I think I know what you’re asking yourself. You’re wondering to yourself, What in the world is an NFT? Well, let me explain it to you… NFT stands for Non-Fungible Token. NFT Real Estate allows you to hold ownership of your property through the blockchain. The idea of tokens and crypto has been around since Bitcoin was first developed, but NFT’s are really starting to gain some traction right now.
What is NFT Real Estate?
Non-fungible properties are real estate such as homes or investments held within an NFT and recorded on thre blockchain. They can be bought, sold, traded, etc just like any other crypto asset. The difference between them and fungible tokens is that they represent unique assets in a portfolio of similar assets. Fungible tokens are essentially replaceable.
For example, if I had torn a $100 bill, that could be replaced by any other $100 bill and be exactly the same. This is the case for any currency or asset that is not unique. The same is not true for these non-fungible tokens as they are each completely unique and cannot be replaced or replicated.
Purchasing an NFT generates a unique digital token with all the necessary information and details of the transaction stored on it. Once that token is stored on the blockchain, it becomes publicly accessible and records both the purchase and proof of ownership.
Essentially, NFT’s provide a public way to track proof of ownership by utilizing the blockchain technology.
Examples of Non-Fungible Tokens
Non-Fungible Tokens are digitally unique, meaning each one is different from other tokens. Think of them as Beanie Babies for today’s technological world. There are multiple examples of Non-Fungible Tokens in action.
Cryptokitties became famous last year when they launched on Ethereum to much fanfare because they allowed players to adopt and breed digital cats. IAmElemental’s set of heroines are non-fungible tokens with a story behind each one which can be purchased by users online. Each heroine has their own attributes which shows off their identity just like Pokémon cards in physical form.
Why Would I want my Property as an NFT?
Having your real estate investments held within NFT’s can provide many added benefits. One obvious example would be in facilitating and simplifying the process to buy and sell traditional real estate properties. Can you imagine buying and selling a house with the simplicity of the click of a button?
Another great perk of the ability to buy property as an NFT is the prospect of fractional ownership. Easily purchase a few weeks of a summer vacation rental or maybe buy into a real estate investment trust. This is all possible thanks to the recent developments of the blockchain and NFT’s.
What is Decentralized Financing?
By minting your property as an NFT you also open the door to buyers being able to used decentralized finance to purchase your home. Peer-to-peer finance, known as DeFi — short for decentralized finance — is the newest form of banking and financial services powered by the internet.
It does away with banks or brokers who used to be necessary when people wanted money from one another – instead, it relies on a global network of computers connected to each other via blockchain technology. These computers can process transactions instantly without human interference, effectively providing cheaper loans at lower interest rates for those in need of them.
How Do I Find NFT Real Estate Opportunities on the Blockchain?
- HomeFree is the first Real Estate dedicated NFT Marketplace giving you the opportunity to find real estate NFTs backed by real world properties.
- Propy was the first company to mint and sell a real estate backed nft. They offer their services to agents and thus also advertise their agents properties on their site as well.
- Hire a Professional
- As always hiring a professional might be best for you. While some real estate agents may not know much about these opportunities, there are those that are quickly becoming the industry experts and thought leaders. It may be wise top seek their advise in this new developing side of the real estate industry.
How Does it Work Once I’ve Got My Tokens?
Once you’ve received your token you now officially own the NFT as well as the real property attached in the smart contract. You can choose to sell or trade your tokens at any time on a number of different exchanges, however once you sell them or transfer ownership they are gone forever.
As this industry is still do early in it’s development, we highly recommend ensuring that there is also a title and escrow company to facilitate the process.
When will this be Ready for Mainstream Use?
NFT real estate properties will likely become much more common over the next year or 2 as more people become familiar with the technology and terminology.