There’s always pushback when it comes to adopting new technology. The closer it gets to becoming the new standard, the more people seem to dig their heels in. Our technology is progressing at a rapid rate, compounding on itself at astounding speeds. Consider that just a few decades ago, people thought the idea of buying books online was ludicrous. But Jeff Bezos and his startup Amazon changed the way we buy not just books, but everything. This latest paradigm shift comes by way of the blockchain—and smart contracts, crypto, and NFTs—as it gives buyers, sellers, and realtors new ways of transacting.

There’s a lot of complex terminology that gets tossed around when discussing cryptocurrency. But surprisingly (and perhaps counterintuitively), the end goal of these crypto systems is simplicity, security, and transparency. The aim here is to empower individuals and give investors more agency. Hardcore enthusiasts might bristle at the oversimplification, but the blockchain is effectively a ledger. It’s a decentralized database by design, one that relies on computers and servers all over the world to track transactions. This peer-to-peer hosting means the ledger is hypothetically more secure than say digital bank records: virtual thieves and hackers can’t steal records that are being hosted across thousands (or even millions) of individual nodes. Effectively, it’s a reliable, singular source of truth. Non-Fungible Tokens (or NFTs) are pieces of data that are stored on these blockchains. They’re designed to prove digital ownership of items; if you own an NFT, that proof of ownership lives on the aforementioned indisputable ledger.

Up until now, the most common use for NFTs was as a representation of digital art. Some of these NFTs have made headlines after selling for millions. Celebrities have appeared on talk shows to flaunt their own NFT investments, or even announce their own series of NFTs. More recently, NFTs have popped up as a way to create a digital economy in video games: virtual worlds where pieces of land, outfits, weapons, and vehicles can be freely traded. It’s a logical destination for anyone who sees events like last year’s bizarre Gamestop stock price bubble as the gamification of investments. This is a brave new world, and one that any crypto diehard will swear is the all-caps NEXT BIG THING. At the time of writing, the Biden administration is exploring regulatory structures to impose on the market. Those regulations will inevitably push crypto further into the mainstream. While some investors are diving in with both feet, others are standing, toes curled over the edge of the pool wondering, “Is this it?”

The short answer is a succinct “no.” While the current application of NFTs as art-pop assets is exciting, there’s a more practical long-term application: storing important documentation, like home titles and deeds. Massive corporations like Tesla have long been accepting Bitcoin as a form of payment. Last year, a staggering one out of ten first time homebuyers traded cryptocurrency to get (or supplement) their down payment. Why not transact in cryptocurrency directly? And to take it a step further, why not record these transactions and home ownership proof on the blockchain?

It’s an idea that tech-savvy brokerages are exploring. “The new wave of innovation is the next logical step in the way we buy and sell houses, similar to the way Steve Jobs saw a shift in how music is purchased, or how the aforementioned Jeff Bezos saw an opportunity in how . . . well, everything is purchased,” says Natalia Karayaneva, CEO and founder of Propy, a Silicon Valley startup.

“The reason a real estate property was the perfect candidate for an NFT,” writes Karayaneva in a recent Forbes article, “was that it already behaves like a digital asset in many ways. NFTing one provides numerous benefits, such as instantaneous settlement, and a simplified overall transaction process—exactly what young people who grew up with smart-phones desire.”

From where Propy’s standing, it’s less of a tech-savvy leap and more of a pragmatic inevitability. Of course, that doesn’t mean these digital transactions will replace the standard way of doing things in real estate. Digital storefronts still function alongside brick and mortar stores. Companies allow for telecommuting as well as in-person office visits. Real estate could end up offering a similar set of hybrid options.

Impressively, crypto is already at a point where home purchases on the blockchain are viable. The blockchain provides a safe and secure way to sell these physical assets. Previous forms of digital transactions couldn’t offer the level of security a home purchase necessitated. The blockchain also represents a more convenient, streamlined purchasing process. Mountains of paperwork could become a thing of the past, as homebuying joins the ranks of lightning-fast “add to cart” transactions available online.

Of course, that isn’t to say Propy believes buying a house will ever be so simple that it borders on becoming an impulse purchase. “Even if blockchain technology completely transforms the title, real estate and mortgage industries one day, we’re still in the people business,” says Karayaneva. “Today’s consumers still seek the guidance of skilled professionals when the financial stakes are high. There’s no substitute for human experience, empathy or creativity. Technology might change the way we do business, but it can’t compete with our ability to communicate, collaborate, build relationships or provide personalized service.”

While these changes to the real estate market are nothing short of revolutionary, crypto and blockchain pioneers are just getting started. There’s the opportunity to take advantage of the metaverse and virtual reality. Those looking for a home in the near future may find themselves touring dozens of homes in a single afternoon, all without leaving their couch. That’s not just through a web browser, seeing pictures. That’s donning a virtual reality headset and walking through the home as if they were there. The metaverse itself is also full of virtual properties and land waiting to be developed. Real estate sales in the metaverse hit $500 million last year, and trends indicate that will continue to grow in 2022. If that sounds at all shocking, it shouldn’t. After all, if history is any indicator, this is just the start of a new, wonderful future.

We live in the time of the computer, but our dreams are still spun on the loom . . . the Information Age will be the age of upward mobility. It will afford far more equal opportunity for the billions of humans in parts of the world that never shared fully in the prosperity of industrial society. The brightest, most successful and ambitious of these will emerge as truly Sovereign Individuals.

-James Dale Davidson, The Sovereign Individual: Mastering the Transition to the Information Age

 

Blockchain: A digital ledger made up of a series of hundreds or thousands of individual computers and servers. This network verifies every transaction and each member of the network records the transaction individually.

NFT: A non-fungible token. Fungible assets, like currencies, are regularly interchangeable: the dollar you deposit at your bank isn’t the same one you take out at an ATM later. NFTs are specific and individual, each one acts as its own digital fingerprint.

DEFI: Decentralized Finance. Crypto proponents argue that not having their currency of choice tied to a bank, country, or economy makes it safer and less susceptible to booms and busts.

METAVERSE: A blanket statement for simulated environments that multiple people can participate in at once via VR equipment. Think virtual chat rooms or corporate conferences.