“Metaverse users sold Non-existent digital land of 100’s of millions of dollars in a week.”
“Digital, real estate prices, surpass even those of the most affluent places of the world.”
You might have come across news headlines like this in the last few months. Even more, after Facebook changed its name to Meta. Now, you must be wondering what the hell is a metaverse?
Why is metaverse real estate sold at such an enormous price than most famous places on the planet?
Trust me. I was even wondering the same few months back. So, in this article, you will know more about metaverse real estate and its future.
Metaverse and its origin
Metaverse is a virtual reality space shared over the internet. You can access them from any part of the world and interact with them over the metaverse. The internet brought people from all over the world together; the metaverse will bring us closer. Many deem the Metaverse the successor of mobile internet, and now we know why.
Metaverse is not a new concept, and a 1992 science fiction novel by Neal Stephenson put the idea forward. Since then, most of us have interacted with the concept of Metaverse, be it in games like Minecraft, GTA V: online or through movies like Ready player one and The Matrix.
Within Metaverse, we can roam around, meet new people, explore new places, go to a bar, do the shopping, and even dress up as our favorite avatars, all while sitting at our desks.
Metaverse is still an evolving concept and truth to be told. We are far from understanding its full potential as of now. But this has not stopped big corporations, like Facebook, from joining the Metaverse.
There are multiple iterations of Metaverse, each having its metaverse cryptocurrency. All Metaverse can coexist like different countries, where users can jump from one country to the next and experience their unique benefits.
The most prominent one is Decentraland, built on the Ethereum blockchain, where you can buy land and trade NFTs using its metaverse crypto coins, called MANA. Users can hold the MANA like a stock to increase its value or purchase Avatars and other experiences on the metaverse. As of writing this article, each land packet is worth millions of MANA.
How does a land obtain value if it is existing virtually?
The Internet can be infinite, but a metaverse is not. There are several virtual 3D worlds but of defined sizes. Thus the supply of real estate and land is limited. However, more can be added later.
The underlying concept of limited supply is similar to Blockchain. Say 20 million bitcoins are issued for distribution. Once the amount is accomplished, there will be no extra addition. Hence due to its supply scarcity, it continues to drive its value.
Decentraland, built on top of a metaverse blockchain, has only 90,000 plots of land, with each plot measuring 2704 sq. ft. They auctioned all the properties between 2017-2018. But increased interest in the metaverse has opened up a new secondary auction for the plots of land and has pushed the prices to new highs.
What is driving the Metaverse real estate price?
Similarly, all metaverses have seen a jump in the plots price tags and a big jump in the daily active users. So, let us see the seven factors that are driving up the Metaverse Real estate prices.
The prices of plots work on the concept of rarity. You can increase the number of metaverses, but the number of plots of each metaverse will remain the same. The idea is like an NFT or Bitcoin. Unlike regular currency, there can be only 21 million bitcoins that we can mine. So, this scarcity in numbers helps in increasing its value.
The prices of our physical real estate depend on the location. The same goes for virtual reality plots. Big corporations are jumping to build malls, tourist attractions, concerts, and other social gathering venues like the shopping district. The gathering of many virtual users increases the traffic of the places and helps drive the price even more.
For example, I can buy a plot of land and build a shopping mall to display my NFT artworks. It will increase my plot’s traffic and improve its overall value.
As humans, we all have a significant Fear Of Missing Out. News of each land sale fetching millions of dollars has made people jump on the bandwagon. Undoubtedly, it also increased the secondary market value of the plots in the virtual reality space as first buyers are selling their plots more than their initial price.
With the emergence of Covid-19 and the restrictions, people worldwide are having virtual interactions. Metaverse allows us to have real-life interactions with others in real-time using technologies like VR headsets and 5G connections. We can hang out with our friends in our NFT avatars, shop, and even attend music concerts.
When you buy a plot of land as NFT, you have the right to build any property, rent it, give and deny access or even charge an entrance fee. You can even sell the land without even going to the land office. Just list the ground in a marketplace, and you can digitally swap it with cryptocurrency, which the blockchain will deposit in your metaverse wallet.
You can even build a skyscraper in your land without going through a land regulation office, and none of the physical limitations apply to it. The possibility is endless of what you can do on a metaverse.
Investment by big corporations
Recently multiple big corporations are jumping into the metaverse. Atari, a video game company, partnered with Decentraland to open its first virtual casino. Republic Realm, a metaverse real estate investment firm, bought the largest-ever land purchase on the metaverse for nearly $1 million to build a virtual mall.
Recently, Travis Scott’s concert was hosted on the virtual reality game Fortnite and saw 12 million players attending it. Since then, there have been such concerts and events in the metaverse. All of these are creating hype around land prices.
Metaverse is best experienced when we combine it with commerce. Companies can set up virtual stores for their brands, and people can interact and have an immersive 3D experience of the product before purchasing. Without a doubt, it will eliminate the hesitation people feel while buying products online.
Industry leaders like Facebook, Apple, and even Microsoft have joined the race to be a part of the metaverse. The prices of metaverse real estate will keep rising as long as people use it for the creative interaction, purchase, and sale of NFTs.
How to get a piece of the pie?
Imagine you bought a piece of land in the 1900s in Times square. Now guess the current market price of that piece of land. The price is invaluable. The same will happen to the plots of land on the metaverse.
Before buying a piece of land follow these steps:-
- First, you need to select the metaverse.
- Go through the underlining blockchain technology and the market caps of the metaverse crypto.
- From here, the task is simple. You can use real-life currency to buy into the metaverse crypto coin for the blockchain and then go through the auctions to buy your first plot of digital land.
- These plots of land are like a combination of currency and stocks. You can exchange them for the metaverse crypto coin or hold on to them to increase their value.
Can metaverse real estate be utilized for some other purposes?
Transferring the ownership of assets has become a safe and secure process due to the invention of blockchain technology. Here is what owners of virtual real estate can do with it:
- Construct malls, restaurants, etc – either yourself or by leasing virtual land developers
- Organize professional or cultural gatherings
- Run companies or rent the estate to other businesses
- Mortgage land for an alternative source of revenue
- Re-sell the territory for a profit
- Design adventure parks and go on journeys.
By now, the clues are evident that the metaverse is here to stay, and it is the next big thing after the mobile internet. The community controls the metaverse and gets incentives to participate in the decision-making process. Clearly, it leaves the metaverse free from the clutches of big corporations and governments.
But all of this comes the massive energy consumption, as one transaction over Ethereum can use the energy of five US household uses in a day. There is the risk of hacking and money laundering, which can be solved by using cryptocurrency security. As the metaverse is evolving every day, we hope to see all of these concerns will be looked after as it will encourage more and more people to be a part of it.
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