pay this at the point of booking using an integrated service (BitPay) which spot converts the incoming BTC into £ Sterling, which is then transferred and held in a government assured tenancy deposit protection scheme.

When the resident moves out, these funds are then converted back to BTC and returned to them at the current market rate. It would be very tricky to use this as a method of money laundering, but just to be sure we also do full KYC checks on each prospective tenant.

We are likely to take a similar spot conversion approach with our rental payments in the future to avoid unnecessary exposure to the current volatility of the cryptocurrency markets.

How popular has it been?

So far, no one has paid their deposit using Bitcoin, although we have had a lot of interest and enquiries.

Are we disappointed? A little. The amount of buzz we’ve generated against actual consumer demand is very telling of the state of today’s cryptocurrency market.

The most telling time will be next summer when, as is true of the wider London property rental market, we see a spike in the number of new members signing up to live and work in our spaces. By then, we’ll have deepened the integration and will hopefully witness our first successful BTC payment.

The Future

The future for us means continuing to explore ways of leveraging nascent technology as part of our product. Investing in research and development is a vital part of our digital strategy. Some examples of this are our proprietary property management system, a tool we’ve developed to manage our site acquisition workflow and, most exciting of all, our resident mobile app that will change the way people experience and connect with our spaces.

We’re also actively investigating how the ICO market can be used to disrupt the (horribly expensive and laborious) process of capital raising for our future co-living schemes. We’ve had fun exploring several exciting ideas for how to use crowdfunding to provide non-securitised value to future token holders. We’re hoping that the market continues to mature and legitimise so we can provide our members, both current and future, with a new way to be part of our co-living story.

The Collective design, build and operate innovate ways of living in cities. We’re at the forefront of the co-living movement with schemes operating and in development all across the globe.