|Photo courtesy of Krista Kim|
No one bid on the property so perhaps this isn’t your straight path to billions, but it shows there are some incredible applications of NFTs in the real world!
So how do you make money in real estate with NFTs?
First, you have to understand what an NFT is. NFTs, or Non-Fungible Tokens, are digital assets verified by blockchain technology. They can be anything from digital art or gifs to sports highlights and and yes, even contracts for real world houses and other assets. Each NFT is “minted” on the blockchain which provides proof of authenticity and ownership.
Now if you’re already in real estate, that makes sense because ownership is always important when it comes to land and property.
Growing up with games like Monopoly made us all dream of being real estate tycoons. Developing each piece of property, building house after house until finally you get the hotel that can house your top hat and provide space for your opponents to rent as they travel the board.
Just like in the game, the bank normally handles this process and determines who owns the property, and the buying/selling conditions. There are also the options of things like fractional ownership, for instance, owning an office space within the Empire State Building. Or even the purchasing of a condo within a building. NFTs remove the banks and simplify the entire process with embeddable contracts that use the blockchain to verify ownership.
One key to becoming the first cryptocurrency real estate tycoon is what is in those contracts.
If Homeowner A creates an NFT (perhaps a 3D scan or a gif of their home) and attaches the contract for ownership to the home, transferring the NFT to the new party Homeowner B. Homeowner A can also place a royalty deal into the contract that if Homeowner B ever sells the home again, Homeowner A receives a % of the sale. If Homeowner C sells, Homeowner A again receives a % of the sale. And all of this happens automatically through the transfer of cryptocurrency, through verification on the blockchain – pretty cool, right!
Now if you aren’t ready to buy an entire property, On a small scale, people will be able to quickly and easily sell their own property, without interference from banks and with all assortments of possibilities embedded into the home contracts. On a large scale, this means that investors can own parts of larger buildings as well. Imagine owning the pool at the Versace Mansion, or a hallway in the Louvre. Maybe one day people will be able to purchase a portion of the Chrysler building. NFTs will also allow you to buy part of a condo or iconic building, taking your investment opportunities to the next level without ever leaving your desk.
The options for NFTs in this capacity are limitless.
Real estate will always have a strong market. The ownership of land, property and space is one of the core essentials of survival; warmth, food, and shelter. We as humans will continue to value land because of its necessity and the metaphorical sense of peace it can bring – not to mention the financial security possible with successful ventures.
Comment below and let us know, do you feel safer with the long history of the banking institutions, or does the idea of truly keeping ownership transactions between buyers and sellers without third parties like the bank appeal to you? Where do you see NFTs going in the real estate market and beyond?