NFTs are subject to many criticisms. If we have already demonstrated the smoke and mirrors around the NFT pollution, we still have to demonstrate their usefulness. With the end of third parties, access to property, collections, NFTs will prove to be very useful in your daily life. “Innovation: always dangerous” said Gustave Flaubert, is dangerous something harmful of dreadful. But NFTs are not dangerous. But what are they good for then? And if we start to understand the impact of non-fungible tokens in web 3.0, metavers and video games, how would they impact the life of everyone? Real estate, collections, automotive recently with Alfa Romeo, examples of practical and useful applications of NFT already exist.
Physical property dematerialized in NFT
Since December 15, 2021, the otis platform offers its customers to mint (produce on the blockchain) NFT. These NFTs allow to become the owner of a real collection object. This in complete security, since all NFTs are secured with the SEC.
The company puts on sale and then insures the object. Then it puts the ownership contract online in the form of an NFT. Of course, you are free to exchange your property on classic platforms like OpenSea and Looks Rare. From then on, you are free of any logistic constraint, goodbye to the questions of preservation, security and moving your rarities.
And if you wish to recover your property? The company sends it to you and destroys the token. In the same vein, Blockbar is a start-up that offers to invest in whisky bottles via NFT property titles.
Real estate is also poised to follow a paradigm shift. For example, the startup propy has started an auction to sell a house as a non-fungible token, with an entry price of $650,000. On this occasion 1,500 people had registered for the auction.
The company announced that they had developed all the necessary smart contracts as well as the legal framework. This allows them to tokenize any American property. The property rights are mined in NFT, and then the token holder holds the property via the American equivalent of an LLC (limited liability company).
NFT’s will therefore be designed to dust off the real estate business, making it faster, more transparent and therefore more accessible.
NFTs in everyday life: fast, transparent and tamper-proof
The automotive brand Alfa Romeo belonging to the Stellantis Group has just announced the integration of NFTs into its upcoming hybrid car. The NFT that will be generated will be a certificate of record of maintenance data. This crucial information for any buyer will obviously only be recorded if the repairs are operated by certified repairers.
The bridges between blockchain and the automotive world are growing. As usual the idea of integrating these NFTs is to bring transparency to the market. Thus, it allows to separate from a potential trusted third party, facilitating the steps of the market players.
NFTs: a new economic order
The tokenization of real estate, collectibles, and the availability of goods on recognized platforms, limit the obstacles for new players. Not having the technical and financial means, or not knowing how to penetrate these markets, they will now be able to access them without difficulty. The NFTs will then allow a better homogenization of the markets because the number of buyers and sellers would increase.
This new homogeneity would theoretically allow supply to better find its demand. According to the classical theory, the market would be more efficient, and this would lead to a better distribution of wealth.
With the example here, of the NFTs integrated into the automobile, the asymmetry of information that has negative consequences on the markets is eliminated: moral hazard and adverse selection.
In short, adverse selection is when you buy car A for 1500€ instead of car B for 2000€. But car A is faulty and you didn’t know it. Thus George Akerlof, in his 1970 book “The market for “lemons”: Quality, Uncertainty and the Market Mechanism”, explains that asymmetric information leads to a selection of bad cars to the detriment of good cars. Ultimately, the used car market retains only the bad cars.
With the integration of NFTs into the objects sold, the market would provide everyone with the same information without the intervention of a third party. This would put an end to adverse selection.
This is only a non-exhaustive list of the first examples of the use of NFT in real life. Obviously, these examples are bound to multiply. But one thing is certain, crypto-currencies will bring changes in our daily lives.
