The first time most Canadians heard the term “non-fungible tokens” was likely after a recent blockbuster Christie’s auction for a piece of digital art. However, experts expect the technology to move far beyond the art world into everyday life – though nobody knows for sure how they will be used.
NFTs – which are essentially a tool that uses blockchain technology to provide proof of ownership of a digital asset such as an image, audio clip or a tweet – are currently a fringe item used primarily by tech enthusiasts and artists, but experts say potential uses for the tokens are nearly limitless, including the proof of ownership of assets such as cars, real estate or just about anything of value.
A non-fungible token is certified on the blockchain (the same technology that ensures the security of cryptocurrencies like Bitcoin), and whoever owns the NFT is deemed the original owner of the asset.
Earlier this year, a digital collage by the artist Beeple fetched a final bid of over US$69 million for digital ownership through an NFT. And Jack Dorsey, the CEO of Twitter, auctioned his first-ever tweet as an NFT, with the final bid coming in at US$2.9 million.
But experts say there’s more to NFTs than art and online memorabilia.
“There’s literally no limit,” said Andreas Park, an associate professor of finance at the University of Toronto who specializes in blockchain technology. He said the advent of NFTs could change how we think about ownership, the same way the internet changed how we consider communication and commerce.
“There’s a large variety of ways we can use this in the digital world, some of these I can’t imagine now,” he said. “It’s like the internet – people couldn’t really envision any way you could use it profitably for a while, and then all of a sudden we came up with a lot of solutions like paying over the internet.
“You could tokenize almost anything if you have a legal structure that would have a formal guarantee for something that isn’t living in the digital world that can be linked to a token,” he added.
With a legal framework, Park said NFTs could be used to signify ownership of a car or a piece of real estate. With self-driving cars in the future, an NFT could be used to designate shared ownership of a car and show what percentage is owned by each party, since people may not need to own the car 100 per cent of the time.
Amy ter Haar, a blockchain consultant and a lawyer with Osgoode Professional Development in Toronto, predicted that NFTs will become like a deed of electronic ownership, and the integrity of the system will be maintained by the fact that the blockchain is a secure and generally unchangeable digital record.
“It can create this permanent immutable record of who owns anything,” said ter Haar.
Both ter Haar and Park agreed that questions remain around regulatory oversight of how NFTs are created and transacted.
However, ter Haar compared NFTs to the introduction of paper money. She said people found it difficult to imagine how paper money could hold value after trading with gold for so long. But people soon realized that if society deemed the paper valuable, then it was so. The same, ter Haar said, will be true of the value of a digital asset in NFT form.
Park said government involvement could be close in the future, especially as blockchain was mentioned multiple times in the Chinese government’s recent five-year plan, which heavily features technology investments.
In the Western world, Park said tech giants like Facebook are also investing heavily in blockchain in conjunction with other corporations such as Shopify and Uber.
“It’s another component of digitizing society,” said Park.
“It’s important to think beyond what we already do have and what (NFTs) can do – they can do something you’re already doing (in creating a record of ownership), but better, and the use cases will come.”
Canadian home prices on fire and policymakers using ‘squirt gun’
By Julie Gordon
OTTAWA (Reuters) -Buyers are turning up the heat on Canada‘s searing hot housing market, their frenzy leading to record sales, prices and starts, but in a budget unveiled on Monday the federal government did little to tamp down the fire.
The Teranet-National Bank Composite House Price Index showed home price gains accelerated 1.5% in March from February, data released on Tuesday showed.
The index was up 10.8% on the year, with a record 81% of the broader 32 markets surveyed posting annual gains above 10%. That far exceeds the last peak in 2017.
On Monday, Finance Minister Chrystia Freeland, presenting Canada‘s first budget in over two years, fleshed out a previously announced tax on foreigners parking money in Canadian homes, along with limited investments in affordable housing.
“The idea here is that homes are for Canadians to live in. They are not assets for parking offshore money,” Freeland told reporters.
For those watching, it was nowhere near enough.
“It’s like a squirt gun next to a towering inferno,” said Doug Porter, chief economist at BMO Capital Markets.
“We need to break the psychology that real estate is this can’t lose investment that only goes up,” he added. “Before this turns into a full-on bubble.”
March was a record month for new housing starts and home resale prices surged 31.6% year-over-year.
New Zealand, facing a similarly red hot market, introduced a raft of cooling measures including new taxes on investors and stricter lending rules.
And most measures that would cool the frenzy are up to the provinces and federal government who remain cautious as a third wave of COVID-19 rages.
Real estate agents say more listing are now coming to market, but they still see a massive long-term shortage. They expected more than the 35,000 units pledged in the budget.
“It’s not going to do much to intervene in the activity level we’re seeing now across the country,” said Christopher Alexander of RE/MAX Ontario-Atlantic.
(Reporting by Julie Gordon in OttawaEditing by David Gregorio and Alistair Bell)
Canada housing starts up 21.6% in March to new record – CMHC
By Julie Gordon
OTTAWA (Reuters) – Canadian housing starts rose 21.6% in March compared with the previous month, easily beating expectations and hitting a new record, data from the Canadian Mortgage and Housing Corporation showed on Monday.
The seasonally adjusted annualized rate of housing starts rose to 335,200 units in March, well ahead of analyst expectations for 250,000 units, and a new high for all months on record.
Much of the gain was on multiple urban starts, which jumped 33.8% to 222,358 units. Single-detached urban starts rose 3.6% to 78,615 units.
“The big acceleration came as weather was unseasonably warm in many parts of the country,” Royce Mendes, senior economist at CIBC Economics, said in a note.
Mendes added that new home construction will likely be a major contributor to overall GDP growth again in 2021, even as building activity cools off from the “torrid pace” of recent months.
Canada‘s average home selling price soared an eye-watering 31.6% year-over-year in March, hitting a new high as sales also climbed to a new all-time record, the Canadian Real Estate Association (CREA) said earlier this month.
A supply imbalance has been blamed for skyrocketing home prices through the pandemic, though new listings surged in March, which, coupled with strong starts, suggests a more balanced market could be coming.
“Red-hot demand for real estate propelled a record month for housing starts in March. While the market will need a long stretch of supply growth to have a meaningful effect on prices, the March numbers are a solid start,” said Shelly Kaushik, an economist with BMO Capital Markets in a note.
Canada‘s ruling Liberals are set to unveil their first full budget in two years on Monday, with billions in pandemic supports as COVID-19 infections skyrocket, a national daycare plan and new taxes on luxury goods.
(Reporting by Julie Gordon in Ottawa; Editing by Toby Chopra and Jonathan Oatis)
Canadian home sales, prices surge to new record in March
OTTAWA (Reuters) – Canadian home sales rose 5.2% in March from February, setting a new all-time record amid strong demand in markets across the country, the Canadian Real Estate Association said on Thursday.
The industry group said actual sales, not seasonally adjusted, rose 76.2% from a year earlier, while the group’s Home Price Index was up 20.1% from last March and up 3.1% from February.
The actual national average selling price hit a new record at C$716,828 ($572,821) in March, up 31.6% from a year earlier and rising 5.7% from February.
($1 = 1.2514 Canadian dollars)
(Reporting by Julie Gordon in Ottawa)
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