NFTs – short for the concept of non-fungible token cryptocurrency – have reached the level of mainstream market madness. But they were still largely limited as object of experimentation in business real estate. A new startup is trying to do more with the concept.

Hamilton Souther, Randall Johnson and Nathan Windsor, co-founders of the LiquidEarth company, supposedly launched in the third quarter of this year, in a guest post on the Nasdaq argued for a full combination of real estate with NFTs. “Global innovators have turned their attention to the real estate sector as the next NFT opportunity,” they wrote. “This fusion of the world’s oldest and newest asset classes could very well prove to be the greatest utility for NFTs, and also the next step in the evolution of real estate.”

In CRE, interest seems to have shifted mainly towards tokenization which facilitate co-ownership and the marketing of real estate. The idea is that automating a process for people to buy shares in a building or portfolio would mean a larger market of potential investors, which should drive up interest and prices. Tokenization and fractional ownership could also eventually mean greater and easier liquidity, a benefit for investors of all sizes.

Not so with NFTs, the LiquidEarth trio acknowledged, calling them “non-divisible and non-fungible assets.” They can only have one owner at a time and are not tradable.

“In its current state, the real estate industry relies heavily on brokers connecting buyers and sellers,” they write. “The transfer of ownership takes time and requires a lot of paperwork. Moreover, the real estate sector is fragmented and buyers are limited by geographical borders. This increases the difficulty for international property buyers.

Certainly, and having the ability to discover properties and process transactions online could help increase the availability and visibility of CRE assets. These assets could potentially be placed as collateral for loans, such as was made in crypto mortgagesat least with cryptocurrency.

Where the authors err is in the following: “Although initially considered a passing fad, NFTs have rallied around all speculation and established themselves as a viable asset class. . While NFTs have significant use cases in the arts, finance, and entertainment industries, their integration with real estate is what ultimately represents the biggest real-world use case. This integration brings much-needed credibility to NFTs as an asset class. Older and newer asset classes can come together to create a plethora of new opportunities. »

The value comes not from the NFTs themselves, but from the assets they represent. They’re a useful transfer mechanism, but don’t seem to have any intrinsic value themselves, even with all the wild speculation that’s been going on. In that sense, they may have something to offer in real estate, but it will have to be utilitarian without mistakenly confusing a tool with the real asset – a property itself.