It seems to me that there's going to be an unbridgeable gap when it comes to physical property. If someone hacks my wallet containing my "house NFT" and transfers it to themselves and I can't hunt them down and force them to return it, who owns the house? How do I sell it, if I don't have the NFT? Can I go get another NFT minted, and who from? How does the buyer know that this newly minted NFT represents the true ownership and the old one doesn't?
Suppose I die taking my wallet keys with me; how do my heirs inherit my NFT-ized house?
If the government is minting these NFTs and deciding which transfers are legitimate and which aren't, why are we bothering with all this?
Basically: at some point, an NFT will become separated from the ownership as recognized by the people who count (banks, governments, etc). Without a mechanism to reunite them, the NFT is not very useful; but if there is some sort of mechanism, it's really that mechanism that determines ownership, not the NFT and you might as well use a centralized ledger.
One easy way to resolve all of these problems is to build an escape hatch in the contract so that in the case of theft, loss, or other special circumstance you can invoke arbitration and mint a new token if needed.
It’s important to understand that these tokens aren’t going to replace the existing legal system (much though the anarchist/libertarian wing of the crypto community might wish it). They just enable certain transactions to occur with lower overhead and time delay. This is about improving friction in the happy path, not providing new solutions for every conflict case.
Personally I don’t think there is a reason to put your primary residence one the blockchain (you don’t trade it that often). But it’s interesting for places where you might want to trade assets at higher frequency (eg micro loans, supply chain finance, etc) and maybe there is a real-estate trust angle too.
When I read about smart legal contracts, all I can imagine is Google's live-staff customer support combined with government flexibility. Is this the future we want?
