How to Buy Land and Real Estate in the Metaverse
We are rapidly moving into the age of the metaverse – connected and persistent virtual realities where we will live digital lives alongside our real lives. Increasingly, we’ll use these spaces to work, play, socialize, and learn – everything we can do in the real world will have a “digital twin” in the metaverse that we can interact with without leaving our homes. This includes investing and making money, and just like in the real world, one of the most popular ways to do that will be to invest in real estate.
Metaverse real estate (or should it be virtual real estate?) is big business already. Superstars including Snoop Dog and global companies such as PwC, JP Morgan, HSBC and Samsung have already reclaimed virtual plots of land, which they intend to develop for various purposes. Those who arrived early have already made big returns – on paper, at least. Less than a year ago, the average price for the smallest land available for purchase on Decentraland or the Sandbox — two of the biggest metaverse platforms — was under $1,000. Today it is around $13,000.
So is this another chance to grab the hottest and newest digital assets before they explode? Like buying Bitcoin 10 years ago or NFTs two years ago? How do you get involved if you want to get in on the action? Or would you be better off keeping your distance from what could end up being an over-hyped bubble that is on the verge of collapsing? Keep reading to find out!
Why buy metaverse land?
Much like buying land in the real world, there are two main reasons you might want to buy land in the metaverse. The former is probably the safest – you want to use it for something, like building a house to live in or premises to do business from. When we say “living” in the metaverse, we really mean having a place to call home, where you can show off your belongings and maybe even have some friends to hang out with. It’s a bit like having a personal webpage in the early days of the internet, before everyone moved to social media. Metaverse “homes” will become a way for individuals to express their personalities online or to house their collections of unique digital collectibles. This is probably the least risky reason for wanting to own metaverse land – because you’re likely to get what you want from your purchase!
The second reason is as an investment, and things could get a bit shaky here because, of course, as with any investment, there is no guarantee that its value will increase. However, we currently appear to be in the midst of a gold rush when it comes to metaverse real estate, with average prices increasing 10x over the past year. Many people buy digital land now because they simply believe it will be much more valuable in the future when more and more people want to get involved. Some are buying to let, with the emergence of a healthy rental market.
How do I buy metaverse land?
Buying land on the metaverse is usually done with cryptocurrencies – Ethereum is a popular choice, as are SAND (the currency connected to the gamified metaverse platform The Sandbox) and MANA (connected to the community platform Decentraland). So getting them is usually the first step.
These two platforms are currently the favorites when it comes to owning land and property online, as they have well-established infrastructure and other well-known landlords and tenants such as the celebrities and businesses mentioned above. above, to give them legitimacy (who wouldn’t want to have Snoop Dogg as a neighbor?)
Land purchases on either of these platforms can be made directly from the platforms themselves. Metaverse land sales and ownership are recorded via NFT transfer, so the second thing you’ll need is a wallet capable of storing them. Metamask and Binance are two of the most popular.
In addition to buying directly from platforms, there is also a very active third party reseller market, just like real estate in the real world. Platforms like opensea.io and nonfungible.com act as decentralized real estate agents for the digital realm, allowing sellers to list their properties and prices, and buyers to negotiate.
Is buying metaverse land safe?
This is perhaps the big question – especially if you plan to put down a lot of money! Buying virtual land is definitely a high-risk investment, just like buying cryptocurrencies and NFTs. For starters, the market is largely deregulated, which means that if something goes wrong – like a seller who turns out to be a scammer and disappears with your money – the channels for requesting restitution are not developed, and you can find on your own.
Even if you don’t get scammed, there are technical considerations that can add an extra layer of risk – as transactions are done in cryptocurrency and NFT, you need to be sure you can store them safely and that you don’t forget your password or any other means you use to authenticate your ownership!
All in all (as long as you remember your password), because everything is secured on blockchains with smart contracts and securely encrypted, the risk of someone stealing your virtual real estate or giving up your rent payment agreements is currently minimal. However, there are fears that future technologies (such as quantum computing) will render current cryptographic security measures obsolete. This may not be an issue at the moment, but it could be an issue to keep in mind if you plan to make significant long-term investments.
A final consideration is the issue of rarity. The value of real-world land has steadily increased largely because it is a finite resource and the population of people interested in owning it continues to grow. In the virtual world, the amount of land available is potentially unlimited. If all the virtual plots of a platform are sold, but there is still a demand from buyers, nothing ultimately prevents the promoter from creating as many plots as he needs. Major platforms currently have limits on the amount of land – imposing “artificial scarcity”, but there is no guarantee that this will always be the case!
What is the future of investing in metaverse real estate?
In the long run, this will depend on the future of the Metaverse itself. Certainly some very large and influential organizations – from Facebook (now known as Meta, of course) to Microsoft and Nvidia are betting big that this is essentially the “next generation” of the internet. If that turns out to be the case – and the metaverse will continue to be as important to business and society for the next 20 years as the web has been for the past 20 years – then digital real estate will become probably an increasingly exciting area. and useful asset. From large corporations to personal brands and influencers, we clearly love the opportunity digital gives us to grow audiences and create exciting new products and services, and the metaverse may be the next big thing – even more immersive and more time-consuming than the web and the social networks that preceded it. This is likely to indicate a healthy future for the digital land and real estate market.