Between recession fears and a multi-billion-dollar scandal involving the now-infamous Sam Bankman-Fried and friends, all things crypto were on the defensive in 2022. Can they recover in 2023?
And what about blockchain in the property investment area? Any signs of life?
The Chain in Spain
In Southern Spain, the Omni Estate Group is offering real estate for cryptocurrency. On a self-service platform, clients buy non-fungible tokens that represent fractional interests in the firm’s 22,000+ holdings so they can receive regular rental income.
Omni defines itself as “Europe’s first ever fully regulated fractional real estate marketplace.”
Clients who actually buy properties make pre-contract down payments of 10%. The platform accepts bitcoin and other digital assets, as well as national currencies. An in-person meeting is necessary for notarizing the contract to complete a purchase. Once clients have the keys, they may rent out their properties, or live in them.
The company touts its “team of professionals of lawyers, financial analysts, tax advisors, architects, service providers and sales agents” to assist its clients as they buy and finance real estate in Spain. For investor buyers, Omni provides landlord support services.
Metaverse and Mixed Reality
A coin known as SAND has lost 87% of its value over the past year. Yet the project that minted it, The Sandbox, continues to draw people into the decentralized, interactive “Web 3.0” internet, marketing its digital real estate to celebrities and style-conscious retailers. The Sandbox has its allure for classic brands like Sotheby’s too.
Still, the future value of digital real estate could be anyone’s guess.
Some have high hopes. The Liechtenstein Cryptoassets Exchange cites a forecast from BrandEssence Market Research: annual growth rising a 31%, to reach the $1 billion mark in 2028. Meanwhile, McKinsey & Co. point to the business and retail potential, saying metaverse innovators could hit $5 trillion in value by 2030.
Virtual and augmented reality tech is quietly getting ready for prime time. According to Bloomberg.com, Apple will debut a “mixed-reality” headset in 2023, after a 7-year development period. Though they won’t be cheap, the new headsets will surely attract attention. And they could have implications for other interactive tech, including the metaverse.
Blockchain’s Promise, in a Nutshell
Of the one in five U.S. residents who have bought cryptocurrency, the typical buyer is a high-income millennial. Of all digital assets, they choose bitcoin the most.
Bitcoin is the “base layer”: the original and most trustworthy, decentralized asset in the blockchain world. Ethereum is part of the second layer, and enables smart contracts, which have especially interesting use cases for real estate. Many “layer 3” inventions are built, in turn, on Ethereum.
In 2009, the concept of blockchain as an indelible ledger sprang from a recession, as necessity breeds invention. Since then, entrepreneurs have introduced more than 21,000 unique blockchain-based securities, casually known as cryptocurrencies. Yet none have all the attributes of bitcoin, a digital asset some believe is analogous to gold.
The best case for blockchain is arguably what it brings to recordkeeping. It can record transactions indelibly, and trigger them when someone carries out a contractual promise. Blockchain could be the next technological milestone for financial agencies, title attorneys, and local clerks’ offices. It could also change the way we view, buy, sell, finance, and invest in real estate.
There’s much more to come in the interconnected worlds of blockchain, Web 3.0, and real estate.
Supporting References
The Liechtenstein Cryptoassets Exchange via LCX.com: A New Frontier of Web3, NFT, Real Estate in the Metaverse (Dec. 8, 2022).
Chris MacDonald for The Motley Fool: Why These 3 Metaverse-Focused Crypto Projects Are Rocketing Higher Today (Jan. 9, 2023; citing market data by Xignite).
James Royal and Georgina Tzanetos for Bankrate, LLC (a Red Ventures company), via Bankrate.com: Cryptocurrency Statistics 2023: Investing in Crypto (Jan. 5, 2023; citing figures from NBC News, Morning Consult and Chainalysis).
Bitcoin Magazine Guides: Bitcoin-Based Loans (Dec. 8, 2022).
Omni Estate Group: The Future of Real Estate (visited Jan. 2023).
Arijit Sarkar for CoinTelegraph.com: Metaverse to Possibly Create $5T in Value by 2030 – McKinsey Report (Jan. 7, 2023).
And as linked.
Photo credit: DS stories, via Pexels.