Superyachts: everything you need to know about cryptocurrency
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Cryptocurrencies first appeared over a decade ago when Bitcoin entered the fray in 2009 on the heels of the global economic recession. Since then crypto markets have boomed, with thousands of online transactions taking place across the globe, including the first ever superyacht sale in 2016, paving the way for an increasing number of yacht sales and charters executed using these types of digitally encrypted funds.
In a nutshell, they are non-tangible assets in the form of digital currency – denominated in terms of virtual tokens – which allows users to send and receive funds without the need for a central bank.
Instead, these online transactions are recorded using a public ledger known as a blockchain – basically a record of all crypto transactions – and the currencies are stored in digital wallets. This system of de-centralised payments uses cryptography (encryption) to verify and secure payments, making it nigh on impossible to counterfeit or double-spend.
The first ever yacht sale using cryptocurrency was announced in 2016, with a number of high-profile yacht transactions completed since then. June 2018 saw the first ever Bitcoin-booked charter.
A number of brokerage firms now offer digital transactions as part of their service where you can pay for your yacht purchase or charter in Bitcoin or other established cryptocurrency, such as Ethereum or Ripple.
Also marking a world first, Owner's of the Benetti superyacht VIANNE recently announced that they will now accept NFTs (Non-Fungible Tokens) for the yacht's charter or sale.
Widely known to be used for purchasing digital creations such as music, videos clips and art, NFTs are non-interchangeable units of data that are stored on a blockchain, in a similar way to cryptocurrencies.
The main differences to crypto are their lack of interchangeability, as well as their limited supply making their value potentially far greater.
For anyone wishing to buy or sell a yacht, the major drawcard for using cryptocurrency is privacy as there are no document ID procedures required, proving a massive incentive for those wishing to remain anonymous when transferring the kind of eye-watering sums that exchange hands within the superyacht industry.
That said, some UHNWIs are still wary and keen for reassurance this type of currency is safe to use. Bob Denison, President of Denison Yachting asserts that “many clients prefer the ease of use and privacy that paying with Bitcoin, or any other cryptocurrency, provides. The blockchain network makes payments untraceable, which is an advantage to those who want to keep their travel expenditures private.”
In addition, by circumnavigating third-parties that are usually required to verify the transactions, users can pay for goods and services immediately.
The process can be broken down into 3 easy steps;
- Set up an account – which only takes a matter of minutes – and fund it with your own money.
- Purchase your preferred cryptocurrency – Bitcoin, Ethereum and Ripple are currently the most widely used. Note this is similar to using foreign currencies based on exchange rates. Most crypto exchanges allow users to purchase crypto using government-issued currencies such as US Dollars, pounds or Euros. Due to its popularity, cryptocurrencies are enjoying incredibly strong exchange rates, meaning you could actually be paying significantly less for your yacht purchase or charter.
- Store your purchased cryptocurrency in a digital wallet – this is to secure it against hacks or thefts. Some exchanges provide wallet services making it easy for you to store directly through the platform. It’s worth doing some homework beforehand to find the best service suitable for your needs.
Once you have your cryptocurrency safely tucked away in its digital wallet, the funds are available to spend as and when you wish.
The blockchain network makes payments untraceable, which is an advantage to those who want to keep their travel expenditures private.
Although the peer-to-peer payment system helps superyacht end-users avoid high processing fees levied by the banks and credit card companies, it still requires for both the seller and the buyer to conduct the transfer in cryptocurrency.
To get around this, buyers can convert their digital asset using a crypto exchange such as Kraken, with a small number of broker companies accepting Bitcoin directly.
As with all currency exchanges, cryptocurrencies can fluctuate, which may explain why superyacht users have been wary of using digital currencies to date. That said, cryptocurrencies like Bitcoin have enjoyed sustained growth in the last few years, which has undoubtedly led to greater numbers of sales and purchases using these types of digital funds.
With the ultra-high privacy angle, low transaction fees and rapid transfer times it is clear to see why cryptocurrencies are fast becoming the popular choice for anyone wishing to buy or sell a superyacht while remaining anonymous.
In terms of chartering, the speed of payment, plus the freedom to spend their money how they wish without involving third parties and complex paperwork is a big plus.
You could conceivably pay for a last-minute charter the night before and be stepping on board the yacht the following morning. What's not to love about that?
Please note this article is for guidance only. Therefore, if you would like to learn more about using cryptocurrencies for sale or charter, please speak with your preferred yacht broker direct or more information.
In the meantime, feel free to browse our comprehensive fleet of superyachts available for charter.
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