To all the agents in the house,
Probably like a lot of journalists, I somewhat identify as a contrarian. I went to a high school that didn't have a debate team, but had a competitive speech program called forensics. I competed in extemporaneous speaking on Saturday mornings in high school classrooms, and dazzled judges (an esteemed mix of involved parents and partied out University of Wisconsin-Oshkosh undergrads) with my clever takes on the five-year Congressional farm bill, the modern-day relevance of NATO, and other topics near to the hearts of confused teenagers. Maybe indiscriminate agricultural subsidies serve a purpose! Perhaps international military alliances are more powerful than ever!
This training prepared me well for the past week where I have dived into the world of cryptocurrency non-fungible tokens, or NFTs, and its intersection with residential real estate.
Now, to the non-contrarian, especially, say, someone with a background in the traditional real estate transaction, the use of NFTs seems completely nuts. NFTs gained traction in the U.S. economy in the past year, because they can be used to commodify digital assets and works of art previously difficult to commodify.
But real estate has been "tokenized" since 16th century England in the form of a deed. There already is a piece of paper, or PDF, of a deed representing property ownership, verified by a county government recorder. Creating a parallel structure with an NFT representing a property, verified by a blockchain platform such as Ehtereum, does not seem to make life for real estate professionals or consumers simpler, or fairer, or better in any way. It just adds another bureaucratic layer.
However, as a reporter (and noted contrarian), I am entertaining other arguments. One, of course, is NFTs eventually supplanting cash-strapped county governments, and the blockchain replaces excel spreadsheets housed by myriad local governments as the authoritative source for property information. This would require buy-in from the nation's deed recorders, not to mention the title industry and lobby, but it's theoretically conceivable.
Another, more specific idea, proposed by Palo Alto-based Propy, is putting homes into limited liability corporations, and then minting the NFT of the LLC. Propy executed its first-ever U.S. auction of a home in Florida this past week, in which an NFT of the LLC was exchanged, and the company handled the back end of making it comply with county property law.
In short, maybe there exists a future world in which NFTs could make real estate transactions simpler or more secure? Agents, let me know where you stand. Could NFTs be an exciting area for deal making innovation? Please reach me at mblake@housingwire.com.
Sincerely,
Matthew Blake
Senior Real Estate Reporter
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