Metaverse real estate has been selling like hotcakes over the past few months. Among large companies, celebrities, and metaverse enthusiasts, at least… But to most people, the idea of buying virtual land still seems very odd. Why would you invest in something that has no physical presence? And – most pressing of all – is it a wise thing to do?
Metaverse real estate explained
Technically, metaverse land isn’t real land. It exists online, where it can be bought and sold on platforms such as Decentraland and The Sandbox. To guarantee the buyer’s ownership of the land, the plots are sold as non-fungible tokens (NFTs). In most cases, the virtual land can only be bought and sold using crypto currencies.
Your ownership is then irrefutably stored on the blockchain. It might not actually exist in a way that you can walk on it or touch it, but it really is yours. Forever.
How to use land in the metaverse
A plot of virtual land can be more than just a monetary investment. Most platforms allow you to “visit” your land and even build on it. Metaverse enthusiasts might want to use it to build a 3D mansion, host a party, or create a game. Those who are interested in the business side of things, can use their metaverse land to advertise a business or organize an event.
The options for ‘what you can do with your land’ are becoming increasingly limitless as platforms expand and improve.
How to buy land in the metaverse
The process of buying metaverse land varies based on the platform, but here’s an overview of the steps in general:
Choose your platform
First, you need to choose a platform – ie, which ‘metaverse’ you’re going virtually own a piece of and ‘live’ in. If this is your first such investment and you’d like to keep risks to a minimum then it’s probably best to go for an already popular (and rising) one such as Decentraland or The Sandbox.
Perhaps your favourite celeb has a place there? Or you’ve read about countless other investors making a fortune overnight? There’s certainly plenty of hype out there to help you make your choice.
Get a wallet
Then, you need to set up a crypto wallet, and connect it to the platform of your choice. There are countless wallets to chose from just make sure that it’s one that works with the platform you’re set to move into. And then there’s the small matter of turning real, actual, worked for and earned money into cryptocurrency to spend virtually. And there are countless points of view on that.
Buy a plot
Now that you’ve got your account all set up, you need the corresponding crypto currency to buy a plot of land. There’s usually a map that’ll show you which plots are up for sale. You might also want to check if you can walk around with your avatar before making a final choice. (Hey, what are the neighbours like?)
As soon as a seller has agreed to your offer, congratulations. You’re now the proud owner of a little (or large) piece of virtual land.
Reasons to buy land in the metaverse
Of course, your immediate win is the ability to use your land for whatever you see fit. There’s a wealth of gamification to enjoy in the likes of The Sandbox and there’s obvious entertainment value to owning a plot of virtual space.
If you want to be at the forefront of metaverse development, having a space to build things or simply hang out with friends can be fun. You could just play the Sims 4 of course, but then you’ll never be Snoop Dogg’s new neighbour.
Ultimately though – and the reason stories about virtual land ownership are on the rise – it’s the prospect of this land being worth more than you actually paid for it at some point. And that’s driving a lot of sales.
Much like in the real world it’s a basic capitalist fact that if you buy a commodity which becomes increasingly scarce, then its value will rise. And hey, if you’ve not got the money right now, why not take out a metaverse mortgage?
And there’s certainly no shortage of mainstream-antagonising evidence to show that like it or not (and despite all common sense saying ‘no way’) that’s exactly what’s happening in the world of metaverse real estate.
So it’s all good news, right?
Reasons not to buy land in the metaverse
For every pro, there’s a con and metaverse real estate is no different, so make sure you know what you’re letting yourself in for before jumping in. Consider the following unique aspects of metaverse real estate very carefully before opening your crypto wallet.
It’s all speculation
As is the case for all kinds of metaverse investments, such as buying NFT art, there’s little experience to fall back on. Yes, many experts believe that society will become more digitalized, but that doesn’t necessarily include virtual real estate. It’s been said before, but we’ll say it again: there’s a chance to make money in the virtual real estate boom, but there’s also a chance to lose your full investment.
Scarcity and value
We’ve only got one earth, which means there’s a limit to the amount of land that can be owned. Furthermore, we all need land to live on, so it always comes with some intrinsic value. Naturally, this isn’t the case with digital land. Even if you do own part of a metaverse with a predetermined finite size, all the smart money might move to – literally – a whole new world next year.
So why does a plot of land on one platform sell better than on the other? Since, conceivably anyone can build a metaverse platform, it’s important to realise that you’re buying a piece of a game-like space which is priced according to its current popularity. If the platform’s popularity drops, so will the land value. And there’s nothing you can do to prevent the inevitable creation of up and coming metaverse after metaverse, all claiming to be the next sure-thing land gamble, ad infinitum forever and ever.
Backing the right technology horse
And there’s a risk of going too fast, too soon. Digital concerts and fashion shows are fun, but let’s be honest; they’re still nowhere near the real thing. In time, metaverse platforms may look as good or even better than reality. It’s hard to predict whether the platform of your choice (and home of your investment) will be able to evolve and be around when that day comes.
You should know that it’s possible to create an avatar on a platform like The Sandbox without having to buy anything. If you’re only here out of curiosity, why not take a walk around the metaverse platforms without investing?
Dip your toes in a virtual world and keep your real money in your pocket. Try it and if you like it, go for it. Only you can decide if this is for you or not.
The metaverse real estate boom seems fascinating, fun, and highly risky. Just think twice (or thrice) before investing any money, and remember to have fun!