The Future of NFTs and Commercial Real Estate

Aviva is a third generation commercial real estate broker, owner and managing broker for Sonnenerich & Company, an investor based in Denver, Colorado.

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Cryptocurrency and blockchain have entered many industries. And as more and more people in our lives move into the digital realm, the way we buy and sell products is constantly changing. Real estate is looking at its own transformation towards blockchain by creating non-fungal tokens that represent physical properties. This technology can have a dramatic impact on the future of commercial real estate.

So, what are NFTs? They are unique tokens issued in blockchain that represent each other. They are currently used to sell digital products such as art or music, verifying ownership of the product with a unique, unchanging signature. But NFTs are slowly fading to indicate ownership of physical objects in the real world, making them an excellent alternative to buying and selling real estate assets.

I have been examining NFTs for the past one year and during that time I have accumulated a seven-digit portfolio that I want to keep for a long time. As soon as I fell in love with the NFT space, I started developing my own NFT project, which is still in development. I am partnering with a prolific national developer to raise real estate development funds by creating additional revenue streams through NFTs and guaranteeing authenticity.

Why Use NFTs for Real Estate?

One disadvantage of investing in real estate is the difficulty in transferring property ownership. Currently a huge amount of paperwork is required to buy a property or open an equity line. With NFTs, the transaction process is streamlined, allowing the buyer to acquire ownership of a portion of the real estate in minutes.

Digital transactions are often the target of cyber fraud. However, by using blockchain and NFT technology, you can achieve a high level of security and data integrity. It protects both buyers and sellers and makes it very easy to move property without any problems. Buyers can borrow against NFTs using decentralized finance (DeFi) or traditional finance (TradeFi) products on the blockchain, while many large banks may skip the required effort when taking out mortgages.

How does it work?

To sell real estate as an NFT, the first step is to go through the necessary legal preparations to ensure that it complies with the regulations. This requires the involvement of a lawyer with experience in blockchain technology. Being within the boundaries of the law is always a priority, but it presents challenges with the introduction of new technology. Think about online banking and how far it has come since the advent of the internet.

Once you are ready to proceed, you can create an NFT with detailed and legal data about the property. Minting is a process that anyone can do by uploading JPEGs and smart contracts to the NFT marketplace – a website that provides a safe environment for NFT creators and buyers to buy and sell NFTs. It fills the NFT with all the paperwork, disclosure and reports needed to provide the legal right to indicate proof of ownership.

Once you have created NFT, you can register it on the NFT Marketplace to sell to potential buyers. Buyers bid on the property and the winner of the auction pays for the property in fiat money or cryptocurrency. Once the funds are released to you and the NFTs are transferred to the buyer’s wallet, the buyer completes the paperwork to finalize the transfer. Once the buyer becomes the owner of the NFT, they become the owner of the property.

More consumption cases of NFTs in real estate are sure to change the entire industry. Overall, the process of transferring ownership only takes a few minutes, which is revolutionary compared to the time it currently takes to buy a property. With our tendency to want the “one-click” option to buy and sell, it is only a matter of time before NFTs and real estate join hands.

Challenges in Using NFTs for Commercial Real Estate

As we have learned with the introduction of new technologies such as cell phones and the internet, good comes with bad as well and the adoption of NFTs and blockchain technology in commercial real estate is challenging. First of all, from what I have observed, commercial real estate is primarily owned by people of older generations. Needless to say, the older generation is less enthusiastic than the younger generation in adopting new technology.

Second, blockchain technology is so powerful that I think it can eliminate many intermediaries in the commercial real estate industry. For example, title companies can run for their money and go the blockbuster and payphone route. It will definitely take time.

If we look at how the Internet has spread to almost every aspect of our lives, I believe the NFT space is transforming real estate, and if that is true, there is no doubt that more are on the way. There are many challenges.

Preparing for the future

So, how do you prepare for the upcoming changes in the commercial real estate industry? First of all, if you read this article, you’re off to a good start. Education about this place is very important. Without a basic understanding of blockchain technology and NFTs, it is difficult to understand all the benefits that technology brings to commercial real estate.

Next? Buy. There is a learning curve when it comes to buying and selling NFTs. The only way to learn is to practice. Buy NFT and then sell it. Familiarizing yourself with the process pays dividends in the long run.

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The debate over NFTs continues – how do they affect gaming?

If you’ve been watching gaming or technology news for the past year or so, you may have heard the term “NFT” at least once. NFT stands for “Fungal Token”, honored by tech gurus, cryptocurrency fans and gaming executives as the “future of gaming” or the art or some other digital marketplace. Represents. This applies.

Along with these ringing endorsements comes a huge amount of backlash and ridicule, especially among gaming enthusiasts. Many of them fear how companies can misuse NFTs to extort money quickly from consumers. Ultimately, however, there is a real possibility that gaming companies will adopt NFTs more widely in the near future, which is important considering how it affects gaming landscape for better or worse.

NFWN (“What can not be done now?”)

In fact, those who have only heard of NFTs or have fallen asleep to the sound of technical or financial terminology may be wondering what NFTs are. In particular, NFTs are pieces of data that represent isolated digital objects, which in principle cannot be replicated, hence the “irreplaceable” part of the name. This data is stored in a blockchain, a type of digital ledger spread over a network of computers that records transactions made with those digital objects. Virtually any kind of digital property you can think of, be it an image, a video, an audio clip or the skin of a video game, can be created in NFT and used to pay hundreds. They are willing to pay thousands if not thousands of dollars for them.

Some may wonder why someone pays so much for something as simple as GIF on the internet. One reason is related to the recognized specificity of NFTs; Since the entire blockchain must have a limited amount or only one in each NFT, it makes more sense to buy it because the purchaser is that particular person or the only person in the world. Happens. Subject. It essentially repeats the concept of ownership that is generally understood for commodities; When someone buys a physical product, they own that product, but this does not apply due to the easily copyable nature of digital goods. With NFTs, people hope to bring digital ownership in line with physical ownership.

The most powerful encouragement of all

This at least partially explains the psychology behind buying NFTs, but there is a more external benefit to doing so: money. Although NFT opening prices are often very steep (for example, the average NFT price in OpenSE is $ 500 USD), it is very attractive to sell them, especially at auction when buyers bid higher than the opening price. Can be put.

In addition, every time NFT is sold, the original creator may be deducted from profits as part of the royalty agreement. The actual creator is not guaranteed to benefit from this, especially since placing NFTs on the blockchain requires a large gas fee. But if NFTs become popular, those sales cuts will actually increase. People have debated whether it qualifies as a pyramid or ponzi scheme, but it is beyond the scope of this writing.

NFTs Gaming Matsuda

What do game companies plan to do with NFTs?

So why do video game developers and companies want to use NFTs in the first place? One obvious reason is that they can make more money; After all, if the average person on the Internet could make thousands or millions of dollars from NFTs, one can only imagine how much a major company could earn. But his motivations run deeper than that, at least if his rhetoric is anything to go by. Some developers are using NFTs as an opportunity to explore new game concepts. For example, Dom Hoffman, one of the founders of the now defunct Wine app, is designing a console that can play games built into Blackchain. Their goal is to make each copy of each game unique from a visual and gameplay perspective.

Frequent discussion among video game executives, however, comes with the ability of NFTs to purchase items or reward players who create content in the game. So if a player buys a cosmetic hat item in a multiplayer shooter called NFT, they can sell that cap to other players online and make a profit. Or they can create a custom map in a single shooter and set a price tag on it instead of enjoying it all for free online player. Square Enix President Yosuke Matsuda and Ubisoft Strategic Innovation Lab VP Nicholas Ford both highlighted this as a key innovation of NFTs.

Less than a successful venture

All of this is fine on paper, but it does not make sense in the end if players are not interested. The results of companies’ NFT ventures so far suggest exactly the same. Two weeks after Ubisoft announced the inclusion of NFTs in Tom Clancy’s Ghost Recon Breakpoint, the company was able to sell only 15 NFTs. The desire of developer GSC Game World to include NFTs in STALKER 2 became so intense that the studio completely changed its decision. Small, dedicated NFT games like Axi Infinity have had more success, but major companies have not yet reached the level of cracking code. Valve’s decision to ban the sale of NFTs and blockchain games on Steam further complicates matters for major studios.

Not only can a resale NFT make more money than it actually is, it also highlights the absurdity of the whole concept. NFT is considered valuable because it is rarely recognized and people can make another copy if anything goes wrong. People see real value in the absence of physicality because it is a real, tangible thing. On the other hand, digital scarcity is not real; It is only artificially rigged and NFTs do nothing to change it.

How important is the opposition?

Despite significant opposition to NFTs in the gaming public, research suggests that the protests may not be as widespread. According to a recent study by Interpret, 56% of players surveyed expressed interest in adopting NFTs through gaming. This study at least at first glance, after the initial response to NFTs began to decline, many players exhibit warmth towards them and embrace them as they move forward.

However, there is an important question that this study did not answer: players may be interested in earning NFTs in games, but are they interested in buying them? The study found that 53% of players surveyed prefer earnings performance over the ability to sell and trade NFTs, which is important to consider. The idea of ​​owning a rare, unique digital asset certainly seems appealing on paper, but players are likely to fade into the novelty of NFT ownership once prices are included in the equation.

The value of a digital item is purely subjective and many players do not see the value of spending large sums of money for NFTs because they are so small. This is one of the main reasons why NFTs create such a volatile market; When the price of NFT is higher than the price that customers see in it, how can its advantage be maintained?

Odd future

Ultimately, it is impossible to know exactly what the future of gaming will look like if NFTs become the norm. But given the current structure of NFTs and blockchains, as well as the current state of the NFT market, there is every reason to doubt the day-to-day rhetoric coming from proponents of the technology. NFTs can easily turn some games into grind-heavy slogs and the markets they promote may not be viable in the long run. Technology has the potential to improve many of the current issues with NFTs and blockchains, but for now, it’s best not to bother players.