By TYRONE TOWNSEND
Millions of dollars are being spent on digital real estate as investors take their money to the land of the Metaverse.
Since Facebook renamed its company to Meta Platforms in October, plot prices have skyrocketed by 500 percent.
Meta and other businesses have a long-term ambition of creating 360-degree immersive worlds that people will access through virtual reality goggles. Users may now access these worlds using a standard computer screen.
Real individuals engage in these virtual worlds as cartoon-like characters known as avatars, akin to a real-time multiplayer video game.
Journalists from the Wall Street Journal recently spoke with companies investing in digital real estate to understand the economic model, and why investors are spending so much money on virtual property. The following video offers an in-depth explanation.
According to Grayscale, a digital currency investor, the worldwide market for products and services in the Metaverse is a $1 trillion market opportunity.
In late September, the Sandbox announced a collaboration with famed rapper Snoop Dogg to build up his residence and nonfungible token collection in the Metaverse. The following month, Paris Hilton partnered with Decentraland and Genies to perform as one of the key performers at the first Metaverse Festival, which took place in late October.
Nonfungible tokens, or NFTs, are blockchain-based collectibles that are digital representations of real-world goods. Anyone entering a virtual environment may buy or exchange art, music, and even homes as NFTs. The NFT is not interchangeable and serves as evidence of ownership.
Technologists anticipate the Metaverse will mature into a fully functional economy in a few years, providing an asynchronous digital experience as integrated into our lives as email and social networking are now.
SuperWorld is a global virtual real estate portal with 64.8 billion plots of land for sale as NFTs. Owners can acquire land for emotional or business reasons and they get a part of any transaction that occurs on that piece of property after they purchase the NFT.
“It is appealing to open property in the metaverse as it gives you options and more strategies to create, discover and monetize in a novel way,” said Max Tulchinsky, lead for the PR department at SuperWorld.
The blockchain — a digitally distributed public database that removes the need for a third party, such as a bank — powers banking in these digital worlds. Bitcoin is the currency of choice.
Metaverse assets continue to thrive despite the rises and falls of Bitcoin and other cryptocurrencies.
Investors should note that in the Metaverse, investing in virtual property is uncertain and no one knows whether this boom will be the next big thing or the next giant bubble.
“With any digital asset, there is always a risk factor to consider as well as the potential for reward. When purchasing a property in the metaverse, one should consider that this is a developing niche of the market,” Tulchinsky told the Mortgage Note in an interview. “Rewards include the potential for increasing value, the opportunity to participate early on these platforms can reap major benefits as well as any monetization and creation opportunities.”
Tulchinsky added that metaverse properties have the potential to be accessible in the way that physical land is not able to.
“As the world becomes increasingly digitally-minded, more and more opportunities will emerge to enable owners to create income and share it with others around them. As an example, in the future, SuperCitizens will be able to monetize their land plots with digital assets they or artists places there, creating an opportunity for increased financial gain and utility.”
As the Metaverse expands, so will digital real estate. Buyers and investors ahead of the game should expect that the metaverse real estate boom is here to stay.
Even investment firms are becoming interested in the Metaverse and learning how to participate.
Skilled investors and purchasers who scoop up homes in prime locations will appear very smart, similar to the domain name scramble during the early days of the internet.
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