On February 10, 2022, the first NFT-based property was bought through an auction on Propy, a blockchain-focused real estate company. The Florida home was sold for $653,163 worth of Ether, and the home’s property rights were minted as an NFT on the blockchain as a digital representation of ownership over the physical real estate. (See our previous blogs about NFTs here and here). This is significant for many reasons and has the potential to significantly disrupt the way that the real estate industry has historically functioned. As mentioned below, while other real estate transactions have already occurred utilizing blockchain technology, this is the first US transaction where the ownership of the real estate asset was minted as an NFT and then sold on the blockchain.
What is blockchain? At its core, a blockchain is a distributed ledger for recording transaction data. A ledger is merely a list of transactions. Traditional paper-based ledgers include consecutive pages where each line records a transaction and when the page is full, the process repeats on the next page. With many blockchains, each “block” is like a page. Transactions are verified and written into a block and, when the block is full, a new block is created. Unlike traditional ledgers, when a block is filled, the system creates a hash value, which is just a random number generated by an algorithm based on the contents of the block. This hash value is then written as an entry in the new block, thereby “chaining” the blocks, hence the term “blockchain.” If someone attempts to change an entry in a prior block, the hash value would no longer match what was written into the new block and that attempt would be deemed invalid. In part, this is how blockchain creates a secure and unalterable record. As discussed below, the application of utilizing the blockchain for a real estate transaction is a logical progression.
Continue reading: https://www.jdsupra.com/legalnews/blockchain-technology-is-changing-the-1791259/
What is blockchain? At its core, a blockchain is a distributed ledger for recording transaction data. A ledger is merely a list of transactions. Traditional paper-based ledgers include consecutive pages where each line records a transaction and when the page is full, the process repeats on the next page. With many blockchains, each “block” is like a page. Transactions are verified and written into a block and, when the block is full, a new block is created. Unlike traditional ledgers, when a block is filled, the system creates a hash value, which is just a random number generated by an algorithm based on the contents of the block. This hash value is then written as an entry in the new block, thereby “chaining” the blocks, hence the term “blockchain.” If someone attempts to change an entry in a prior block, the hash value would no longer match what was written into the new block and that attempt would be deemed invalid. In part, this is how blockchain creates a secure and unalterable record. As discussed below, the application of utilizing the blockchain for a real estate transaction is a logical progression.
Continue reading: https://www.jdsupra.com/legalnews/blockchain-technology-is-changing-the-1791259/
