We currently live in the era of cryptocurrencies and Non-Fungible Tokens or NFTs. While it may be a somewhat cumbersome market to understand, the reality is that modernity is heading towards them, and real estate is no exception.
But before that...
What are NFTs?
In simple terms, an NFT can be anything that has the potential to be digitally represented. We're talking about a tweet, a meme, a video, a gif.
Even a property, but we're almost talking about that.
These digital assets are indestructible, non-fungible, and cannot be divided or exchanged with each other because there are no two identical ones. What can be done, however, is buying or selling them.
And how are they sold?
Through cryptocurrencies, which are an alternative digital financial system that is not controlled by any country or financial entity.
Unlike an ordinary financial system, where central institutions exist to maintain system administration and a clear record of all transactions, that doesn't exist in cryptocurrencies.
That's why it is known as a "decentralized system," as all individuals are part of the system by having a live and updated record of all occurring transactions.
With that understood…
What do NFTs have to do with real estate?
This is where it gets interesting.
It turns out that houses can now be purchased through this modality.
At the beginning of the year, the real estate startup Propy auctioned a 200 square meter house with five bedrooms and three and a half bathrooms.
And no, we're not talking about a virtual house; we're talking about a real property in Tampa, Florida.
The auction started at $650,000 and sold to the highest bidder for a total of 210 Ethereum.
What benefits does it bring?
Through this sale, the owner not only obtains property rights but can also store it in their digital wallet and use the NFT as collateral to request loans on decentralized finance protocols.
This means that the purchase record is stored on the blockchain, reducing costs for buyers and allowing them to acquire a property in just minutes.
Additionally, the buyer and seller do not need to be in the same room to complete the transaction, as the sale of the NFT can be done from anywhere in the world.
The reality is that we are still a bit far from the widespread use of real estate sales as NFTs, and many are skeptical about the future of this modality. However, that doesn't mean it's not a market worth considering for investors or stakeholders.
