They’re Not Making Land Anymore. Bitcoin Is Scarcer | Leon Wankum, Author, Digital Real Estate

What we talked about.

In this episode of the Sunny Ray Show, Sunny Ray talks with Leon Wankum of OneVest, author of Digital Real Estate, about why Bitcoin may be a scarcer asset than land. Wankum describes growing up in real estate development, studying financial economics at Glasgow, and writing a Bitcoin thesis in 2015 that professors first doubted. He traces his distrust of fiat money to his German family history of hyperinflation, and explains how Michael Saylor's phrase and an article calling Bitcoin land shaped his thinking. The conversation covers why regulation makes land less scarce than Bitcoin, how real estate operators can acquire Bitcoin through cash flow and refinancing, and why Bitcoin on a developer's balance sheet can hedge rising interest rates. Wankum also discusses a talk to about a thousand investors in Toronto, his stage appearance with Grant Cardone, how house prices look different in dollar and Bitcoin terms, and his view that real estate firms may become Bitcoin companies within 20 years. He closes by explaining where to find his book and newsletter.

Leon Wankum argues Bitcoin is digital land, scarcer than the real thing, and real estate developers should start stacking it now.

The questions, and the answers.

What did growing up in real estate development teach you about money?

It taught me to appreciate scarce goods. Money loses value, so you put it into something scarce like land. The line attributed to Mark Twain, that they're not making any more of it, works for Bitcoin too. They're making more, but less and less. That supply shock resembles how land appreciates against debased fiat currency.

Why does Bitcoin beat the line that they're not making any more land?

Bitcoin is absolute digital scarcity, and nothing we know of is scarcer apart from the human timeline. Land is only relatively scarce. Regulation is artificial and can change, which creates new building sites and grounds. So land is not absolutely scarce, but Bitcoin is.

How did the thousand real estate investors in Toronto react to your thesis?

I was shocked by how open they were. I explained how operators with large holdings they can't sell could use Bitcoin mining, maintenance reserves, refinancing, and tax-advantaged diversification to get Bitcoin. They received it with a lot of applause. I think North Americans tend to be more open, and the talk is on the Rockstar Real Estate channel.

Has Bitcoin sat behind the financing on a real project yet?

Not yet. We worked on a $10 million development deal where we wanted to add a million in Bitcoin, but we couldn't make it happen. Right now we buy Bitcoin with cash flow and refinancing proceeds. Lender acceptance will come last, because banks need to understand Bitcoin as collateral, and that will take time.

What happens to house prices and affordability if Bitcoin takes the store of value job?

Look at two angles. In dollar terms, house prices may keep rising as governments create more currency to service debt. In Bitcoin terms, housing is being repriced downward, and in 20 or 30 years a house might cost a fraction of a Bitcoin. Utility value stays, while the monetary premium gradually moves into Bitcoin.

What will a developer's balance sheet look like 20 years from now?

I think it must include Bitcoin to operate successfully. If you manage the transformation properly, a real estate company will be a Bitcoin company, and the real estate will be a gimmick. Like the German newspaper BILD, where the website now drives revenue and the paper is secondary. Houses will become design pieces and consumer goods.

What would change your mind about the thesis?

We can always be wrong, and Bitcoin can still fail, but I think that's very unlikely. Bitcoin is like the number zero, a mathematical probability we discovered, and it won't go away. It's a basic protocol on top of the internet. If Bitcoin fails, the internet would fail, and we'd have bigger problems.