What is Web3? What is NFT? How to buy a house? What is blockchain? How to buy an NFT? Are NFT legal? Which platform offer NFT? Is NFT regulated by SEC

History First - How a Real House Sold as a Digital Asset in form of an NFT

A real 3 bedroom house, located in Columbia Sout Carolina, has become the first on-chain house to be sold as a non fungible Token (NFT), for $175K, reported unusualwhales.com. 

The rental property "was sold on the Roofstock onChain NFT marketplace by transferring the Home onChain identity to an Ethereum address owned by the house buyer Adam Slipakoff," Unusual Whales reported.

How did the transaction transpire?

The term “Non-fungible” implies something unique and can’t be replaced with something else. A simple example would a one-of-a-kind trading card. Once it's traded, the user gets a different card. In this scenario, Roofstack, a real estate platform had the property listed on its blockchain by a limited liability company (LLC), as an NFT. When the NFT is purchased, the ownership of the digital asset, representing a physical asset, is transferred to the owner. 

In more techy terms, the "physical" property located at 149 Cottage Lake Way, Columbia was listed and sold on the Roofstock onChain NFT marketplace, by transferring the Home onChain identity to an Ethereum address owned by the house buyer Adam Slipakoff. According to Adam Slipakoff the process of acquiring his new property using NFTs was less cumbersome than the traditional mortgage process. 

Is this Legal?

NFT trading has now been around for sometime now and there are several platforms that allow for buying and selling these digital assets. In summary, there is no definitive answer to this question yet. 

According to this law.com report, "NFT Boom: What Are the Regulatory and Enforcement Risks?", Federal law requires businesses involved in the exchange of “value that substitutes for currency” to comply with money laundering regulations, but some regulatory lawyers are skeptical that NFTs, as they are being used right now, would fall under that classification. 

The report further suggests that Securities and exchange commission (SEC) if/when NFT's can qualify as a security. Although the SEC hasn’t yet issued guidance on the subject, lawyers generally think the vast majority of the NFTs, as they are currently being used, would not be considered securities. 

What happens next?

As the next evolution of technology happens - which is now dubbed as Web3 (Read: What is Web3?), rules and regulations will continue to evolve. For now, NFT sale of this house in Columbia, marks an era where the lines between digital and physical assets are starting to blur. This also signals a demand by consumers to access channels which reduces overhead to industries that are marred by high fees and complexities.