With the popularity of the concept of the Metaverse, buying and selling real estate in the virtual world has become more and more popular, and it has even hit a new high in the transaction amount of virtual real estate many times. Why is the Metaverse real estate so attractive, and what are the hidden mysteries? Can I but Metaverse virtual real estate?
Recently, a piece of virtual real estate on the virtual reality platform "Decentraland" was sold for $2.4 million worth of cryptocurrency, a record-breaking amount, which once again sparked intense attention to real estate speculation in the Metaverse. But experts warn that spending money on fictitious land or property will be worth nothing.
"Decentraland" is an online virtual space, which is one of the so-called metaverses. Users can buy virtual land on the platform, build houses, decorate their own houses, open storefronts. You can also buy and sell real estate, roaming through it as an avatar.
Buying a house on the "Decentraland" virtual platform is a real estate company "Metaverse Group" that focuses on the metaverse economy.
You may not have heard of this company, but one of the big four international accounting firms, the internationally renowned accounting firm PricewaterhouseCoopers (PwC) has also entered the Metaverse for real estate speculation. Buy real estate for a "significant price" on the Sandbox.
"The Sandbox" features other notable real estate owners, including American rapper Snoop Dogg, who recently bought a virtual piece of land for $450,000 to develop his own "historical" Snoopverse".
In addition, Hong Kong real estate giant, New World Development Group CEO Zheng Zhigang also announced an investment to buy one of the largest digital land parcels in the "sandbox" to build an innovation center, with a reported investment amount of about US$5 million.
Well-known singer JJ Lin also tweeted that he also owns digital land on the "Decentraland" virtual platform.
Metaverse refers to a network-connected 3D virtual space where users can enter the virtual world through other devices such as head-mounted devices, mobile phones or game consoles, and perform various immersive experiences in it.
Users have their own digital avatars or avatars in the virtual world. Through this digital avatar, they communicate with other users, explore new spaces, and create new content. The concept of the metaverse is that it can develop for a long time. An interactive virtual space for work and study.
Several metaverse platforms have emerged, including the aforementioned virtual game platform "The Sandbox", and the virtual world "Decentraland", in the same way, a website can also be an integral part of the virtual space.
More importantly, in the virtual metaverse, people can also buy items, including real estate, just like in the real world.
Transactions in the virtual world are usually carried out in cryptocurrencies, and in addition to cryptocurrencies, non-fungible tokens (NFTs) are the main method of trading swaps within the metaverse.
A non-fungible token represents a unique digital asset, and while a non-fungible token is primarily digital art (such as videos, images, music, or 3D objects), it can also be composed of many different assets, including virtual real estate. On the non-fungible token trading market "OpenSea" platform, there are also virtual land and virtual houses for sale.
In order to ensure that digital real estate can maintain its value and cannot be supplied indefinitely, this is the concept of "scarcity value" in economics. For example, there are only 90,000 pieces of land in the "Decentraland" virtual space, and each piece is about 50 feet long and wide (15.24 meters). ).
The value of virtual real estate has already risen, and in June 2021, digital real estate investment fund “Republic Realm” reportedly spent roughly the equivalent of $900,000 buying a parcel of land in “Decentraland”. According to “DappRadar,” a website that tracks non-fungible token transaction data, it was the most expensive non-heavy token land transaction in “Decentraland” at the time.
But later this record was surpassed, that is, the aforementioned real estate company "Metaverse Group", which focuses on the Metaverse economy, purchased land in "Decentraland" for US$2.4 million, and this batch of land is actually only 116 pieces of land. Smaller than "Republic Realm"'s 259 lots.
It’s not just the virtual land appreciation of “Decentraland”, the virtual gaming world “Axie Infinity” reportedly sold nine parcels of land for the equivalent of $1.5 million in February 2021, and by November, just one land was sold for $2.3 million s price.
While virtual land prices have skyrocketed, experts remind people to remember that investing in real estate in the Metaverse is a speculative venture, and no one can be sure whether virtual land is promising or possibly the next bubble.
Network research expert Dan Olson told Wired magazine that purchasing virtual land is just to obtain a license in the virtual space, but is actually purchasing the services provided by their platform. The money is wasted.
Putting aside the high profits that the real estate speculation in the Metaverse may bring, ordinary people may still be curious about what they can do with land or real estate bought in the Metaverse?
For example, the land purchased by the Metaverse Group in "Decentraland" is located in the fashion district. The buyer said that this space will be used for virtual fashion events, showing virtual clothes used on virtual avatars, and this is the future of the metaverse economy. One of the growth potential.
Metaverse real estate speculators are driving prices up. At this stage, it seems that only companies and investment funds have the ability to get involved, but not all real estate properties in the Metaverse have to be worth millions of dollars. You can also build your own little ones on some virtual games. s home.
But what's the point of having your own den in a virtual game? If you buy a physical house in the real world, it’s a tangible asset to live in, to decorate to your liking, to be a personal space that you’re proud of, and to invite family and friends over for a party.
In addition to being unable to provide housing, virtual nests are comparable to real-world homes in other aspects. For example, after buying virtual land, you can buy materials to build your own house, or you can directly buy a house built by others. You can decorate the interior design yourself, you can also invite virtual friends to have a fun party in your virtual den, or go to a virtual friend's virtual den for a fun party.
There may be many people who still think that this is just a virtual game, and that real estate speculation in the Metaverse is still too absurd. No one used social media before.
Technologists predict that in the next few years the metaverse will evolve into a fully functional economic model, providing an interconnected virtual experience for our real life, just like email and social media are today.
But remember, the virtual space metaverse is the same as the real world. Buying and selling real estate needs to be done according to your ability. If you want to speculate and make a fortune in the short-term, you will probably suffer the consequences.