By Chris Reid

There’s a principle called Amara’s Law that’s worth bearing in mind when considering any digital trend. It’s a simple one, and states that we tend to overestimate the effect of new technology in the short run, and underestimate it in the long run. As soon as any new platform or possibility emerges, there’s a rush to apply it to everything and anything, but it we have to wait for the initial hype to burn away to see what’s left. NFTs (Non-Fungible Tokens) fall into this space right now. Even though the first one was created in around 2014, they only properly entered mainstream consciousness in 2020. The idea of owning digital assets had been simmering for a while already, but this three letter initialism seems to have been the mass tipping point – especially now that it is being applied to virtual property.

Over the last year or so, NFT real estate has become a hot topic. In this case the NFT itself is the title deed, and the artefact is the digital ‘place’. There are a range of different platforms you can choose from, like Minecraft, Roblox and Decentraland, and like any other development they’re usually broken up to a set number of plots, each of which is tied to an NFT. And that’s where the first caveat comes in. There’s no one single neighbourhood. There are a whole country of boomtowns, so you’re not only investing in the online vs the physical, but the platform it’s on too.

(As an aside to all this – an even newer trend in this space also worth noting is the sale of real world houses tied to digital tokens. In this case the NFT marketplace simply becomes the platform to list and purchase property with cryptocurrencies. The actual registration and transfer does, for now, still need to go through a traditional deeds office as before. It’s not quite as sexy as a CGI home, and it may annoy some purists because it’s difficult to separate physical and virtual value, but this could open up the property market in a whole new way. But back to the digital homes…)

Alex Coetzee_'Tjommies (The Musical)'

The fact of the matter is that NFT property seems to be a growth industry. There are metaverse real estate agents, investment funds and even starchitects like Zaha Hadid’s firm are getting on board. Much of the public interest comes from concept art and digital renders because it fits with our vision of a Matrix-like future. Designer Krista Kim was widely covered last year for what was pegged as the first sale of an NFT home (and for over $500,000 at that). And the truth is that designing digitally does open up a host of possibilities. If you don’t have to follow the laws of physics, you can create incredible spaces that would be impossible to execute in reality. Plenty of architects get frustrated by practicality slowly diluting their concepts, so this allows for building in a perfect world.

This all being said, it’s important to distinguish between an NFT that takes the form of a virtual building and one that stakes a claim to digital property. They’re both asset ownership at the end of the day, but it’s the difference between owning an original Frank Lloyd Wright sketch and living in one of his homes. Speculative visualisations are beautiful and fantastic. Actual NFT neighbourhoods are mostly underwhelming as we wait for the technology and platforms to catch up.

Missana Bamboo Collection

NFTs are ultimately about ownership, not design. Their value lies in the record on the blockchain – the virtual villa or picture of a disaffected monkey is only the representation of it. Not that investment-level art and property is much different. When you’re purchasing a home in an upmarket neighbourhood, you’re not buying the bricks and plaster or the layout, you’re buying the address. NFTs cut to the chase and say the quiet part out loud.

So, NFTs are potentially more interesting as a way to talk about our relationship with design than being a specific aesthetic to bank on. And there is an argument to be made that NFTs have yet to do anything new with their form anyway. Where will it all even out when the pixels settle? The metaverse has to fully resolve before that question can be answered. But until then, there’s nothing wrong with thought experiments and a little online house hunting.

This all being said, it’s important to distinguish between an NFT that takes the form of a virtual building and one that stakes a claim to digital property. They’re both asset ownership at the end of the day, but it’s the difference between owning an original Frank Lloyd Wright sketch and living in one of his homes. Speculative visualisations are beautiful and fantastic. Actual NFT neighbourhoods are mostly underwhelming as we wait for the technology and platforms to catch up.