Innovating Ownership with NFTs
Non-fungible tokens (NFTs) are getting a lot of attention for their potential to change the way we think about the physical and digital world.
March 18, 2021
As we quickly approach the anniversary of COVID-19 being declared a pandemic by the World Health Organization, conversations are taking place everywhere about which pandemic-induced trends are here to say. From the future of Zoom to the digitization of the workplace, our virtual world that once felt temporary has gradually become… well, less so.
Of all these conversations, arguably the most intriguing one surrounds the rising popularity of non-fungible tokens (NFTs) being applied to use-cases like video games, music, real estate and even art. Now, before you furiously close out this screen to avoid any more crypto jargon, we promise, that’s not what this article is about.
Instead, we’re interested in what NFTs mean for ownership, and how they might be used to extend the experience of ownership to a broader population. Because when you look past the news about Bitcoin’s controversial valuation or Elon Musk’s latest Dogecoin tweet, the NFT conversation is really rooted in philosophy. Yes, really.
Tokenizing the World
Entrepreneur Mark Cuban, who became a billionaire right before the dot com bubble burst, said in the most recent episode of his podcast that today's NFTs and blockchain technology are, “like the early internet days all over again… they’re going to be huge.”
Well, color us interested.
But before we dive into what NFTs could mean for the future, let’s run through the basics real quick. And we’ll even spare you from yet another primer on Bitcoin or blockchain.
A non-fungible token (NFT) is a unique, indivisible digital asset typically created on a blockchain. Each NFT’s uniqueness can be proven by its code, and no NFT can be interchanged for another, or broken down into smaller parts. In this way, they are different from exchangeable assets such as bitcoin or fiat currencies. Whereas you can spend $1.25 to buy a can of soda, you can’t make usable a fraction of a NFT.
In other words, NFTs have fingerprints that make them unique and non-interchangeable (or non-fungible). This makes them really useful for proving the scarcity and provenance of assets, both in the digital and real-world. That’s why NFTs are being used more and more to represent unique, valuable assets like art, playing cards, and even real estate. That’s right, innovative technology that makes it possible for anyone to experience ownership. Sound familiar?
Now that the pandemic has thrown the world into an increasingly digital landscape, people are becoming invested—figuratively and literally—in the conversation about NFTs and their seemingly limitless potential. At the core of this conversation is the idea that NFTs are built on decentralized finance (DeFi), or a system of peer-to-peer transactions that aren’t centrally recorded by, say, a bank.
“That’s important because centralized systems and human gatekeepers can limit the speed and sophistication of transactions while offering users less direct control over their money” says Alyssa Hertig of Coindesk.
So why are NFTs valuable? This actually isn’t a technical question, it’s a philosophical one. Why is the real Mona Lisa more valuable than the copy of it you bought at Target (even though you swear it looks just like the real thing)?
Humans have always attached value to things that are unique, one-of-a-kind, and authentic. That’s why a collection of artwork by Mike Winkelmann (popularly known as Beeple) sold in December for over $3 million—even though the art is entirely digital and represented by NFTs. It’s also why two Argentinian developers created Decentraland, a virtual world where users own, exchange, and manipulate digital real estate by exchanging cryptocurrency.
The NFT revolution isn’t as much about finance as it is about what our society values and––importantly––why. As the world becomes more comfortable with digital experiences, we’re also becoming less averse to the idea that those experiences can be evaluated in the same ways real ones are.
We’re even coming to learn that digital representation of real-world assets already permeates our everyday lives. Efficiencies in modern banking and capital markets are underpinned by Fintech solutions and digital representation, but other areas of our lives, such as real estate, have lagged behind. Even more, after the GameStop debacle earlier this year, NFTs and DeFi are emerging as a potential solution to our problem of deep-seated inequities and exclusionary financial practices.
So yeah, a digital art piece depicting the flying Pop-Tart Nyan Cat selling for over $500,000 is strange. But 30 years ago, regularly speaking face to face with someone across the Atlantic Ocean was also strange.
The world changes, and we change with it.
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Technological advances are historically notorious for stirring contentious philosophical debates about our values. What can and can’t be bought? Is digital art worth anything at all? What does it actually mean to own something?
That last question is where we thrive. The idea that ownership can have such a profound impact on our identities is what gives us energy. It’s what makes us so passionate about expanding access and opportunity for everyone to own in our communities by investing in real estate. We believe that when you own a piece of your community—even a digital one—that you are granted a deeper sense of belonging and responsibility. It is this very sentiment that our Founding Fathers believed to be so important about private property ownership. It’s the same sentiment that gave birth to the American Dream and the 30 year mortgage.
Yes, investing in real estate can be great for your wallet. But like NFTs, Rhove is about so much more than financial value. It’s about ownership. It’s about how access to that ownership affects you as a person and how you view yourself within your community––physical, digital, or otherwise. It’s about giving more people more opportunities to own in our communities, and empowering them with that sense of belonging.