I worry that physical assets can not be secured by encryption. This is exactly why pegging a crypto to something like gold makes it less secure and less valuable, even if common sense says otherwise.
The only way to truly secure things in the physical world is with potentially lethal force. The threat of lethal force is usually enough to stop citizens from fighting back 99% of the time. Fear of death is a powerful motivator.
Within this context we can see that we can't evict someone from a property just because someone signs the order with a private key. There is no way in hell society will allow hackers and scammers to just steal property in the same way they would rugpull a shitcoin or hack a metamask wallet.
Obviously the enforcement of these things would have little to do with the actual NFT, making the NFT worthless unless it existed in some kind of insane code-is-law crypto city state. I could only imagine something like that working in a society of true abundance where losing the house you live in wouldn't be that big a deal.
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The bigger problem to me is settlement. If you are using crypto tied to gold, eventually you have to settle. That means transferring the physical commodity to another part of the world.
If that isnt done, then you are pegging it to "paper" which changes things entirely.
The idea of commodity backed money is foolish and a myth people buy into like Santa Claus.
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Ultimately, you have different stages (and phases). Crypto tied to real estate is no different than anything else we have. What is a company? It has plants, offices, and other assets. Yet how do we own it? Based upon a piece of paper (Articles of Incorporation) and shares of stock that are supposedly in our trading account.
So if we try to think of this as all or nothing, then we get exactly what you describe, something that is at odds with itself.
How do we know who owns real estate today? How do we protect it? That isnt going to change anytime soon other than the ownership and accessibility.
Of course, if you own a downtown office buiding and there is no police force, well then you might have an asset that is diminishing in value as it gets destroyed.
Whether that is tokenized or not is has no bearing on it.
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