The real estate market is rising in value each day, both in the United States and online. Yes, online. Investors and celebrities have dropped hundreds of millions on virtual property in various metaverses. When Meta, formerly Facebook, shared its rebranding and released ads of a Mark Zuckerberg avatar talking to a robot and playing cards in a spaceship, many laughed it off. But others are taking the virtual world very seriously and treat this financially risky business as the future.
What Is a Metaverse?
Tech insiders have appointed an array of virtual worlds the “metaverse.” Combining virtual reality, augmented reality, and video allows users to “live” and connect with others in a digital universe. It has been coined the “next iteration of social media” or “next internet” by those deep in the game of all things crypto, non-fungible tokens (NFTs), and metaverse real estate. In these virtual worlds, real people interact as avatars, replicating the appearance of a video game. These characters can meet, talk, play games, attend concerts, or hold conferences from anywhere in the world.
“Metaverse” was born out of Neal Stephenson’s 1992 dystopian sci-fi novel, Snow Crash. In that book, the metaverse is a virtual refuge from an anarchy-laden world run by the Mafia. The concept remains the same for today’s creators: an escape from reality. But our version offers global connectivity and new experiences. Instead of posting, liking, and commenting on Facebook and Instagram, the goal is to create a more “natural” engagement from wherever you are.
Purchasing Virtual Property
A few weeks ago, the public realized how much this industry was booming when someone paid $450,000 to be Snoop Dogg’s neighbor in a metaverse called Sandbox. Like the real world, location in the virtual universe is important. Areas highly concentrated with people and events rise in value. Real estate sales in the “Big Four” – Sandbox, Decentraland, Cryptovoxels, and Somnium – alone reached $501 million in 2021. And that number is expected to double in 2022.
The process of buying virtual property is somewhat convoluted for the uninitiated, yet straightforward once you get past the first hurdles. First, you sign up with a metaverse platform. Classic cash or your debit card won’t get you far. Fiat currency – what most call “real world money” – has to be converted to cryptocurrencies like Bitcoin or Ether. You can also purchase currencies native to the metaverse. From there, you buy, rent, sell, develop, or renovate. Your property is attached to a non-fungible token title, which serves as the deed.
The metaverse real estate market is a high-risk, high-reward business. Experts recommend only investing capital you’re prepared to lose. Part of the danger lies in losing everything if the metaverse in which you own property fails or goes offline. No one knows for sure if this whole concept will catch on with the average person. Right now, most don’t have a couple hundred thousand dollars to invest in cryptocurrency and buy a digital home so they can attend online fashion shows or concerts.
Stupid or Smart?
Microsoft and Meta are battling to create the largest, most powerful supercomputer to house and operate the go-to metaverse, but they are not alone in their digital quest. Walmart is dipping its toes in the crypto and NFT games as well. The big-box retailer recently filed for new trademarks, signaling it will begin making and selling virtual goods. Although the company declined to comment on the specifics of its filings, it said it’s “continuously exploring how emerging technologies may shape future shopping experiences.” Nike, Gap, Under Armour, Ralph Lauren, Urban Outfitters, and Adidas have all expanded their revenue streams selling NFTs or filing for trademarks to create virtual stores and sell their goods.
With billion-dollar businesses increasing their involvement, does it mean the public should stop chuckling and take the metaverse in all its absurdity more seriously? This can only go two ways: flip or flop. Investors will either make billions of dollars over the next few decades, or this sci-fi movie plot will fall flat on its face. Who and what will determine its fate? Celebrities and billionaires can host fashion shows and virtual parties in a metaverse – but will the average person buy in, or is the majority of humanity comfortable staying in the real world?
~ Read more from Keelin Ferris.