New Waves Sets With First Real Estate-Backed NFT Sale in the US
New Waves Sets With First Real Estate-Backed NFT Sale in the U.S: Worth $653,000
Before discussing the real estate-backed NFT sale, we will discuss NFTs and their sales and purchase.
Non-fungible tokens seem to have exploded from last year. These digital assets sell like 17th-century exotic Dutch tulips for a few million dollars, from music and art to tacos and toilet paper.
What Is an NFT?
An NFT is a digital asset representing real-world art, music, indoor game items, and videos.
They are sold and bought online, often with Cryptocurrency. And they are usually encoded with the same essential software as many Cryptocurrencies.
Although since 2014, NFTs are art and becoming infamous as they have become an increasingly popular way of buying and selling digital artwork.
How is an NFT Different from Cryptocurrency?
NFT stands for Non-Fungible Token. It is usually done using the same type of programming as Cryptocurrency, such as Bitcoin or Ethereum, but the similarities disappear.
Physical money and Cryptocurrency are fungible. It means they can be exchanged or traded for each other. They are equal in value; one dollar equals one dollar, and One Bitcoin is always similar. Cryptocurrency makes it a reliable means of transacting on Blockchain.
How Does an NFT Work?
NFTs exist on a Blockchain. It records transactions due to distributed public ledger. You are probably most familiar with the Blockchain as an essential process that enables Cryptocurrencies.
In particular, NFTs are typically placed on the Ethereum Blockchain, although other Blockchains support them.
An NFT is created from a digital object. It represents both intangible and tangible objects, including:
- Videos and sports highlights
- Virtual avatars and video game skins
- Designer sneakers
Twitter co-founder Jack Dorsey sold his first tweet as NFT for over $2.9 million; even tweets count.
NFTs are like physical collector’s items like digital property. So instead of getting the original oil painting to hang on the wall, the buyer receives a digital file.
They also have special property rights. According to digital property rights, there can be only one owner of an NFT at a time. NFTs’ unique data makes verifying their ownership and transferring tokens between owners effortless to execute. The creator or owner may also store some information. For example, artists can sign their artwork by adding signatures to NFT’s metadata.
What Are the use of NFTs?
Blockchain technology and NFTs give artists and content creators a unique opportunity to make money from their products. For example, artists will no longer rely on auction houses to sell their art.
The artist can sell it directly to consumers as NFT, making them more profitable. In addition, they can program in royalties. Whenever their art is sold to the owner, they will receive a percentage of the sales.
How to Buy NFTs online
If you want to start collecting your NFT, here are some key factors:
First, you need to have a wallet to store your cryptocurrencies and NFTs. You need to purchase some cryptocurrency, such as Ether. It depends on the NFT provider which virtual currency he accepts. You can buy cryptocurrencies on many platforms like Coinbase, Kraken, eToro, and even PayPal by using credit cards. You will then transfer it from Exchange to the wallet of your choice.
Should You Buy NFTs
NFTs are extremely early in their existence, and the future of NFTs and their use is still uncertain. There will be huge winners in this space, and many players will go to zero. In simple words, investing in NFTs is a very personal decision. It can be worth considering if you have money to save, especially if a piece means something to you personally.
But keep in mind the value of NFT depends on what someone else is willing to pay for it. Therefore, demand will drive up prices rather than fundamental, technical, or economic indicators, which generally affect stock prices and form the basis of investor demand. It could cause NFTs prices to skyrocket due to demand, but on the flip side, NFTs could easily be resold at a lower price than you paid. Or, if someone doesn’t want it, you may not be able to resell it.
Use of NFT to Sell Your Property
In late May, news broke about the world’s number one Blockchain technology: an apartment in Ukraine will be sold at auction as a non-fungible token (NFT). The company that made all this possible had previously used the exact property to demonstrate the power of the Blockchain. It facilitated the actual sale in 2017 using the Smart Contract.
Therefore, it raised eyebrows when the apartment was presented to the public. Devon Bernard was auctioned off, who paid $93,429.72 for 36 Ethers (Cryptocurrency developed from the Ethereum protocol).
The successful housing sale follows an April attempt to sell a duplex in Thousand Oaks, California. The initial bid for this particular property was 48 Ether (approximately $117,000). However, it failed to be sold on the open market.
In 2021, these two different experiences with NFTs and real estate brought a lot of attention to the world of NFTs. While digital items are commonly used to buy and sell and track them on the Blockchain, the potential of NFTs in the real world is not being lost in the industry of real estate.
The transactions of NFTs in real estate
Since there is only one successful real estate transaction using NFT, it was in Ukraine. Therefore, it remains to look whether this technology will meet the varying requirements of this type of real-world agreement globally.
NFTs, Blockchain, and Chain of Title
You need to make an NFT item that you will always want to identify individually. It can be a unique item, such as a piece of real estate, or a copy of many similar things, such as digital work.
Then each NFT is recorded on the Blockchain. This record follows its lifetime item (digital or real), providing an easy way to track ownership and other information. Theoretically, this makes NFTs quite relevant for real estate transactions.
When you buy a piece of property in the United States (and many other places), the title search is routine. It digs in the dirt to determine who owns the property over time and whether any of these descendants can make a legal claim. NFTs would allow more certainty over property ownership and allow buyers to easily run searches independently. It could even help lower the need or cost of title insurance the buyer would need long-term and allow for cleaner and safer title transfers.
Lastly, and most importantly for those that wish to create NFTs to facilitate the transfer of titles in the real estate space, the creator of the original NFT could attach a royalty to the NFT smart contract. It would allow the creator of the NFT to make a small royalty off of each sale of the property in perpetuity for the creation of the NFT. This royalty could result in better technologies for the real estate space and cleaner titles being transferred for all.
Real Estate-Backed NFT Sale in the U.S Worth $653,000
According to a Blockchain startup executive, sales of NFTs could “become a norm in the real estate industry,”. NFTs can now be used as collateral for Cryptocurrency lenders and borrowers, and the execution of the title paperwork and ownership records into NFTs could help facilitate smoother and cleaner title transfers
A Florida home has been auctioned off as NFTs (non-fungible tokens), the first transaction of its kind for both real estate and Cryptocurrency. The four-bedroom Gulf Port home sold for $653,163 in Ether, and the winning bidder now owns NFT. Falaya is a Blockchain real estate startup that hosts and facilitates sales.
Real estate-backed tokens can be used as collateral for Cryptocurrency borrowers and lenders. About 50 people signed up for the auction, confirming their identities as required by the platform. However, only a few people bid on the sale actively, with the winning bid being $653,163.