For years, we have seen people online talking about NFTs, changing their profile pictures to cartoons of lions, apes and cats with mohawks and spending hundreds, if not thousands, of pounds to go to a yacht party.
People have huddled around the movement of buying and trading these NFTs with alternative cryptocurrencies like Bitcoin and Ethereum. Anyone looking in from the outside must be scratching their head, thinking, what is going on?
Well, this is the first wave of Web 3 applications. And although it may seem as if this crypto space is only for the tech-savvy, gen z and millennial, coffee-drinking fanatics — it’s not!
When you want to buy or sell a house, the process can be pretty long, with the average house sale taking three months — although some homes may not sell at all. One of the lengthiest parts of a house sale is conveyancing, where a solicitor will transfer ownership titles. They will communicate with third parties like the HM Land Registry and local authorities to request searches and land boundaries, which take excessive time and energy.
Many solicitors have made their way online and offer conveyancing services faster than the standard. However, there is still a long way to go in improving the accessibility and practicality between third parties and solicitors — as every company seems to have a system incompatible with the next.
If solicitors automated the conveyancing process through the Web 3 space, the time and energy spent on the conveyancing process could be decreased tenfold. Selling a house could be as easy as a few clicks. It wouldn’t completely replace the conveyancing process, but it would eliminate all unnecessary paperwork, allowing the solicitors to delve into complex issues – the fun stuff!
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What Is Web3?
Web3 or Web3.0 is the next iteration of the World Wide Web. It continues to evolve off the back end of Web 2.0, adding functionality where needed. Web3 is coined as the new, better version of the interest where transparency reigns.
In 2014, Gavin Wood, the co-founder of Ethereum, referred to Web3 as the “decentralised online ecosystem based on blockchain.” This effectively means that the ownership of Web 3 is distributed amongst its builders and communities rather than large corporations.
Without making things overly complicated, Web3 is the overarching term, and then beneath it, you have the Blockchain, the Metaverse, NFTs (Non-Fungible Tokens), Smart Contracts, Property Passports, Digital Identification, Tokenised Communities and DAOs.
What Are NFTs And The Blockchain?
The Blockchain is effectively blocks of data linked together in a chain. An NFT is an asset within the Blockchain with its unique code and metadata, making it completely different from any other NFT.
NFTs can be any form of digital media, be it a drawing, music, book, blog, university dissertation, or even the deeds to your house. When you trade an NFT, all the data and ownership are made transparent to the entire Blockchain so that you can see its previous sold prices and owners – see where we are going here?
A massive misconception about NFTs is that they are just digital drawings. In some cases, this is the case, however, in most, NFTs can be faced with an artwork or a photograph, but if you buy an NFT, you can reap benefits or utilities from the token. These utilities can be community-led or run by a brand allowing you exclusive access to their stores or a unique networking event, or they could be the ownership titles of a real-life property located in England.
How Could NFTs Impact The Property Market?
One of the most attractive features of an NFT is that they are entirely programmable. You can give an NFT complex or simple automation that, in turn, creates dramatic increases in efficiency to operations across multiple industries.
When an NFT is sold, you could use a smart contract to enable specific protocols to be met for the NFT to release. For example, when a deposit has been paid, contracts have been exchanged, keys have been handed over — the possibilities are endless. It could also be used for tenanted property, like triggering automated actions for rental payments or maintenance.
Due to the nature of blockchain technology, you could log the entire transactional history of the property by having a clear and transparent record of sold prices, investments, legal disputes, payments, planning permissions, recent renovations and past owners.
You can eliminate this process from the conveyancing and make an educated decision about the property of its current value.
You could buy or sell a property to anyone worldwide via an NFT marketplace. This could open you up to multiple property markets worldwide and property investors; if the other party has the correct documents, you can buy or sell the property to them.
A significant issue with both modern and traditional house ownership transfer processes is that sometimes the methods fail to secure payments and transactions, and where there is security, it can take weeks. With NFTs, you can transfer encrypted monetary assets almost immediately through crypto wallets directly to the other party.
Web 3 used to be a hypothetical scenario, but with the gradual integration of NFTs and brands trying their hand at the metaverse, the opportunity for massive growth of NFTs within the property market grows. This will revolutionise how we buy and sell houses in the future, which will be a much-needed and welcomed improvement for many.
If you have questions about Web3, NFTs and the property market, please feel free to get in touch!
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Tom is a Digital Content Writer passionate about sustainable property & property trends. Regardless of the subject, he will always write blogs of the best calibre. Read more about Tom here.
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