I have a friend. She’s in real estate. She’s mad at me.
She asked me about earning 10% annual interest in a crypto-savings account. I sent her a copy of the special report I wrote on decentralized finance and crypto-banks such as BlockFi for subscribers to our monthly Global Intelligence Letter. I also told her I thought her industry was about to go through a massive disruption that will hit Realtors hard.
That’s where the anger started.
If you regularly read these dispatches, you no doubt have come across my writings on NFTs, or non-fungible tokens. These are one-off, one-of-kind crypto tokens that cannot be duplicated.
Every single bitcoin is identical to every other. But every single NFT is unique…and that means NFTs can be used to represent unique assets.
They’re all the rage these days on the blockchain, primarily in the art world. Some, very average, ordinary NFTs tied to blockchain videogames are now selling for thousands of dollars. A few months ago, these cost $10 or less.
But art is merely the gateway drug that will unleash NFTs. Soon, they’re going to invade just about every facet of our lives.
Your driver’s license will be an NFT. Your healthcare card. Credit cards. Airline tickets, movie tickets…tickets of all kinds.
Perhaps the biggest NFT disruption will happen in real estate, an industry that has long needed disrupting because of its cost structure.
To that end, two stories popped up in my news feed this week:
- Artificial Intelligence Is Taking Over Real Estate—Here’s What It Means for Homebuyers
- How This Startup Proves NFTs Can Solve Fundamental Problems in Finance
The first story basically notes that AI is rooting through troves of public data to automatically pull all sorts of information—from land records to liens.
All that stuff is online somewhere, part of state, county, and city databases. AI uses algorithms to weed through millions of docs in seconds, instead of having humans weed through the databases, looking for what they need to complete a transaction.
I see a world coming very quickly that will marry AI with blockchain “oracles”—technology that brings tangible, real-world data (from land records to liens) onto the blockchain.
When that happens, the blockchain will have a brain that hunts through gazillions of documents to match up all the necessary paperwork for a transaction to complete.
And all of that will happen in minutes, with no middleman in the midst robbing your wallet with usurious fees.
As for story #2…the “fundamental problem” noted in the headline is specifically the high cost and time requirements of a typical real estate transaction. Those deals take months and require lot of middleman costs, like paying a real estate firm and courier fees and search fees and breathing air on a Tuesday fees.
Well, now along comes Fabrica, an online portal that is essentially creating an NFT out of land parcels, and then listing and selling that NFT online as a way to transfer land ownership.
She who owns the NFT, owns the land.
The cost: All of $300.
And the transaction completes in a few days, not weeks or months.
Right now, Fabrica is primarily dealing with tracts of undeveloped land. But seeing a future in which residential properties are listed and sold the same way isn’t terribly taxing on the noggin.
This is the tomorrow we are headed toward. Anyone who owns real estate will soon own an NFT. And they will be able to trade that NFT online almost as easily as one trades shares of stock through an online brokerage account.
Of course, this is bad news for my friend—her days as a real estate agent are numbered, though I didn’t necessarily phrase it that way in our chat.
But here’s the reality all of us confront: A revolution is underway—the blockchain revolution.
And revolution is a Gemini—a two-faced creature. She brings blood to our streets at the very same moment she presents great opportunity.
You can’t have one without the other.
So, be prepared for a revolution that’s already taking shape. Don’t fight it; embrace it. There’s a great deal of money to be made on the right side of this.