he parallel universe seems like a thing out of a sci-fi movie where we have another version of ourselves in another universe. But it's not fiction anymore. Advanced technology and human creativity have made it possible to build our own digital parallel universe - called the Metaverse.
We now have a digital twin who can work, play, socialize, and do anything we can do in the real world. You can buy and sell your digital assets in the virtual world from the real world. This new world is a convergence of the digital and physical worlds.
People are now buying virtual land, and the Metaverse real estate market is booming. Famous companies and well-known celebrities are also investing in the Metaverse. So, are we shifting to the virtual world? Should you buy land in the Metaverse as well? Read on to figure it out.
What Is the Metaverse?
Metaverse is coined from two words: Meta and Verse. Meta in Greek means beyond, and verse means the world. So, the Metaverse simply means beyond the world. It is an artificial world built by us and is a crossroads of web 3.0, blockchain technology, and virtual or augmented reality.
Many analysts see the Metaverse as a three-dimensional representation of the internet. It is a parallel digital universe where you can live your digital life. It is an interactive, immersive, and hyper-realistic shared virtual world that lets you feel that you are there. It also features your own avatar and digital assets backed up by blockchain technology.
What Is Metaverse Real Estate?
Metaverse real estate is the land in the virtual world. They are similar to real estate in the real world. However, the only difference is that they are set up in the virtual world. These virtual plots of land called parcels can be traded through cryptocurrencies like the real world.
Land in the virtual world looks like pixels. But, they are more than the jpeg images; they are programmable spaces backed up by blockchain technology. After acquiring these parcels, you can build anything on it from houses, shopping malls, towers, art galleries, and restaurants. You can commercialize these real estates by flipping, leasing, or selling them after their value increases.
How To Purchase Land In The Metaverse?
Purchasing land in the Metaverse is similar to buying the NFTs. You can easily purchase the desired land with specified cryptocurrencies. Also, you can borrow the mortgage to buy the land if you don't have enough cryptocurrency available.
If you are interested in buying the virtual land in the Metaverse, here's how you can purchase them:
Get A Digital Wallet
Firstly, the buying and selling of virtual land is done through cryptocurrencies. If you don't have cryptocurrencies on hand, you need to get them by converting your local currencies. The most popular crypto used in Metaverse real estate is Ethereum. However, it is crucial to know that the Metaverse platforms may have their own currencies. So, you should own the native cryptocurrencies as required by the platform to purchase the land. For instance, Mana is the native currency in the Decentraland Metaverse, whereas Sand is the primary currency in the Sandbox platform.
Secondly, you should be able to store these cryptocurrencies for which you will need a digital wallet such as Binance, Metamask, or Trust wallet. Having one of these wallets will help you hold the cryptocurrencies you have purchased.
Select Your Real Estate Platform
There are several platforms through which you can buy and sell virtual real estate. The most popular platforms are Sandbox and Decentraland. These platforms have a well-established infrastructure and well-known landlords and tenants such as celebrities and corporate companies, which provides legitimacy.
Choosing a legitimate real estate platform is crucial to ensure that you are not getting scammed. Also, you can check out third-party websites such as OpenSea, which helps you purchase the Metaverse real estate on your behalf.
Browse And Select A Parcel Of Land
After setting up the digital wallet and selecting the Metaverse real estate platform, you can sign up for the platform. After that, you can browse through parcels of land, compare the pricing and select the one you want to buy.
Connect Your Wallet
To make payments, you need to connect your wallet to your account. It's essential to ensure that the wallet has enough crypto required.
Confirm Your Purchase And Make Payment
After you have confirmed your purchase, you can pay the required amount through your digital wallet. Aside from the parcel price, you need to pay extra money for the processing cost and gas fees for Ethereum-based projects. Thus, make sure you have enough balance in your digital wallet to make the payment. The purchased NFT real estate is sent to your wallet after the payment is made.
The steps are similar if you purchase virtual real estate by getting a mortgage. The only difference would be that you won't get the full ownership of the NFT until the loan is paid for. Various lenders let you borrow loans for the Metaverse mortgage. The popular one is TerraZero Technologies, the first lender to provide a Metaverse mortgage.
Where To Buy Metaverse Real Estate?
While the Metaverse platforms are increasing daily, the big four own most of the market. The big four consist of Decentraland, Sandbox, Somnium Space, and Cryptovoxels. These platforms hold 268,645 parcels, including the highest-priced parcels available.
Apart from this, here are some of the Metaverse real estate platforms from where you can purchase your virtual land :
Why are people Buying Metaverse Real Estate?
Experts believe that Metaverse is the next big thing in the crypto world. With the boom in bitcoins, Ethereum, and NFTs, people want to invest in the Metaverse, which is still in its infancy. People believe that, like bitcoin and Ethereum, the value of Metaverse real estate will increase rapidly, thus, making it a lucrative investment opportunity.
Apart from this, Metaverse real estate is similar to owning assets in the real world. Like real-world assets, you can sell, flip and lease them. They have commercial value, and you can make passive income.
Some people are also buying them to be neighbors with their celebrities. For instance, a man paid $450,000 to purchase land in the Metaverse to be the neighbor of the rapper Snoop Dogg.
The Metaverse real estate market is heading towards a boom, with the land selling for millions of dollars. This has made it a lucrative investment for the people.
What Is The Value Of Metaverse Real Estate?
Financial analysts have predicted that the Metaverse has the potential to become a multi-trillion-dollar part of the world economy in the coming decades. Like the cryptocurrencies and NFTs, the Metaverse is the next big thing. Metaverse experienced a significant boost after Facebook rebranded itself as Meta in 2021. Since then, the Metaverse market has increased significantly, and is predicted to continue rising at a CAGR of 31.2% from 2022 to 2028.
For instance, Decentraland, one of the top Metaverse real estate platforms, launched its first auction in December 2017 and sold plots of virtual land for $20. But, now, the price of the same plot has skyrocketed to $6,000 and is trading at $15,000 in 2022. However, prices for virtual land plots vary greatly depending on their size, platform, and location. A piece of land in Somnium Space costs $6,362, while a luxury plot on Decentraland costs $2.4 million. On top of that, the landowners in the neighborhood also play a huge role in the value of the virtual land.
Furthermore, with big companies and celebrities putting hands-on buying the Metaverse real estate, the value is expected to rise in the coming days.
Risk and Rewards of Investing In The Metaverse
Like cryptocurrencies, Metaverse is also a risky investment. Though the Metaverse is expected to snowball in the coming years, it is still a new industry and concept. If this platform fails, you will lose your money, and your investments will become non-existent. Apart from this, Metaverse might face legal issues as it has no legal structure that binds it. There is no legal framework there as these worlds are user-built and regulated. Thus, if your seller turns out to be a scammer or fraud, there are no channels to seek restitution.
Also, there is the issue of the valuation. Though the prices are soaring now, that doesn't mean they will keep increasing. The resources are limited in the real world, but it is not the case in the virtual world. It currently enforces artificial scarcity by selling limited land plots. But, if there is high demand, these platforms can add more land plots. Thus, the unlimited resources of virtual real estate have put a question mark on its actual value.
Furthermore, the Metaverse is highly volatile since it is based on cryptocurrencies. Its future depends on the path that cryptocurrencies take, which is not predictable. Thus, investing in the Metaverse is highly speculative and very risky.
However, as the saying goes, high risk, high return. Metaverse real estate prices are skyrocketing, tripling your investment. According to Jason Cassidy, founder of the Metaverse Group, buying digital real estate is like buying real estate in Manhattan in the 1900s. It won't take 120 years for it to explode in value, but merely 5–10 years.
Thus, considering the booming crypto market, people expect Metaverse real estate to be the next big thing and seem to be in a gold rush.
The world has shifted to the virtual world, and it's no surprise that we are investing in virtual land. The Metaverse real estate market is booming with soaring prices and demand. Big companies such as JP Morgan, HSBC, Samsung, and Meta/Facebook have heavily invested in the Metaverse, and experts believe that the Metaverse is going to be the next big thing.
The crypto world has seen rapid growth in the past few years, and the Metaverse is also expected to make exponential growth. This has made the Metaverse real estate a lucrative business, and many people are putting their hands on it. However, while the Metaverse seems like the new future, it is crucial to understand its risks before investing your money.