A real estate boom is taking place now – a veritable land rush. However, the hot properties buyers eagerly snap up cannot be visited with the physical body. You do not get into your car, drive to their locations, and walk the grounds and buildings. These are virtual properties that only exist in the metaverse.
Much like the rise of NFTs, some might find the skyrocketing popularity and prices of this so-called real estate market somewhat baffling. What is the value or appeal? Can it be called real estate? Read on for a comprehensive introduction to virtual real estate in the metaverse.
Real Estate in the “real world” refers to properties comprised of buildings, land, or structures permanently attached to parcels of land. The dimensions of these properties that you can see appear as 2D constructs on the screen of whatever device you happen to use to view them. By contrast, metaverse real estate exists as virtual spaces manifested from lines of computer code.
Virtual real estate in the metaverse is designed to be analogous to real property because the platforms that sell it have made it artificially finite. Only a few mainstream platforms like this exist on the web, selling off plots of pixels to individuals and investors.
Metaverse real estate functions like a gathering place and a market square. Properties may display content that owners charge admission to or trade as an NFT. Users can socialize and play games through their properties, and businesses can leverage digital real estate for advertising purposes.
Virtual real estate in the metaverse presents a tempting opportunity for investors, much like real-world properties. Especially in the context of widespread initial interest, excitement, and eagerness to partake in digital land ownership, it is no wonder that some are sensing ample opportunity for profit amid all this activity.
Four dominant platforms control most virtual real estate in the metaverse: Sandbox, Decentraland, Somnium Space, and Cryptovoxels. Combined, they own 268,645 parcels total, and included in their portfolios are some of the highest-priced digital properties.
The process of purchasing a parcel of virtual real estate in the metaverse mirrors that of buying an NFT. A unique code on a blockchain represents your proof of ownership, like a deed. As with NFTs, you will need to dip into the world of cryptocurrency and obtain a crypto wallet if you want to access real estate digitally.
Different platforms vary and may be limited in the types of cryptocurrencies they will accept. Once you have a wallet, you need to create an account with a platform and link it to the wallet. After that, it is only a matter of choosing a property and purchasing it, depending on what you can afford.
Like in the real world, you can buy digital land through brokers or property managers. Use caution, however, when working with third parties in the metaverse. One aspect that distinguishes digital real estate from traditional is the former’s lack of regulation. Brokers, for example, do not need licenses to transact virtual properties. Thus, it would be wise to establish each agent’s reputability before working with them.
Arguably, a thought-provoking outcome of the rise of digital real estate is the vigorous philosophical debate it has sparked. Similar to how the NFT market has come under fire for comparisons to the physical art trade, some now take exception to terming digital spaces “land” or “real estate.”
While it is unlikely that such controversies will be quelled anytime soon, the reality is that people are investing real resources, time, and energy into these bits of code. The trade-in digital land behaves in a way that is at least partly analogous to its real-world counterpart, so the phraseology will probably stick even though we cannot predict how this phenomenon will ultimately evolve.