Dive Into Digital Real Estate World
The quickly evolving digital real estate industry, and the metaverse, receive frequent coverage on news sites worldwide. However, those reporting on both topics often provide little explanation on what they are or how they work.
As a result, many of us may struggle to understand digital real estate, the metaverse, and the connection between the two. But don’t worry: we’ll answer all of your questions below!
What Does the Metaverse Have To Do With the Digital Real Estate Industry?
Let’s start our guide to virtual real estate by clarifying what the metaverse is and how it works.
The metaverse consists of many 3D environments designed for users to interact with one another as they would in both the real world and video games. Want to meet up with friends? Looking to attend an eye-opening educational event? How about buying something nice — such as a piece of virtual real estate?
There’s a wealth of metaverse worlds out there, but just one metaverse. And, thankfully, you don’t have to invest in any high-end gear to access it. You can dive into some of the most well-known worlds with a standard computer or your smartphone.
How Can You Buy Digital Real Estate?
Real estate in the metaverse is similar to real estate in the physical world, though with some obvious contrasts. Look at it like investing in land on the Moon or Mars, where there are still rules, albeit significantly different rules from those on Earth. Wherever you buy virtual real estate, though, there are only so many plots available on a platform — creating scarcity and facilitating more stable values.
Any virtual land you buy will have certain attributes depending on which platform you use. Generally, on platforms designed to be more realistic, these are restricted to size and location, which you can check out on the world map.
But with platforms focused more on gaming than realism, your virtual real estate could also have extra attributes, including natural resources available for mining and sale.
How Can You Use Digital Real Estate?
Today, companies and individuals investing in real estate are exploring digital real estate to discover its limits. However, plenty of common use cases have been developed already.
Such as? One example is launching your own virtual billboard enterprise on your digital real estate — providing businesses with space to promote their products or services. Another option would be setting up a mall or complex, with individual units available for rent. Either idea could create a passive income stream.
Furthermore, companies are taking advantage of the metaverse by constructing virtual replicas of their headquarters to hold digital staff or client meetings. This method can expand a business’s footprint, offering virtual ways to build connections and reach target audiences.
Some major names in the fashion world have embraced virtual apparel through the metaverse, too. They use the virtual real estate they own to sell one-of-a-kind clothes for user avatars, with non-fungible tokens (NFTs) offering an entirely new way for those brands to generate revenue.
Why Should You Buy Digital Real Estate?
Wondering why it’s worth anyone’s time and money to buy real estate in a virtual world? Asking what the point is if you can’t step foot in the property for real, let alone touch it?
Well, there are some compelling reasons to consider. For starters, think back to the internet’s early days, when most of us were just beginning to visit web sites and buy goods online. It might have seemed like an odd decision to purchase a domain back then — but that has become a crucial part of running a business today.
Buying real estate in the metaverse is similar. Some users buy digital real estate to hold on to it, but others invest with a clear goal. For instance, you could purchase a parcel big enough to launch your own virtual entertainment space and book performers exciting enough to secure ticket sales. Or you could rent properties out to businesses or individuals who may be uncertain about buying their own digital spaces yet.
As in the physical world, virtual real estate is considered valuable because others will be interested in owning it as well. There are a few key attributes to bear in mind when exploring a virtual plot’s value too.
One of the most important is that every piece of digital real estate is unique — that’s why people buy and sell them with NFTs. The virtual property is unique and, as a result, non-fungible — it can’t be traded for another item on a like-for-like basis.
What makes a property unique? That could be its position on the map with regards to other locations, such as shops or attractions, while resources could also boost a plot’s value.
You’ll be provided with a virtual form of deed when you purchase digital real estate: data proving you’re the owner is retained as an NFT on the blockchain. This token is your proof of ownership, but you’ll pass it on to any other user who buys the property in the future.
Your digital real estate will be secured with the NFT in your ownership for as long as the respective metaverse world persists. It’s up to you what you do with it, whether you want to rent it, sell it, or invite other users over to explore it.
It should be noted, though, that not every metaverse world allows for the sale of real estate based on NFTs.
How Do Virtual Worlds Persist?
It’s vital to look at the history of virtual worlds when considering the future of any virtual real estate you own. People may wonder what will happen to your property if the metaverse world in which it exists vanishes and you have an NFT proving that you own, well, nothing!
Fortunately, a virtual world may persist for a significant period of time while they have a community of users invested in its existence. This applies to worlds built years before the concept of digital real estate emerged, as with the Second Life platform. This was created in 2003, but still has a large user base despite its modest size when compared to current metaverse worlds.
Additionally, a number of metaverse worlds are protected by owners of virtual land and currency, as they have voting rights within those worlds. For example, they may be able to vote on whether the world should stay online if necessary — no individual or entity has the power to close a metaverse world down, due to their decentralized nature. It must be a global choice instead.
So, can you rest assured that the value of your chosen platform will never drop to zero? Sadly, no — a platform isn’t necessarily valuable because it stays online. The value is typically due to the community involved. That’s why it’s crucial that anyone who owns digital real estate actively takes part in their worlds.