We live in the digital age, and it is normal for digital real estate to cost much more than real estate. However, no matter how skeptical the experts and crypto enthusiasts are about the metaverses, it is impossible to deny the uniqueness and novelty of this technology.
The first virtual property was sold five years ago in 2017. Then it cost only $20, but, as you can see, digital land prices have increased significantly. Now, in one of the most popular metaverses of Decentraland, the average price of land varies from $6,000 to $15,000. But the cost can be ten times higher depending on the specific universe and location. The record for the most expensive virtual real estate is $4.3 million spent in the Sandbox metaverse back in November 2021.
Rise of the Metaverses and the Digital World
Any new technology goes through several stages, from the stage of inception to the stage of mass adoption. The Metaverses, with their digital real estate, are no exception.
It is important to note that any technology goes through an S-curve of development and adoption:
- In the first stage, the technology appears and is known to few people, and no one knows what can be done with it; only geeks and early adepts use it;
- In the second stage, the new technology is gaining momentum, and various speculations around it begin with faith in a brighter future – a hype starts, which ends with a market collapse (NFT bubble, Internet and dotcom bubble, cryptocurrency bubble of 2017, etc.);
- In the third stage, technology gradually becomes mass, and it is already impossible to imagine life without it. It’s like imagining life without the Internet.
In general, metaverses are much more accessible than most people think. The cheapest simple virtual reality glasses can be bought for 70-100 dollars and start exploring the metaverses or even selling digital real estate immediately. There are many sites where you can go to various digital rooms for free and hold a meta-conference. Metaverses are not only about virtual reality. And it is generally about almost any remote interaction between people. Communication in a working telegram or playing World of Warcraft is also metaverses, but in a different order and with other properties.
We have been transitioning as a species for a long time – from the physical world to the digital one and digital real estate investing. Still, now the digital world is beginning to take on a definite visible shape in the form of digital 3D objects, which often cost more due to increased demand and people’s faith in a new wondrous digital world that there will enrich.
Digital Real Estate as a New Generation of NFTs
An expensive asset appeared in the world – virtual land / real estate, the market volume of which amounted to hundreds of millions of dollars. Without a doubt, earth in the Metaverse will be the next big trend in the NFT industry.
So, real estate in the Metaverse is a piece of virtual land in a particular digital world. As in real life, each property is unique and is assigned a specific non-fungible token (NFT).
Users’ most reliable and popular metaverses are Decentraland, Sandbox, Somnium Space, and Voxels. These are market leaders who have already won the trust of users. They provide a wide range of properties, and buying on the Big Four platforms is simple.
Types of Digital Property
Web 3.0 metaverses are economies of the virtual world that are a complex combination of digital goods, services, and assets constantly evolving and creating real value for users. Moreover, these are not just housing but a range of architectural buildings. These include:
- Art galleries.
- Business Offices.
- Multiplayer Play-to-Earn Games.
- Virtual Embassy and Consulate: The Government of Barbados plans to open the first official embassy in the Metaverse.
- Gambling – players experience the effect of presence more than ever.
- Advertising: Virtual property owners create digital billboards to promote players for a fee.
- Music platforms for DJs and musicians to play music and hold concerts.
As you can see, virtual real estate can be monetized: rented out and used for various events, work, games, etc. Also, everyone can sell real estate just like in the real world. The ways to use and monetize it are endless – it all depends on your imagination and desire.
Digital Real Estate Investments: Risks and Prospects
The risks of buying real estate in the metauniverse are similar to physical real estate or physical property: the direction of demand for its use may change, chaotic development of the adjacent territory will appear, a “bad” neighbor will move into the house, a noisy establishment will open nearby, buying digital real estate may be more expensive than physical, etc. P.
There are possible problems with the Metaverse: a hacker attack, a drop in popularity, the platform’s closure by the owner, incompatibility with technological innovations in other metaverses, etc. This may partially or completely devalue digital assets. Nevertheless, despite all the risks, multibillion-dollar transactions are already being made in the Metaverse in the hope of fabulous profits in the future.
This, of course, does not mean that you will not encounter any obstacles to purchasing digital real estate. However, as in the traditional real estate business, you must have a clear plan and get to work early to avoid pitfalls.
Real and Virtual Universe
New perspectives arise with the development of augmented and mixed reality technologies. They allow you to connect the real and virtual universe on one device in several overlays. For example, VR real estate can be linked to reality via GPS coordinates through an augmented reality application. As a result, its owner will receive advertising revenue in the real and virtual territory around his property.
Their metaverses and real estate are not publicly available due to the high cost of VR equipment kits and the limited supply of digital objects for sale. Moreover, transactions with virtual values are not regulated by law, causing concern among potential investors. But a branch of “virtual law” will surely appear soon since the emerging legal relations associated with the flow of big money and human destinies require state attention.
Society is on the threshold of a new reality. Investors, as always, need to assess their strengths and risks soberly and not invest all their money in the expectation of instant growth. Although society did not know anything about them, metauniverses existed, only they did not have such a feature of the real estate industry.
It can be expected that, like NFT (digital asset) and any other technologies not only related to blockchain, this area will follow the path along the Gartner Hype Cycle – when, after the peak of inflated expectations, the bottom of disappointments will come. After that, a productivity plateau will follow with passive income.
As we said above, digital real estate investment is a risk. The digital real estate business, even on the most reliable site, is not regulated in any way, and anyone can introduce themselves as a broker. Such cooperation must be approached very carefully, and check who you will work with before becoming an investor.
Yes. The strategy is similar to a normal process; you can only be at home or in the office for all operations. You can buy digital real estate or sell domain names on various marketplaces or special platforms and earn real money. Moreover, to purchase digital real estate, you can use cryptocurrencies.
Ownership in the form of digital real estate exists in the vastness of the Metaverse virtual worlds. Simply put, this is a virtual space that develops as long as investors, communities, or companies believe in it.
If in the physical world a plot will cost a hundred or several hundred thousand dollars, then in the Metaverse, it will cost just a few dollars or $10,000. However, it is worth noting that this plus is quite controversial. You can live in a physical house, but you can’t live in a digital one. Its purpose depends on your plans for renting, future sale, or use.