Are NFTs the Future of Real Estate?This Tampa Bay expert is betting on yes

The explosion of NFTs or “non-fungible tokens” over the past few years has left many Americans scratching their heads and wondering why they would pay millions for cartoon monkey pictures.

Digital art is one of the most popular applications of this technology, but almost anything can be converted to NFT. Earlier this year, he made headlines when his unpretentious four-bedroom home in Gulfport became the first US property to be auctioned as his NFT.

Since then, several other local homes have been converted to NFTs, including one currently for sale in St. Petersburg.

Led by local real estate agent Andrew Daniels, it works to educate consumers about the intersection of NFTs and real estate. He is the head of blockchain development for his New Wealth CoLab, a real estate investment group, and also hosts its own co-working space in Tampa.

Can you explain what blockchain technology is?

Blockchain incentivizes peer-to-peer transactions. Blockchain is a system that records all these transactions and makes them available for everyone to see once they are completed. It just allows everyone to act in a decentralized, peer-to-peer way.

Can you explain what an NFT is?

NFT stands for Non-Fungible Token. So there are fungible tokens and non-fungible tokens.

An example of a fungible token is a $20 bill. If I have a $20 bill and you have a $20 bill and we trade $20 bills, we don’t trade value.

An example of a non-fungible token is a real estate asset. It has your tax ID, legal description, and property address. It is very easy to distinguish this token from another property in Georgia. because they don’t have the same value. they won’t be the same.

NFTs can represent property, car registrations, and digital art. Representing ownership on a blockchain is just a vehicle.

How can blockchain technology be applied to real estate?

Currently we use county offices for central records, which is a very redundant system, very archaic and very (expensive) to take over real estate transactions. Probably involving 15 to 20 different people. Transactions on a ledger system like blockchain become a convenient central register of record for everyone to see.

We are currently waiting for government agencies to recognize blockchain as a verifiable source of information. Until that happens, no real estate deed can actually be recorded on the blockchain.

What we are currently doing is tokenizing properties as NFTs. First, create an LLC. The LLC owns properties that it wants to sell as NFTs. The owner’s operating agreement states that the property will be represented as a token number and held in a (crypto)wallet address. As such, anyone who holds that token in a wallet address has ownership of her LLC and has ownership of that property.

What are the advantages of tokenizing a house as an NFT?

In a typical home, your assets are illiquid. You have to go to the bank and get a home equity line of credit. Tokenizing a property makes its shares liquid. You will be able to connect your assets to a decentralized financial platform that lends in real time.

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If you rent your property, you can separate your assets from your income. So you can leverage the value of your home while selling your right to the lease income.

Tokenization also allows you to crowdfund your investment and split your assets so that multiple buyers can own your work.

What kind of person would be interested in buying or selling a house this way?

Mostly will be crypto enthusiasts. But this is also attractive to overseas buyers. There are types of cryptocurrency mortgages and loans that can be borrowed against cryptocurrencies so that you don’t have to swap currencies and use US dollars.

Do you see NFT properties going mainstream in the future? What will it take to get realtors and consumers on board?

The United States lags behind many other countries in this regard. So if you look at Norway or Switzerland, they actually use blockchain technology for identification and land registration.

It will probably take 10 to 15 years, but soon all assets will be digital assets. and obtain a separate, non-fungible token that can be authenticated in real time.

Perhaps within the next two years, the government will announce a central bank digital currency. So people start to understand what blockchain is without even being aware of it. This will be the first point of mass adoption.