GULFPORT, Fla. — In a historic first in the United States, a home in the Tampa Bay area sold on Thursday as an NFT.
Last year, a California real estate broker tried and failed to sell a duplex as an NFT. But, this week's successful auction of a Gulfport, Florida, house marks a first in American real estate.
NFTs, or non-fungible tokens, are unique and irreplaceable digital assets. They're purchased through online transactions.
If you're wondering how a house – which is physical – could be sold as a digital asset, don't worry. We've got you covered.
Basically, the NFT was digital paperwork for the rights to a limited liability company, or LLC, that was created for the house. So, the buyer gets the rights to the LLC and, by extension, the literal home itself.
The winning bidder bought it using cryptocurrency.
The house sold for 209 Ether, according to Amy Heckler. She is the president and broker for Heckler Realty Group, which was in charge of selling the home.
Heckler says that amount of Ether was the equivalent of $631,790. She says the home was originally bought in 2020 for around $250,000.
Experts say to think of NFTs much like one-of-a-kind collectibles like original baseball cards or original paintings that cannot be replicated.
"NFTs are digital representation," Gabe Higgins, a Blockspaces co-founder said. "You’re able to own a digital asset that is unique."
From digital art, to video or audio clips, Higgins said pretty much anything can be sold as an NFT.
Ownership of one's NFT is then stored on a digital ledger known as the blockchain.
"You can actually verify the ownership of a digital item," Higgins said. "Before, we weren't able to capture that."
Higgins said the hope is by having a unique digital asset, value for that specific NFT goes up; and people can claim personal ownership to that specific NFT.
Despite growing popularity, Higgins said it's still uncertain how the market will respond to the presence of NFTs.
"It is interesting to test the waters in ways we can utilize this technology," Higgins said.
Heckler previously said the benefit of selling a home as an NFT is it allows for a much faster process of transferring ownership to the buyer.
In 2021, an apartment in Ukraine became the first known property in the world to be sold as an NFT. You can learn more about NFTs by clicking here.