Blockchain is no longer just the foundation of cryptocurrencies and non-fungible tokens (NFTs), and disruptive technologies are now an essential part of the real estate industry, both in the real world and at the forefront of the “metaverse.” Of all the potential applications of blockchain, the most exciting opportunities lie in property — real or otherwise.
2021 is a breakthrough year for virtual real estate. Mars House is a stunning pixelated real estate that artist Krista Kim purchased for 288 ETH (the cryptocurrency was worth over $500,000 at the time). Taking advantage of the hype surrounding NFTs, some real estate agents offer unique digital images of properties to advertise their physical listings.
Home on Mars | Courtesy of Krista King
Heading into 2022, the hottest topic in financial markets and pop culture is the metaverse. Facebook has changed its name to Meta Platforms with a strategy to create a multi-dimensional successor to the Internet. SuperWorld and Decentraland are marketplaces — these platforms are precursors to the metaverse — where participants can buy and sell digital real estate while being immersed in a virtual world. Recent transactions include a $2.43 million property on Decentraland and $4.3 million worth of land on another emerging metaverse site, The Sandbox.
Because each property is a unique NFT purchased with cryptocurrency, ownership and authenticity are recorded and verified on the blockchain. Janine Yorio, managing director of Republic, a marketplace that showcases cryptocurrency and metaverse startups, insists that digital property values will appreciate as real-world companies begin participating in the virtual real estate ecosystem. Metaverse Group is not only a platform for investing in personal virtual properties, but is also launching a real estate investment trust (REIT) based on Metaverse land assets.
Recognizing the “smart contract” capabilities of encryption, many experts believe it’s only a matter of time before real-world real estate transactions take place on the blockchain. Propy is a Silicon Valley “proptech” company that automates real estate transactions by deploying smart contracts and recording all documents on the blockchain.
In real-world evidence of the fusion of real estate and blockchain, an actual penthouse in one of Miami Beach’s trendiest towers sold last summer for the equivalent of $22.5 million in what is believed to be the largest cryptocurrency real estate transaction on record.
by Roger Grody
This article originally appeared on houses and estates Magazine.
