What is Virtual real estate?
Have you heard of real estate Locations that exist entirely online, and are accessible only by logging on?
For real estate entrepreneurs who are forward-thinking and ready to keep up with the latest trends, the digital future is where their interests lie. These entrepreneurs are already accumulating this land in the same way they do with traditional real estate.
To make it simple, virtual real estate or Metaverse real estate are parcels of land in virtual worlds, and they are, in the simplest form, a bunch of pixels in the digital space. But don’t be mistaken, they are more than just digital images found online. Virtual real estates are programmable space in virtual reality platforms, where the possibilities are endless for what you can do – people can play games, organize and attend events, sell NFTs, attend meetings, go to virtual concerts, and much more.
You can imagine virtual real estate in the same realm as getting a good domain name for your website, or having a good social media handle. Virtual real estate is one of the essential elements of Web 3.0, where we are moving towards decentralization and open spaces. In Web 1.0, email is our main ‘property’, whereas, in Web 2.0, social media profiles such as our Facebook or Instagram page are our main platforms and shape our online presence. Now in Web 3.0, we are moving towards owning personal property in the form of virtual real estate. One of the big differences in Web 3.0 is that instead of being tied to certain providers or platforms owners in terms of the design, regulation and control of what we experience, property in Web 3.0 is intended to be something us, as the end user, can build ourselves. Therefore, for brands, it could mean something much more interactive and active than their current digital presence. For individuals, it could mean earning income by playing games or selling products.
The potential of Virtual Real Estate
Some brokers are already selling luxury real estate plots in the metaverse. And just like traditional investments, when the demand for these plots increases, so does their value. For investors, the big question is how to assign value and risk to an asset whose scarcity is artificial and whose future is a blank slate. Over a dozen platforms are now selling real estate in the metaverse, with new ones sprouting up almost weekly. So far, real estate sales have been concentrated on the “Big Four” — Sandbox, Decentraland, Cryptovoxels and Somnium. There are a total of 268,645 parcels on the four platforms, all of varying sizes.
With the positive outlook on metaverse growth, companies have been heavily investing in virtual land properties. In October 2021, Tokens.com, a blockchain technology company, acquired 50% of virtual real estate company Metaverse Group for $1.7 million. In November, the Republic Realm broke records when it purchased a property in The Sandbox for a whopping price of $4.3 million.
Benefits of Virtual Real Estate
While metaverse properties are still in their infancy, given the popularity of NFTs (Non-Fungible Tokens) in general, values have been constantly rising. As a result, the land parcels are NFTs, a sort of blockchain-based digital asset.
People who aren’t tech-savvy don’t have to worry about this because the technology behind NFT protocols takes care of it automatically. For example, anyone may mint a digital file, such as a jpeg or mp4, into an NFT on OpenSea – the largest NFT marketplace by sales volume. This is a highly intuitive and simple process that only requires a few clicks.
These marketplaces can also be used by real estate corporations to purchase property plots from several metaverses, the most prominent of which being Sandbox and Decentraland. They have complete control and ownership of the land parcel because it is kept on their blockchain address.
Within metaverses, land parcels have already been tokenized and recorded in their individual blockchains. The good news is that, because blockchain technology is so open, anyone can see the transaction history, who owns it, and how much it’s worth right now.
The possibilities are endless, and we can compare actual and virtual real estate, with the following key differences:
- There is no need for an intermediary when buying virtual real estate.
- Land plots, unlike physical real estate, can be acquired with bitcoin.
- When you buy anything, you become the owner of it.
Additionally, besides just renting houses or condominiums in the metaverse, anyone can build virtual commercial locations like as malls or offices and rent them to real-world businesses.
How to buy virtual real estate
Metaverse land can be purchased through brokers and property managers, just as real-world properties. However, unlike in the real world, metaverse brokers do not require licences and are not subject to any restrictions. Therefore, it’s important to be sure that you’re dealing with reputable companies.
Purchasing a metaverse property is quite similar to purchasing an NFT. On a blockchain, your deed of ownership is a one-of-a-kind piece of code. This number verifies your ownership or rights to that digital plot of land.
So you’ll need your own digital crypto wallet to start your metaverse real estate empire. Before signing up for a new wallet, you should check out the platforms that employ various cryptocurrencies for their transactions. After that, go to the virtual metaverse platform and register for an account. To acquire land and other assets, you’ll need to link your digital wallet to the site. Choose a piece of property and buy it.
The shift towards digitalization can potentially reap big returns on metaverse real estate investments, but just like investing in physical real estate, research is key before you make any decision. Once you have truly understood the benefits of virtual real estate and leverage it for your goals, you will be able to live large in the metaverse.