Not Just for Hackers: In First Real Bitcoin Property Purchase in Israel, 6 Coins Buys a Car

Bitcoins were trading at just over 9,000 shekels ($2,500) per bitcoin on Wednesday

A Bitcoin (virtual currency) coin is seen in an illustration picture taken at La Maison du Bitcoin in Paris, France, June 23, 2017.
BENOIT TESSIER/REUTERS

A real property transaction has been made in bitcoins in Israel for the first time. The buyer, a private citizen, purchased a Skoda Rapid sedan from 2014 for six bitcoins, worth about $15,000 at the time of the deal. The seller was the Green Car dealership in Rishon Letzion, south of Tel Aviv. 

Both sides of the sale were conducted through the Israeli Bit2c online trading exchange. Bitcoins were trading at just over 9,000 shekels ($2,500) per bitcoin on Wednesday. 

The virtual currency, invented in 2008 by an unknown person using the pseudonym of Satoshi Nakamoto,  has quickly shed its less shady roots among hackers, money launderers and other less than respectable types, and has become an acceptable form of payment throughout much of the world – even if it does not have the status of legal tender. 

Bitcoin is just an obligation between users, private individuals or businesses, says an Israeli in the business. No central bank or government is involved and no one guarantees the currency. Nonetheless, it is still possible to pay with bitcoins for goods. For example, 260,000 stores in Japan accept payment in Bitcoin, he added. 

To manufacture the 200 shekel bill you have in your wallet costs 5 shekels, says Haim Buchris, one of the owners of Green Car. But we agree it is worth 200 shekels. So the value of the bill is disconnected from the cost of the materials. In the 1970s it was decided to end the link between the dollar and gold, he added. 

In practice, Buchris says they had to use an exchange and change the bitcoins into shekels because they are unable to pay taxes in bitcoins and the receipt has to be issued in shekels. "We have been advertising for quite a while that we are willing to make deals in bitcoin, and this was the first sale," he said.

This does not mean that Bitcoin does not still face many problems, such as excessively high price volatility and misuse by hackers and others, as in the case of two recent major cyberattacks. But hackers use the virtual currency because of its advantages too: Bitcoins can be transferred instantly, they are not under the supervision of central banks and are anonymous.