Why The Property Sold In The U.S. Using NFTs Is A Huge Deal

Here’s Why The Property Sold In The U.S. Using NFTs Is A Huge Deal:

 Rootstock onChain, a blockchain-based online property marketplace, has recently sold a US property as a non-fungible token (NFT). The purchaser completed the transaction with one click, with the whole process taking minutes instead of months. Here’s why this is a huge deal:

 If you pay attention to social media, you have probably heard the term NFTs a lot over the past year. You likely associate NFTs with what are known as PFP projects (Profile pic projects). While it seems pretty abstract for a single image of a “punk” or “ape” selling for seven figures, the technology behind NFTs is what drove the frenzy. Collections such as Cryptopunks and Bored Ape Yacht Club have been known to sell for six or even seven figures.

An NFT is a unique digital identifier that proves authentication and ownership of a digital or real-world item. Transaction details are stored on an immutable distributed blockchain ledger – meaning decentralized computer nodes worldwide store and validate the transaction, making it secure and final.

 Initially, NFTs have been used by the online cryptocurrency community to signify their affiliation to sub-communities by purchasing and using the NFT as their Twitter display picture. However, for those who understood, it was the tech powering NFTs that attracted them.

 This article will look at the real estate industry and how NFT technology could be about to reshape it.

 Let’s start by comparing some of the past decade’s greatest innovative organizations and technologies: Bitcoin, artificial intelligence, virtual reality, Uber and Stripe. Each of these innovations, in some way, increases the efficiency of a given process. With ongoing labor shortages, the need for efficiency to keep the world running is more significant than ever.

 For example, Bitcoin created a peer-to-peer transaction system, eliminating the need for central banks to facilitate payments. This enables more efficient transactions, particularly for cross-border payments.

 So, how does this relate to the real estate industry? It’s simple; the real estate industry has remained stagnant regarding innovative systems for decades. Even though online marketplaces allow for better property viewing options (especially for international investors), purchasing a property has remained the same for many years.

 The process for a property transaction involves multiple parties, including brokers, banks, solicitors, estate agents and surveyors. This creates a dragged-out process, which can often take months. The process is inefficient compared to the stock or crypto market, where transactions are complete with one click.

 So, how has Roofstock onChain improved the process? The company creates LLCs and inputs the property deeds into them. They then input the LLC ownership rights into an NFT, allowing the property to be bought as an NFT. The NFT was purchased using USDC – a cryptocurrency stablecoin pegged to the U.S. Dollar.

 Chief Blockchain Officer Geoff Thompson stated, “Providing a radically simple mechanism for SFR homes to be purchased and sold with one click using web3 technology is a huge milestone for Roofstock.”

 Meanwhile, the buyer of the NFT, Adam Slipakoff, said, Instead of waiting months for underwriting, appraisals, title searches and preparing deeds, I was able to buy a fully title-insured, rent-ready property with one click. Best of all, I am no web3 expert – the Roofstock onChain platform made it simple and easy.”

 With this in mind, there are some clear advantages to NFTs for the real estate industry. As well as the general technological benefits of NFTs, such as immutability and decentralized, encrypted storage of data, NFT technology can solve many issues currently faced in the real estate market.

 Firstly, the buying experience is much more similar to purchasing a stock or cryptocurrency through an online broker. As property deeds are included in the NFT, the buyer does not have the confer with numerous parties. Instead, they simply make the payment via an online marketplace in one single step. Also, Roofstock onChain even offers property management services, so the property investment can almost be autonomous.

This creates a seamless process, leading us to our next point – NFT tech removes the locational barrier for property investment. As NFTs are immutable and verifiable, ownership proves you also own the licenses included in the NFT, this removes some of the friction associated with purchasing international properties. It also enables cross-border payments at a faster and cheaper rate than before.

Consequently, one of the most significant limitations of the real estate industry – being location-based- can potentially be reduced as NFT property adoption grows.

 In conclusion, the real estate industry is in grave need of innovation. While the recent NFT sale is a promising sign of things to come, there is still a long way to go before this new way of transacting becomes mainstream.

 Even with its benefits, the regulatory and legal elements of NFTs and cryptocurrency are still yet to be finalized. It will likely be another decade before we have certainty on regulations. But until then, blockchain projects will keep innovating to solve problems and reshape industries worldwide.