What if buying a piece of real estate wasn’t a complex and time-intensive process? Dealing in real estate typically involves interacting with an intermediary, swimming through paperwork, and paying steep fees and commissions.
Even with the latest advancements in technology, many jurisdictions still require real estate buyers and sellers to show up in person to execute their documents. Most often, this is due to notaries being required to see people physically sign documents, and while some notaries can do this task virtually, not all have the same capabilities.
Now, with the help of cryptocurrency (specifically NFTs and smart contracts), the trajectory of real estate transactions is rapidly changing. We’re talking about taking out the middleman and obtaining and transferring ownership with ease. Sales can even be made through sites similar to eBay, but with a new level of added security.
In this writing, we will be specifically focusing on crypto’s effect on the luxury real estate market. But first, let’s start with the basics—how NFTs and smart contracts work.
What is an NFT?
NFTs, short for non-fungible tokens, are cryptographic tokens that can come in the form of many things (e.g., music, drawings, videos). Each NFT is 100% unique and cannot be replicated or replaced. Many times, NFTs represent digital ownership of something, such as a piece of digital art. In other instances, they can be representative of a physical item, such as real estate property and memberships.
NFTs use blockchain technology to maintain their verifiability and proof of ownership. Theoretically, the actual digital file that an NFT lies on can, in fact, be copied, but this does not mean that someone has taken over ownership. The culprit would need access to the smart contract that’s attached to the NFT as well. Moreover, they would have to be able to alter the smart contract that has been recorded on the blockchain, which is virtually impossible to do.
What is a smart contract?
Smart contracts are self-executing pieces of code built to facilitate a transaction. The transaction automatically resolves after pre-defined conditions have been met. The contracts are coded into the blockchain and maintained by regulators after recording them.
They are binding contracts that do not require the interference of a central authority or legal system. Because of this, they’re much more cost-efficient. After all, attorneys, realtors, and appraisers are never cheap.
How are the two transforming luxury real estate?
As previously mentioned, the two above elements are changing the luxury real estate industry by cutting out intermediaries, but another way is by innovating the use of memberships. If you’ve ever owned a timeshare or had a country club membership, you probably know that ownership is not easily transferred. Moreover, your package typically includes an annual renewal process and membership dues.
Now, with promising memberships such as the Aspen Lakes Membership by RHUE Resorts, assets can be owned in perpetuity without the need for annual renewal. Said assets can even be passed down through family members and friends if desired. Conversely, memberships can be sold in secondary markets such as OpenSea, an NFT marketplace that’s similar to eBay.
Through the NFT membership model, Aspen Lakes Membership purchasers can enjoy:
- Little to no application process or fees
- No annual recurring dues
- Transferability with ease (no middleman required)
- Existing amenities, such as the world-class 18-hole golf course, pro-shop, restaurant, wedding and event center.
Most NFTs are restricted to being purchased with cryptocurrency only which can ostracize certain investors. RHUE Resorts is combating this by allowing the purchase of memberships through cryptocurrency or debit/credit cards. This allows them to appeal to the traditional market while also engaging crypto-enthusiasts.
Another example is the crypto project City DAO. The idea here is that a person can purchase a piece of land in Wyoming and sell rights of governance to interested parties. Those who want to be a piece of the government structure must obtain a certificate of citizenship via NFT. It’s important to note that citizens are not the owners of the land. They only make decisions regarding it, which includes policy changes and regulations.
Of course, in this kind of “government” structure, there are only so many memberships that can be purchased.
FlyFish Club (FFC) brings an interesting spin to the food industry. The private dining club hosts the world’s very first NFT restaurant that requires an NFT membership for dining access. Said restaurant will feature over 10,000 square feet and be in an “iconic location” in New York City. In addition, FFC NFT purchasers can enjoy “various culinary, cultural, and social experiences,” according to the FlyFish Club website. The project makes several big promises, however, it’s still in its infancy.
Great offerings and optimistic ideas
While NFTs and blockchain are opening doors in several industries, it’s still hard to tell which ventures are going to “stick.” Projects like City DAO have interesting ideas but have yet to provide anything concrete. On the other hand, companies such as RHUE Resorts are established and flourishing, providing luxury in real life immediately.
The blockchain looks to revolutionize numerous industries with the many efficiencies and advantages it has over traditional alternatives. Real estate has shown that it’s ripe for improvement and looks to be the perfect candidate to enter the world of cryptocurrency and NFTs.
SocialFi & NFTs: What This Means For Creators
DeFi continues to shake up the crypto world. GameFi is revolutionizing traditional gaming. But what about SocialFi?
A combination of social media and decentralized finance (DeFi), SocialFi is the latest Web 3.0 innovation. Short for ‘social finance,’ the approach empowers content creators, influencers, and digital users who want more control over data.
Social media platforms have grown to be one of the largest players in the Web 2.0 world. Research shows about 59% of the globe’s population uses social media. Unsurprisingly, data reveals digital activity rose dramatically amid COVID-19 lockdown periods. User behavior also shifted as people spent more time on social media, messenger services, and mobile apps.
Despite the massive popularity of platforms like Facebook, Twitter, and Instagram, many worries these social media giants have become too centralized.
Concerns are the entities and shareholders reap the rewards of content monetization. In short – worries remain that “if the product is free, you are the product.”
How SocialFi Aims To Break The Power Of Centralized Social Media
The building blocks of SocialFi aim to empower social media users to monetize brand equity, maintain digital data ownership, and foster a decentralized curation process where platforms can not unilaterally pick-and-choose content.
Programmable NFTs are one of SocialFi’s most useful tools. Acting as unique digital identifiers, users can customize their virtual identity and even sell and rent content as NFTs. For example, a SocialFi user could immediately convert an impactful message into an NFT with just the click of a button.
Many artists, creatives, and animators are heralding the arrival of SocialFi. Traditionally, these groups have found it very difficult to keep track of how their work is shared and used online. Digital piracy and manipulation also remain a large issue.
Influencers and creatives also struggle to cultivate their own brand identity on social media platforms and then monetize their brand equity to generate income. Traditional social media platforms have made it hard to translate social credibility into dollars.
With SocialFi, creatives can build brand equity with their own tokens, and even build a mini-economy surrounding it. Users can build subscription models in these tokens to unlock access to premium content.
Designers, painters, and artists who sell their work can easily track where it goes to ensure unscrupulous users are not trying to copy, steal, or manipulate creations.
Storytelling And The Power Of Creativity Within SocialFi
All of these factors help open up new realms of financial autonomy for digital users and cultivate stronger communities. SocialFi platform users can freely collaborate, post, and share information without pressure from higher digital ‘authorities.’
Many argue storytelling will propel SocialFi forward. This type of engaging and dynamic content inspires users to build and share ideas, concepts, and dreams.
Mittaria users collectively co-own the platform, which empowers creatives to share their world, with the option of working with professional animation creators to bring ideas to life.
Along the way, animation enthusiasts can meet, share, converse with each other, and spend time together within the community-first platform.
The Mittaria team remains committed to being one of the SocialFi forerunners by empowering creativity, promoting decentralization of assets and metaverse interoperability, and encouraging artists to produce and directly share content to earn money. Mittaria also plans to launch NFT collections that help users unlock various metaverse ecosystem benefits.
Those interested in Mittaria’s Genesis NFT can follow the project’s website for updates and details about how to mint and price. Keep up with Mittaria news and growth by following the Web 3.0 platform on Twitter and Medium.
Bitcoin in El Salvador – One Year Later
It has been one year since Bitcoin became legal tender in El Salvador. Crypto adoption has not been without issues in El Salvador, but it’s difficult to weed through the different stories about Bitcoin because there are so many competing interests promoting or FUDing Bitcoin. This article will filter through the nonsense and describe how Bitcoin in El Salvador has panned out one year after it became legal tender.
Why El Salvador Made Bitcoin Legal Tender
El Salvador made Bitcoin legal tender ostensibly for a few reasons. The government cited the following reasons:
- A significant portion of El Salvadorans receive remittances from the United States. Remittances from the US actually make up 20% of El Salvador’s GDP. Fees for wiring money to El Salvador are not cheap. Bitcoin transactions are cheap, so the El Salvador government made Bitcoin legal tender to reduce the fees citizens must pay for remittances.
- Approximately 70% of El Salvadorans do not have bank accounts. Transacting in Bitcoin can act as a sort of bank account.
- El Salvador uses the United States Dollar, which is suffering from fairly bad inflation at the moment. El Salvador moved to Bitcoin to hedge itself against inflation of the US Dollar.
The three reasons listed above are all the official reasons that El Salvador gave for making Bitcoin legal tender. There are likely other reasons for El Salvador to make Bitcoin legal tender that they will not say publicly, though.
It’s also important to note that USD is still legal tender in El Salvador. The country still mostly uses USD despite Bitcoin legal tender. Anyway, the next section will discuss the reality of Bitcoin use in El Salvador since the country made it legal tender.
Bitcoin in El Salvador – The Reality
This section will cover point by point the official reasons that El Salvador made Bitcoin legal tender and then describe the reality of the situation. First of all, remittances in El Salvador. Are Salvadorans using Bitcoin for remittances?
No, Salvadorans are not really using Bitcoin for remittances. According to information from worldcoinstats.com only 3.2% of all remittances are done in Bitcoin, which is pretty bad. Of course, no one expected this number to jump to 100% overnight, but it’s an underwhelming use compared to what many in crypto expected.
Next, are Salvadorans using Bitcoin for their daily transactions?
Again, not really. There’s no hard data on this figure, but it’s estimated that approximately 80% of shops in the country do not accept Bitcoin despite it being legal tender in the country. With that in mind, it’s unlikely that Salvadorans are using Bitcoin for most of their transactions.
This came as surprise because the Chivo wallet app (the official Bitcoin lightning network app of El Salvador) had over 4 million downloads when it was released. However, this is because new Chivo wallets received a free $30 deposit. The average salary in El Salvador is $12 per day, so $30 is a few days of work for many Salvadorans. Of course many would download an app for a free $30 when they make so little per day.
Finally, has Bitcoin served as a good hedge against inflation of the United States dollar?
Well, El Salvador bought approximately $100 million worth of Bitcoin over the past year at an average price of $45,000. The current price of Bitcoin is about $19,000. USD inflation currently stands around 8.2%, so El Salvador has lost more money by holding Bitcoin than it would have if it held USD over the past year.
Of course, Bitcoin is more of a long term thing for El Salvador, so it’s a little silly to declare this a failure after only one year.
What Went Wrong With Bitcoin in El Salvador?
As you can see from the above points, Bitcoin in El Salvador has not been the great success that many people expected. There’s not much reason to fear, though. It has only been one year since El Salvador made Bitcoin legal tender in the country.
The biggest problem with Bitcoin in El Salvador is that El Salvador picked probably the absolute worst time to make Bitcoin legal tender. They basically did it right at the top of the bubble and then proceeded to buy “the dip” anytime the price dropped – the problem was the price kept dropping.
Anyone that went all in on Bitcoin around that time would be down about 50% right now. It happened to plenty of people, but in the case of El Salvador it happened to the entire country. If El Salvador would have invested in Bitcoin a year or two earlier, then the country would be up 500% on its investment and many would declare it incredibly succesful.
This will likely occur if the price of Bitcoin rises again, which its expected to do after the Bitcoin halving. The problem with that the next halving is a few years away in 2024. Can El Salvador stay with Bitcoin for that long? Or will the country abandon the cryptocurrency before the price recovers?
The other problem with Bitcoin in El Salvador is that the government forced people to use it, which goes against a lot of the principles of cryptocurrency. In fact, is it even cryptocurrency at that point?
We would argue that it’s not really cryptocurrency if the government forces you to use it. The government specifically forced people to use the Chivo wallet app, which has a reputation for having a lot of bugs. And that has left a lot of Salvadorans with a bad first impression with Bitcoin because they associate all the bugs with the Chivo app as problems with Bitcoin.
This is still a relatively minor problem, though. The bigger problem was that El Salvador picked the worst time to invest in cryptocurrency, but it’s still worth mentioning the other problem with the current system in El Salvador.
To summarize, Bitcoin in El Salvador has not been very successful one year into the country making it legal tender. There is still no need to fear, though. Bitcoin is a long term project for the country, so if El Salvador can stick to their Bitcoin experiment, then they will likely see it become successful.
XDC Accelerates Network Expansion With LDA’s $50 M Investment
XinFin (XDC) Network, known for secure, scalable, and highly efficient blockchain use cases have received an investment worth $50 million from the global alternative investment group, LDA Capital Limited. The investment originated by leveraging a portion of the token from the XDC founder’s allocation.
Ritesh Kakkad and Atul Khekade, the co-founders of XDC Network, are certain that the collaboration will accelerate network adaption and real-world use cases. The LDA is seen as a strategic partner rather than just a financier. The XDC founders have competence in the LDA due to their proactive and strategic involvement in the network to improve the ecosystem.
“We’ve always looked for genuine strategic partners, not just funders, who can actively and strategically advance the ecosystem, while bringing utility to the network, and making XDC the preferred Layer 1 for institutions the world over–in LDA, we’ve found such a partner.”
The onboarding of LDA Capital benefits the XDC’s new ventures and entities focused on bringing in new retail and institutional members. The XDC’s smart contract-based initiatives have expanded dramatically since its introduction in 2019. It is anticipated that this new relationship would encourage the growth and development of Layer 2 projects inside the XDC Ecosystem.
Anthony Romano, LDA Capital Ltd. stated:
“LDA Capital is pleased with the developments made in the XDC Network by the XDC ecosystem. In addition to its funding, LDA will offer strategic counsel and support to help XDC Blockchain Network assume its position as a market leader.”
Apart from the macro-economic benefits, projects like DEXs, Metaverses, NFT marketplaces, oracles, decentralized email providers & cloud storage, payment dApps, and legal document repositories are all roots of XDC utilities. The add-on of LDA support will further intensify the expansion rate in the XDC ecosystem as a whole.
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