An onslaught of new technology terms is making the news: NFTs, Web3, gas fees, crypto wallet, and the metaverse. You may not think it impacts real estate or what you do. However, tech and business innovators are trying to apply this new technology to the residential real estate industry, and in some cases, they are succeeding.
Keep in mind that digital natives – Millennials who comprise the biggest segment of the home-buying population today and for many tomorrows to come – know and often use these new tech terms. That’s why Millennials and especially the next group of homebuyers, Gen Z, are likely to expect their agents to at least be familiar with them.
The trend of blockchain, cryptocurrency, and the metaverse is evolving, literally day by day. Tech Helpline, your go-to source of unmatched technical support to help you resolve your everyday tech problems, while not staffed with cryptocurrency experts, knows the value in gaining an early understanding of new and emerging technology. So, while remaining neutral on this tech trend and social movement, to bring you up to speed, here’s a quick primer.
10 new tech terms and what they mean
This is a digital, distributed, decentralized public ledger, meaning it is shared and duplicated across an entire network of computers that can record and track transactions with information that can’t be altered (immutable). This article explores ways that a blockchain can be used in real estate.
This is a digital currency that is tracked and verified by records maintained on a blockchain, a decentralized system, using cryptography versus a traditional currency, backed by a centralized authority (e.g., U.S. dollars and the U.S. Government). Popular examples include Bitcoin, Ethereum, Dogecoin, Binance, Tether, and Solana.
You must have a crypto wallet to access your cryptocurrency. Unlike a regular wallet that you use to store your cash, a crypto wallet is where you keep your private keys – passwords that give you access to your cryptocurrency.
With a crypto wallet, you can send and receive cryptocurrencies, depending on the currency you are using (e.g., Bitcoin or Ethereum). These wallets can be physical devices like a thumb drive or an online wallet accessible via an app or other software. You can learn more about crypto wallets, such as Coinbase, Electrum, Exodus, Ledger Nano X, MetaMask and Mycelium, here.
This stands for “decentralized autonomous organization” and is how cryptocurrency and NFTs are governed: a community organized around a specific set of rules enforced on a blockchain. It is an entity with no central leadership as it is collectively owned and managed by everyone who is a member. Through a DAO, a group of people enters into a contract with one another to reach a coordinated goal, such as collecting NFTs or predicting stock market moves. Read more about examples of how DAOs work here.
This is a payment you make to cover the computing energy required to process and validate a cryptocurrency transaction on a blockchain, such as Ethereum. Gas fees help keep a network secure, are a required compensation, and vary by the type of cryptocurrency used. Gas fees are calculated in real-time and can fluctuate throughout the day.
This virtual reality space allows you to interact with others in a computer-generated environment. This simulated digital environment uses augmented reality (A.R.), virtual reality, blockchain and borrows concepts from social media to create an alternative, digital world. For example, one digital real estate platform, called “Next Earth,” is marketing digital land in its metaverse, touting that they are cutting out the “middle-man.”
Another, Decentraland, just sold a $1.25 million digital property in its metaverse. And The Sandbox, an Ethereum-based NFT gaming metaverse, allows non-tech savvy users to create and monetize their own NFTs. According to CNN, someone recently paid $450,000 to move in next door to Snoop Dogg in The Sandbox.
Stands for “non-fungible tokens,” meaning every asset is unique. These digital tokens are created on the blockchain, just like cryptocurrency. However, cryptocurrency is “fungible,” meaning these assets, like all Bitcoin, are worth the same. Each NFT represents the ownership of a specific digital file, such as an illustration, photo, or video. Ownership is tracked and verified on the blockchain. While the digital art world – such as The Bored Ape Yacht Club – has dominated the sale of NFTs, real estate also is being tokenized.
Many NFT projects have a real-world component that comes with NFT ownership. For example, Propy, a real estate startup, is merging real estate with NFTs. It recently sold a 2,100+ square foot home in Gulfport, Florida, for $653,000 with the NFT as the proof of ownership.
This is an automated program stored on the blockchain that executes an agreement when all conditions are met. It eliminates an intermediary’s involvement, expediting the contract process. Smart contracts can automate workflow with the next action triggered when certain conditions are met. You can dig deep into learning more about smart contracts here.
This refers to any cryptocurrency that resides on an existing blockchain. Tokens are used to store value, for investment purposes, or purchases. You can read more about tokens here.
The internet you know and use every day is Web2. Major companies dominate how we share information on the web, primarily monetized by mining personal data. Web3 is entirely different. Web3 refers to decentralized apps that run on the blockchain; it allows anyone to participate and interact with others without monetizing personal data. You can read more about Web3, including its current limitations, here and here.
Many of these new tech terms may be challenging to relate to your real estate business today. But if you are a veteran agent, think how different the internet felt when you first discovered it.
Again, you don’t need to be an expert about NFTs or the metaverse or have a crypto wallet with Bitcoin. It is just beneficial to become familiar with these terms and their meaning. After all, 12% of first-time buyers sold cryptocurrency in the fourth quarter of 2021 to save for their down payment, Redfin reported. And that’s a trend that real estate experts say is likely to grow.
Finally, if you have an everyday tech challenge that you have been putting off resolving, perhaps it’s time to reach out to our friendly tech analysts at techhelpline.com. It’s a free service available to members of participating MLSs, associations, and brokerages.