Real Estate NFT: TechCrunch Founder Sells Apartment via Blockchain for the First Time

In April 2021, Michael Arrington, the founder of the online news portal TechCrunch, became the first person in the world to sell his apartment using a non-fungible token (NFT). The transaction was completed entirely via the blockchain and demonstrates the enormous application potential of technology in the real estate industry.

Recently, Michael Arrington, the founder of the online news portal TechCrunch, auctioned off his apartment as a non-fungible token (NFT) for the first time, taking the first step towards revolutionizing the world of real estate.

Fast Forward from CryptoKitties to Buying a House

But first, let's start from the beginning: What exactly is an NFT, and what do kittens have to do with it? Non-fungible tokens (NFTs) are cryptographic tokens that are stored on the blockchain. Unlike fungible tokens, which can exist in multiple identical types and be exchanged (e.g., Bitcoin), NFTs are of an individual nature. They cannot be exchanged or replicated. NFTs first became known to the general public when CryptoKitties were launched in 2017. These are virtual kittens which can be collected and traded using NFTs. Today, NFTs trade everything from digital art to virtual land parcels.

Tokenization Merges Digital World with Reality

With NFTs, virtual assets can therefore be traded over the blockchain. But what does this have to do with real-world assets? This is where tokenization comes into play. Tokenization is the creation of digital replicas of real assets. A specific item is certified and digitally represented in the form of a token. Tokenization promises numerous applications in the financial world. Since tokens can be created for arbitrarily small units, even small investors will soon be able to invest in luxury goods. Moreover, trading over the blockchain largely renders intermediaries such as banks or insurance companies obsolete, which is why the costs of financial transactions are expected to drastically decrease.

Real Estate World is Shaken Up

It is this technique of tokenization that Arrington used when he auctioned his apartment in Kiev as an NFT in April 2021. The transaction was handled via the blockchain-based real estate brokerage platform Propy. The real estate startup, founded by entrepreneurs Natalia Karayaneva and Denitza Tyufekchieva, has set the automation of real estate transactions as its goal, utilizing blockchain technology to achieve this.

Being Columbus for 20,000 US Dollars

A fortunate bidder not only acquired a studio apartment located in the Svyatshino district of Kiev featuring a kitchen and bathroom but also made history. The starting price for the auction was just 20,000 US dollars. But how did the sale go? At the time of the disposal, the Ukrainian property was owned by a US-based Limited Liability Company (LLC). The rights to the LLC were then tokenized in a non-fungible token belonging to Arrington. To transfer ownership of the company, Arrington had drafted legal documents prior to the auction. With the acceptance of the bid, the auction winner was then transferred the NFT and thus ultimately also the ownership of the apartment. In return, Arrington received the purchase price in the form of a crypto payment.

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