We keep seeing the words metaverse, cyberspace and more thrown around, and to an extent we do live very closely attached to our technology, but what does it all mean? Are we as a species relocating to the virtual world? Does being present in our physical surroundings not seem enough anymore?
Again, what exactly is going on?
What Exactly is the Metaverse?
The word ‘metaverse’ finds its origins in the realm of science fiction. Most people who are into reading, studying, or watching science fiction have at least heard of it. For those who haven’t, it’s a lot like the Matrix. It’s a virtual and digital universe in itself. It’s fully operational. There are multiple interconnected networks that interact with one another and users can access it to communicate with each other, perform tasks, and all in all, live their lives in a virtual space.
Wait, is this fiction or our existing reality?
The fictional landscape that the concept of metaverse was based upon is rapidly becoming a real scenario, especially in the last two years. Our dependence and reliance on virtual tools, technology, and media increased heavily since the pandemic hit, and since none of us could go outside and freely interact with one other the way we used to in the physical realm, we found our solace by doing the same digitally.
Metaverse is more than just video calls. It’s more than Zoom meetings. It’s more than online interplayer video games. Yes, these things all exist and can be considered a part of the metaverse, but it is not all there is. It’s an entire universe created for people to have their own lives online.
It’s kind of like World of Warcraft, an online multiplayer video game where people can create personas, buy tools and services, play together, go on adventures, conquer land, and more. It’s kind of like playing the Sims where you have a character and you roleplay real life scenarios and do all you can to keep your Sims alive. The metaverse is kind of like that, but so much more. It’s like living your life the way you would daily, but virtually.
The metaverse universe was estimated to be valued at almost $22 billion (Globe Newswire) in 2020, and according to data analytics services, it is expected to grow at a compound growth annual rate of more than 41% every year. So it’s not just a fad, it’s a trend that is going to last.
It still sounds pretty vague, but that’s because there is no clear definition to it. Why is that? Because the answer to this term lies in the possibilities of what can be achieved in the metaverse, and the possibilities are endless. So the definition of the metaverse is and what it could be will also keep evolving with time.
To gain a better understanding of what all the metaverse could be, we can look at a few features. It’s going to be a large-scale operation that can be operated by multiple people. It works in real-time and keeps getting updated and synchronised every second of the day. It is a three dimensional world with no boundaries that can be accessed by an unlimited number of users, where each user has their own individual identity. Basically, our world in which we exist in, but in a metasphere (virtual space).
Now that a clear(ish) definition of what a metaverse is has been established, we can focus on a new real estate market trend that is evolving. Yes, people have been considering investing in metaverse real estate and developing it.
Now what exactly is metaverse real estate? We’re glad you asked.
What is Metaverse Real Estate?
Imagine a world where you wear your VR headset and then enter a mall in the metaverse. You’re going shopping as you would in real-time in the material world. You enter your favourite shoe store in this mall in the metaverse and buy a pair that’s on sale. You pay the store clerk and leave the mall, satisfied with your purchase.
Or imagine this scenario. You’re a digital artist and you have created a series of artworks that you want to sell. You speak to a curator and they suggest selling your work online. But not on an online Etsy store or a website. You can have your own virtual gallery showcase where people can visit the gallery as a virtual 3D space, look at your art the way they would at a gallery in their town and buy it if they feel like it.
All of this, obviously, will be done using cryptocurrency.
Now, who owns the gallery? Who owns the shoe store? What is the mall?
These pieces of property are what we call the metaverse real estate.
Does Metaverse Real Estate Exist Already?
There are already virtual worlds that are outside the realm of video games like Fortnite and World of Warcraft that are popping up. The most popular of them all, of course, is Decentraland. People can sign up on the platform and explore different worlds that are created within the land. You can visit villages, explore space, buy land, build homes, and so much more – all in a 3D virtual reality space.
It uses the mana coin, which is a cryptocurrency valid in Decentraland, as its trading currency. In November 2021, Decentraland made a splash on the news when a subsidiary of Tokens.com purchased digital metaverse real estate on the platform for over $2.43 million (Markets Insider). The plot of virtual land costs more than most homes around the world, and for good reason. It lies in the fashion district of the virtual world, where high-end luxury brands are expected to put up shop for their users to buy luxury products for their virtual avatars.
Hey, if you want to treat yourself to a Gucci handbag that matches the one you have in real life to one you can have and carry around in the virtual Decentraland, who is going to stop you?
The answer is no one.
We’ve already seen a trend in games like Fortnite where you can buy different skins for your character. Big companies like Marvel have released limited edition skins of their characters from the MCU on the platform and players love it. It’s already a profitable enterprise, even if it does not technically exist in the real world. So the expectancy of the boom of the digital marketplace for virtual products, services and accessories in the metaverse is not that hard to imagine.
So What do the Virtual Real Estate Market Trends Say?
Early 2022 showed a hike in the metaverse real estate market prices. The smallest piece of land on popular virtual worlds was being sold for over $11,000. On Decentraland, you could buy a patch of land for 3.46 ether (Fortune), which is approximately $13,000 today. On Sandbox, another popular virtual world, you could buy a patch of land for 3.7 ether, worth approximately $14,000.
Now these values of the cryptocurrency keep fluctuating based on the market, but, trust us, it’s still a lot. Especially if it’s for a piece of virtual land created in a metaverse. And even more so if it is a small fraction of land.
Does it Make Sense to Invest in Metaverse Real Estate?
Data analytics services say that the value of goods and services provided in the metaverse are going to exceed $1 trillion in value in the next three years. So it makes sense to invest, right? Buy some land in the virtual cyberspace and see where it takes you.
Well, yes and no.
The first reason why it makes sense to invest in metaverse real estate is that the market for it already exists. In 2020, people would have loved having simple experiences like going to the virtual mall and shopping with their friends in real-time, or sitting at a virtual cinema hall and watching their favourite movie with their loved ones, or meeting up at a virtual cafe with one another and catching up. The pandemic really took a toll on a number of us and it would have been nice if this was accessible.
Read Also: “The Ultimate Dream of Social Technology”: What Is the Metaverse and Everything You Need to Know
Since the technology is only going to get better over time, the virtual metaverse is going to get better with it. It will have more nuanced 3D technology, more elaborate set ups, and who knows? Maybe in a couple of years you could catch up with your friend who lives in Auckland at a virtual Starbucks in Decentraland from your house in London. Anything is possible!
But, the metaverse operates on blockchain and cryptocurrency and we all know the intense rollercoaster of emotions we experience watching the crypto market. It’s volatile in nature, to say the least. So today your piece of virtual land could be worth $25,000 and tomorrow, if ether drops in value, your land could be worth $10,000. Who knows?
Final Thoughts
The concept of a metaverse is exciting and new and fun. It’s an all-encompassing universe in itself where anything is possible. But we don’t know enough about it to recommend purchasing real estate, at least not until it picks up more momentum. Two to three years ago, nobody had even heard of NFTs, and a large number of artists with various talents and skills across the spectrum are selling their art as NFTs. The world becomes their oyster, and maybe soon enough, so will the metaverse.
