At present, there is hype for Metaverse in the world right now. It created more hype because Mark Zuckerberg transformed the Facebook name known as ‘Meta .’The new name reflects the company’s growing ambitions beyond social media. Facebook, also known as ‘Meta,’ has adopted a new moniker based on the sci-fi term Metaverse, describing how everything from playing to working can be done in the virtual world.
“Metaverse isn’t a thing a company builds. It’s the next chapter of the internet overall”
Mark Zuckerberg
Investing in virtual land or real estate sounded ridiculous a few years ago. Today the time and situation are different. The world is now introduced with the new word called Metaverse, known as the virtual world in which we can do anything that we do in real life it’s just that you can now do it in a virtual world created by yourself. Now, you can buy virtual land in a digital world with the emergence of meta space, and investors are also looking into it.
But first, we need to look into the word Metaverse, how it is used, its features, and how we can buy land in the Metaverse.
However, if we talk about buying land in a virtual world, this topic is skyrocketing, and the trend is expected to continue; with a recent study, it is expected to grow by US $ billion by 2026.
“The people are pieces of software called avatars. They are the audiovisual bodies that people use to communicate with each other in the metaverse.”
Neal Stephenson Author
Stephenson is the person credited with first connecting the term “metaverse” to the idea of an immersive virtual reality in his 1992 novel Snow Crash.
For all the hype, keeps in mind it is often difficult to understand the conceptual and legal document challenges created if we invest in a virtual land in the Metaverse; so, the question arises can we buy something that’s not ‘real’ and have anything in common with real estate?
What is Metaverse?
It is generally regarded as a network of virtual worlds in which the users can interact with each other. For example, some tech companies, including Meta ( previously known as Facebook), believe the Metaverse is the future of the internet; however, it will take some years to get a hand on it. But some virtual worlds exist, such as The Sandbox, Decentraland, and Other Side.
“In simplest terms, the metaverse is the internet, but in 3D”
Ed Greigg
Simply Metaverse is usually interpreted as an alternative digital reality, combining virtual reality, augmented and extended validity, in which human beings can work, play, and live by owning land in a virtual form.
More and more investors are now eager to invest since Facebook changed its name to meta because the digital world is the future of the internet. Investors are looking for investment opportunities in the fast-growing meta space. Buying digital land is one such opportunity that grabs the attention of investors.
Why are Investors Buying Virtual Land?
Real estate is a popular asset worldwide but is now available in digital form. However, it is invisible in the virtual world. Virtual land can also be purchased through currency. Today, many virtual worlds allow us to buy virtual real estate. Decentraland is also one of the most popular among the virtual worlds.
There has been an increase in demand or investment in virtual land in the past 18 months. Under the terms of the metaverse platform, virtual landowners can transact, develop, and lease. For example, In 2021, crypto-based investment company Every Realm purchased a plot of land in Decentraland for nearly US$ 1 million and developed it into a 16000 square foot shopping district.
In Metaverse, virtual real estate prices have reached hundreds of thousands of dollars. Given the growing interest in the Metaverse, there is speculation by cryptocurrency users for the specific amount of potential ROI (Rate of investment). One advantage of owning virtual land is that investors can put their virtual land to use and earn additional income from it by renting, and you can hold exclusive events or parties.
Investors can generate regular income from virtual land. For example, you can use NFT (non-fungible token) to build a house of virtual land and rent it to get income monthly, or you can also use it to show an NFT art gallery or rent it to others.
Also, some companies are looking to acquire a virtual office in the Metaverse, for which we need to own the land in the Metaverse. Meta and Microsoft are developing products that allow users to meet in 3-Dimensional virtual spaces.
From NFTs to virtual land
NFTs-non fungible tokens- is one way to know how to work ownership in virtual land. NFT is a digital asset that is identifiable within the technology framework in which it exists. Unlike other tokens, NFTs are not interchangeable (fungible)with each other. If NFT is linked to a digital asset such as virtual land, it can be used as evidence to transfer the underlying asset.
Virtual land transactions have been made possible by linking the right to control and considering the virtual spaces in the Metaverse to NFT.
Can whole land be compared to virtual land?
Land in the Metaverse shares several similarities with the real world. A virtual world can be set up so that the amount of land is finite and laws of supply and demand apply. On the other hand, virtual or digital form users are drawn to an interesting place in the virtual world. The more popular the location, the higher the value of virtual land. For example, an American singer or rapper holds an exclusive party on the sandbox’s non-fungible token(NFT) platform to rebuild his real-life mansion.
Participants need an NFT, like a pass, to enter the event site. However, cryptocurrency can also make payments to buy virtual land. Many investors nowadays invest money in cryptos. So, the hype of digital currency will also keep increasing in the future. An investor can generate regular income from their virtual land.
Step-by-Step Guide to Help You Buy Land in Decentraland
Decentraland is a virtual reality platform based on blockchain, which enables us to buy land in various ways. One such way is NFT(non-fungible token). It is the largest virtual universe in NFT space and has its tokens- mana and land.
The size of each land should be 16×16 meters and is represented as NFT. Anyone can buy land virtually through the open sea, an NFT market.
Step1- Enter Decentraland Market
First, you need to visit the decentral and Market and register yourself. After logging in, browse to “packages and properties.”
Step2- Select a Parcel
After logging in, browse the existing land and choose the land you want to buy. The advantage of buying the land from the decentral Market is that you can see the adjacent areas and the distance from famous places or areas. The land adjacent to a famous place area must have a higher value.
Once you have selected your virtual land, Continue reading in detail to gain knowledge. On-site, you will see the land owner’s price, availability, and name in mana.
Step3- Connect your wallet to Decentraland Marketplace
It is important to link your wallet with the account to purchase virtual land. Because once the purchase is successful and completed, the land will be sent to your wallet as NFT. You can download wallets such as metamask and trust wallet if you don’t have a wallet.
It would help if you had a minimum Ethereum(ETH) digital currency used to make payments and enough mana in your wallet to buy a virtual land. In addition, you need to have some tokens to take off other things that can be used to make payments digitally.
Step4- Confirm your virtual land
Once the purchase is completed, you can confirm your land in your wallet.
Challenges
Investors face some challenges in buying virtual land since there is an increase in interest in virtual land, similar to investments in real estate.
Artificial Scarcity
Investment in virtual land depends upon artificial scarcity, can laws of demand and supply work where there is nothing for someone to buy virtual land in a different virtual world? Any investment in virtual land is a mass adoption of the Metaverse or the platform where the virtual land is located. While in theory, it is found that a metaverse platform can generate infinite virtual land.
Indeed sophisticated virtual worlds take time and significant investment to develop, so creating a new virtual world could rival the existing platform to such an extent that reducing virtual land values would take a lot of work.
Utility and adoption
Another challenge is that virtual land has no inherent utility. There are no effective and meaningful used cases with no long-term gains speculation and a limited amount of success.
Many virtual land investors are motivated either by short-term speculation( buy or flip) or a long-term passive investment strategy(buy, wait, and sell once the Metaverse has matured and sell to someone who wants to develop the land at that stage).
However, fewer transactions in the short term have led to meaningful attempts to create genuine commercial use cases for virtual land.
Volatility
A high level of volatility is also one challenge of virtual land. Any investment in virtual land is a combination of mass adoption of Metaverse and a relevant platform where the virtual land is located. However, the virtual land volume of transactions and prices correlate with news and development related to particular metaverse platforms.
Market perception and adoption level of Metaverse, as well as the performances of the cryptocurrency market, lead to a significant movement or volatility.
Technological barriers
There are technological barriers to realizing the vision for the Metaverse that many existing virtual land investments predicted. Significant technological advances are required to deliver a genuinely persistent and immersive world.
Ultimately, the value of virtual land will be driven by the popularity of technological advances because the Metaverse depends on technological advances and widespread adoption.
Competing ideologies
The different versions of the Metaverse may lead to parallel competing metaverses that are only partially interconnected. This metaverse world is likely to be a less compelling proposition for users due to the need for network effects.
Legal consideration
Ownership of NFTs representing virtual land
An NFT is a unique crypto asset that represents certain rights, including potentially underlying assets(virtual land), and which is created and transferred using DLT. It is proposed that NFTs be treated as property in English law. This is a legitimate way of different transactions of different metaverse real estate transactions.
Recognition of ownership of digital assets such as NFTs across the world’s legal systems will be important for the metaverse virtual land market to attract investment from global real estate investors.
Ownership of virtual land represented by NFTs
Virtual land NFT holders will provide ownership rights to the underlying virtual property. The rights linked to the plot of virtual land will only be rights to control and use the land in particular ways to earn more benefits aside( such as by developing a building on it). Rights in virtual land are governed by contract, and the land’s very existence depends on the third-party operators.
Conclusion
Virtual land transactions will likely increase in the tech world around us as early investors seek to buy prime plots. They are usually acquired by businesses to rent space to sell their products and services or even host their employees in a virtual office space. Increased metaverse landgrab tempts several global investors to enter the virtual land market. However, cryptocurrency can also make payments to buy virtual land. Many investors nowadays invest money in cryptos. So, the hype of digital currency will also keep increasing in the future. An investor can generate regular income from their virtual land.
NFTs-non fungible tokens- is one way to know how to work ownership in virtual land. NFT is a digital asset that is identifiable within the technology framework in which it exists. Unlike other tokens, NFTs are not interchangeable (fungible)with each other. If NFT is linked to a digital asset such as virtual land, it can be used as evidence to transfer the underlying asset.
So, the virtual land real estate market only knows one direction: to rise. Virtual real estate may become the future of a very profitable asset category, especially for early investors.
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