Buying real estate with little capital? NFT and Tokenization

Until recently, NFTs were just funny pictures of apes, bears, or other pixelated characters to us. The somewhat caricatured form in which non-fungible tokens took over the market lulled more conservative investors into a false sense of security—they simply didn’t take this innovation seriously. In the short term, that may have been reasonable, but the initial image of NFTs can distort our vision of the future of this innovative technology. It’s like dismissing ebooks at the dawn of their existence—we now know just how popular they’ve become.

Similarly, this can be the case with non-fungible tokens, or Non-Fungible Tokens (NFTs). Contrary to popular belief, these tokens don’t have to be linked exclusively to pixel art—or even art in general, even though that’s the market where NFT technology was first tested. In reality, the use of non-fungible tokens is much broader.

NFT tokens as proof of ownership

If the essence of this innovation could be summed up in two words, they would be “rights” and “ownership” – or “proof” and “ownership.” An NFT token is precisely a digital proof of ownership, and not just of digital assets. Already during the last bull market of 2021-2022, NFT startups were experimenting with non-fungible tokens (that is, indivisible, non-replicable, one-of-a-kind), which could be exchanged for physical items – for example, T-shirts.

However, the possibilities offered by this technology go far beyond T-shirts, mugs, or various other trinkets. Since an NFT token is impossible to counterfeit, it can be applied in many areas. How about an NFT-based identity card? In this case, the data stored in the token would not be visible to unauthorized individuals, while the authorized token itself would confirm that “we are who we say we are.” Let’s also go back to those two earlier words – proof of ownership. An NFT can serve as a digital proof of ownership of anything. What could that be? For example, real estate.

Tokenization – real estate investments accessible to everyone

It’s about asset tokenization and the ability to fragment goods that, until now, have been difficult to divide into smaller parts. For example, real estate typically has a high entry threshold for small investors—it’s not common for someone to buy, say, just 1 square meter of an apartment. It’s all or nothing. NFTs change that. Asset tokenization changes that. Thanks to tokenization, a single 100-square-meter apartment can be split into 100 parts, each represented by an individual “ownership” token.

Such a solution not only opens up investment opportunities in markets that were previously reserved for wealthier individuals, but also provides an additional way for entities seeking capital—such as developers—to raise funds. The entry threshold is lowered, which releases small-scale capital—small, but a school of small fish can be more powerful than a whale.