Technology can divide almost anything today. Some platforms decided to use cryptocurrency technology — the blockchain — to divide houses. That is called tokenization. It is a powerful idea, but it pays to understand what you are buying when you buy a token.
The concept: tokenization vs. share registry
Tokenization turns the right over an asset into a digital record inside a blockchain network. Your ownership exists as long as that network and its legal framework recognize it.
In plain words: a blockchain is a digital ledger copied across thousands of computers at once that nobody can edit alone — the technology behind bitcoin — and a token is a digital marker recorded in that ledger standing for something. Example: instead of a deed, you hold 500 markers in an app saying 0.5% of a house in Ohio is yours.
A share registry is the traditional mechanism of corporate law: a company issues registered shares and records them in its shareholder ledger. Your ownership exists because an authority and a law recognize it.
In plain words: the shareholder ledger is the company's official record of who owns how many shares. Example: if the app disappears tomorrow, that ledger — and the law behind it — still say the shares are yours.
The Lofty.ai model: everything on the blockchain
Lofty.ai is a pioneering US platform that lets you invest from USD $50. It converts ownership of a house into digital tokens on the Algorand blockchain, and its main draw is that it distributes rent daily.
Where its limit is: investing through digital tokens places you in a regulatory gray area. Governments are still defining how to tax and regulate crypto platforms. In the event of a network hack or a sudden change in crypto asset law, your tokens could end up in legal limbo and lose value, even though the physical house is still standing.
Example: of a regulatory gray area: it is still not settled whether your token is a share, a currency, or a piece of property. How much tax you owe, and who you can turn to when something goes wrong, both hang on that answer.
What Circular Urban adds: tradition backed by law
Circular Urban is also fully digital and also starts at USD $50, but it does not use experimental tokens. It uses traditional corporate law: each property is a formally incorporated SAS (simplified stock corporation) under Colombia's Law 1258 of 2008.
In plain words: Law 1258 of 2008 is the Colombian statute that created the SAS and defines how its shares work. Example: it has been applied for over fifteen years and judges have already settled disputes under it; crypto regulation is still being written.
You do not own a cryptocurrency: you own registered shares recognized by the country's authorities. That gives you legal certainty without exposing you to the technical risks of the crypto world. The honest trade-off is frequency: dividends are structured periodically, not daily.
Comparison table: blockchain vs. corporate law
| Feature | Lofty.ai | Circular Urban |
|---|---|---|
| Ownership format | Digital tokens (crypto assets) | Legally registered shares |
| Technology risk | High (blockchain vulnerabilities) | Low: the right sits in the shareholder ledger, not on a network |
| Regulation | Gray area (crypto law still developing) | Fully regulated (Law 1258 of 2008) |
| Payment frequency | Daily | Monthly (structured dividends) |
The underlying question
Both models chase the same thing: letting you own a piece of real estate with little money. The difference is what backs that right. A token depends on a network and on regulation still being written; a registered share depends on a law that has been applied for decades.
What to weigh on our side
Corporate law is slower than a blockchain network. There are no daily payouts and no 24/7 open market to resell: dividends follow a schedule and transferring shares goes through the shareholder ledger.
In plain words: transferring shares means selling or handing them over to someone else. Example: you agree the sale with the buyer and the company records the change in the ledger. That is a process of days, not an instant "sell" button.
You gain legal certainty and pay for it in speed.Related links
- Circular Urban investment projects
- Lending to companies or owning dollar-denominated assets
- The blind intermediary risk: custody of funds
- The history of fractional real estate around the world
- What Circular Urban is and how it helps you invest
This content is educational and is not financial, legal, or tax advice. The terms of each platform can change; check their current information before deciding and talk to your own advisor.
Published by
María Camila Becerra Cabrales