Yet another brilliant group is attempting to combine NFTs with a pre-existing system in a manner that adds more or less nothing of value. The Spectrum is a South African property development based in the Western Cape. The concept behind it is ‘purchasing an apartment but with added NFTs’.
The development is offering 306 units across ten floors in a property located just off Nelson Mandela Boulevard in Cape Town. Of these, micro, studio, one-, and two-bedroom units will be available. But, as mentioned, you’ll need a crypto wallet as well. The thing is, we’re not really sure why.
Getting on The Spectrum
The development itself makes sense. It’s being designed and administered by actual companies who appear to know what they’re doing. The Spectrum has also allied itself with Momint, a reputable South African NFT marketplace (for what that’s worth). The entire project has been properly thought out. But adding NFTs to the mix doesn’t appear to add any sort of utility.
NFTs are links that you can pay for. They’re receipts that you save because they say you “own” the item that they point to. That item can be changed. If the blockchain it is stored on is shuttered, you’ll find out just how fungible that token actually is. They have some utility when storing important information but mostly they’re an inconvenient version of preexisting items or concepts. It’s hard to see how an NFT improves buying an apartment.
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That’s because, by and large, it doesn’t change anything. The Spectrum’s outline for how its NFTs will work involves the same steps you’d normally take when purchasing a property. Apply, agree to the sale, pay for the thing. And then there are extra steps. The first is when the developers “…send you your unique NFT for the apartment you have purchased close to the development’s completion date”. The second is a nebulous one — “You can use the NFT for ongoing benefits and uses within The Spectrum development upon completion”.
What these benefits are isn’t defined. Apparently the NFT “…grants the holder with the right to purchase a specific unit at The Spectrum”. Only the signed sales agreement and bank funding have already taken care of that. There are also “…token airdrops, exclusive access, discounts, and more”, at a later point. The future token, whatever is being accessed, or what discounts will be available all remain mysterious. Probably because there are no deals backing this to-be-minted non-fungible token yet.
Think about it
This Cape Town development makes three specific claims about how NFTs could change the process of buying property. They are:
Intermediaries, like the deeds office, become irrelevant
Property investing becomes more affordable through fractionalisation
The process of buying & selling property is faster and requires little admin
A little thought shows how little these points mean, however. Those using NFTs might consider the deeds office obsolete but the office itself, a government entity, will probably disagree. Fractionalised property investing makes sense if you’re clubbing in to rent a property out. Otherwise, it’s just a timeshare with extra steps. And buying and selling property — the most expensive asset most of us will ever own — is complicated for a reason. If someone can siphon your house from your crypto wallet (a situation The Spectrum’s FAQ addresses), being able to flip it as soon as someone drops enough Bitcoin in your wallet doesn’t mean much.
The Spectrum’s property development may or may not be a success. The building itself almost certainly won’t have more than the usual issues pertaining to construction and quality control. But crowbarring an NFT purchase into the whole deal is suggestive of the Polium One game console. So little is defined that the whole endeavour comes across as utterly pointless. The NFT could be replaced with anything — a piece of paper. A barcode. An RFID chip. A small goat. Literally anything fungible could replace the technology and nothing about the deal would have to change. Which illustrates the whole problem with NFTs, really.
