When people discuss NFTs (non-fungible tokens), the market surrounding digital art such as CryptoPunks is likely to surface. If you haven’t heard of them, take a minute to look up CryptoPunk #5822. It is a pixelated alien with teal skin and a blue bandana that looks like it could have been a character on an old eight-bit Nintendo game. However, this particular NFT sold for $23 million.
Granted, after looking up the image, you could take a screenshot of it and store it on your phone. However, despite having the image, you don’t own it—and this can be proved by looking up the transaction history of the piece of artwork. You can see each bid that was made or withdrawn and the transfer of ownership. In fact, you can see that “deepak.eth” transferred it to “0x685aca.”
How This Connects to Real Estate
It would be a significant oversight to assume that NFTs are nothing more than artwork. The technology that enables these transactions may have almost limitless potential. Bitcoin was created as a new form of digital currency that was decentralized and outside the control of any government. Blockchain technology was the foundation for a public ledger that documented the transactions with the currency.
Ethereum took this concept one step further. They took blockchain and added the ability to store complex computer codes. In simpler terms, Ethereum’s true power lies in its ability to provide a platform for financial contracts and other applications. According to CNBC, “Ethereum was the first smart-contract-enabled network.”
If trading NFTs was made possible through Ethereum’s platform, then the same can be applied to other assets. When you buy a home, a title company will trace the home’s history. Who owned it, for how long, and then who was it sold to. They look for gaps in the chain of title and ensure each sale was documented correctly. This ensures no one has a claim on your home after buying it.
These smart contracts may not replace title insurance, but they are a step towards establishing an efficient and safe way of documenting who owns the property (the same way they do for CryptoPunk art) and the transfer of ownership. Potentially, a title search could take minutes.
Auricchio Law Offices
Whether you are buying or selling a home or require attorney-title agent services, contact the trusted attorneys at Auricchio Law Offices to schedule a free consultation. Regardless of the technology and circumstances, we will get you to the closing table and safeguard your transaction.
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