Digital Ownership Will Soon Be More Important Than Physical Proof

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When Bitcoin was created 12 years ago, no one knew that it would change the world. No one had faith, and some people who bought the coin at a dollar immediately sold it when it reached 10 dollars.

Who could blame them? Having your investment 10x in just a couple of years is amazing, and it makes perfect sense to divest at that point.

Of course, everyone knows how that ended. Bitcoin is currently worth around $40,000, which is a lot more than ten dollars.

We are kind of in the same situation with NFTs today. The NFT space only really started to grow in 2017 and now, especially with the introduction of the metaverse, it looks like we are still in the earliest days.

But why are NFTs so revolutionary? Why is the space expanding so quickly, and why are people paying so much attention and money to a few ugly JPEGs?

There are a lot of answers to that question, and even the biggest NFT holders have different answers to that question. However, all of those questions boil down to one important fact; NFTs are revolutionizing what we mean by “property” the way Bitcoin revolutionized what we mean by currency.

The problem with real-world assets is that possession is 9/10ths of the law.

Having an item in your hand is ‘as good as owning it,’ and is often as much proof as you can get of having ownership. If someone steals it, it’s theirs now, and the fact that they are now holding it is proof of that. There’s not much you can do.

There was a fun story about a girl who had her bike stolen and found it for sale online. Then she pretended to be a buyer, took the bike for a test ride, and rode away.

Notice how she didn’t confront the new owner. She could have said, “Hey, that’s actually my bike,” and if real-life ownership made any sense, he would have had no choice but to return it to her. If she tried to take it, he might attack her.

On the other hand, he probably wouldn’t attack her to take the bike in the first place. They both know it is her bike, but the context of the situation changes how they view ownership.

Even physical documents can be copied and forged. NFTs, however, cannot.

NFTs And Real-World Assets

Right now, a lot of NFTs are cool artworks. Sure, there are a lot of interesting programs out there that have a bigger scope than just "cool drawings", but the space is overwhelmingly populated by cool drawings.

That's why it's easy for critics to argue that NFTs are a mere fad that the copy and paste function will soon render meaningless. That is a bold argument, but people who make that argument fail to see past the fact that NFTs aren't the digital art themselves. They are essentially just a certificate of ownership of a particular property.

And that property can be anything.

Once we understand that part of NFTs, it opens a whole new world of possibilities. One interesting space where NFTs may prove to be an extraordinary factor is fractional property ownership.

House owners, if they wanted, could sell a part of their property on the blockchain by tokenizing it by issuing NFTs.

Right now, in states like the US, it's usually difficult to sell houses at the right price. But NFTs could solve that by creating a market where hundreds, or even thousands of investors, could purchase fractional tokens of a house, and then hold those tokens and receive a fractional percentage of the rent on the house via the blockchain. Witly is doing something like this and is one of the first of its kind.

This would dramatically open up both the world of real estate and investing to a lot more people. It would also do more to liberalize the investment and real estate market than any government policy has ever done.

NFT and Markets

It's almost inevitable that the popularity of NFTs will give rise to a new kind of market. Yes, there are already markets that buy and sell NFTs, but these markets are mere NFT exchanges.

The idea of the metaverse has given NFTs even more wings to fly, as it's only logical that a digital world would require digital assets. And what better way to buy and sell digital assets aside from NFTs?

If NFTs will be predominantly used in the metaverse, it's only logical that there will be a market in the metaverse to sell NFTs. As usual, there are already several people ahead of the curve on this, and they are already building such a marketplace.

One promising project is the Metamall project as it allows people to meet, shop, play, and trade both crypto assets and NFTs.

But that's not the only kind of market NFTs might be taking over. They might just be changing what we understand by the labor market as well.

The H3RO3S project, for example, is challenging our understanding of human capital by creating a platform to connect talent with jobs, and offering them payment in tokens. The project is mainly targeted at students and hopes to create a play-to-earn system where students can complete tasks for fellow students, and earn tokens easily.

The Foundation Must Be Decentralized

In a manner of speaking, the real world is decentralized. Nobody owns the concepts that construct our reality. As mentioned in the anecdote at the beginning of the article, if I’m holding an object, it can be reasonably assumed that it is mine. From there, I can carry that object into my house and lock the door.

In crypto, there is a saying: “Not your keys, not your crypto.”

What this means is that if you don’t have custody of your own private key, you are at the mercy of the platform that does have custody over it. If a centralized exchange goes down, your crypto goes with it. Only a hard wallet can be truly safe and secure in the current Web3 environment. Centralized platforms can be dangerous, and even decentralized platforms can become centralized.

This is because the foundation of Web3 isn’t widespread enough in its current state. We need larger, more decentralized networks. Bitcoin is one of the strongest, most decentralized blockchains, but even Bitcoin has extremely large mining pools and token holders.

One of the biggest infrastructure companies in Web3, Ankr, is already Binance’s main infrastructure partner and is heavily relied on by Polygon as well. With the largest global enterprise-grade node network, this project aims to become the decentralized node network for every blockchain. The good thing is, this project is a protocol, not a service. Web3 needs protocols that can be accessed by anyone at any time, not middlemen gatekeeping vital infrastructure needs.

It's still early days, of course, but it looks like the most advanced markets of the future will be in the metaverse, and the most advanced markets will trade in crypto and NFTs. NFTs will transform the way we think about ownership, and it seems inevitable that they will also transform the way we think about so many things as well.