What is the metaverse? How does it fit within the context of recent technological advancements in the real estate industry? And is it a safe investment?
If you have questions surrounding digital real estate and the metaverse, you’ve come to the right place. Below is a short guide to the exciting new world of buying virtual land.
What Is the Metaverse?
Before 2022, the metaverse was a theoretical concept. Essentially, it was a vision of the internet as an interconnected, immersive world that you can walk around, interact with, and touch. In the hypothetical metaverse, you might browse Wikipedia like a physical library; you could join Twitter as you would a public forum, listening to people speak and piping up when you had something to say; and shop at Etsy as though it was a craft fair.
In 2022, the metaverse got a whole lot realer than ever before. Facebook announced that it was no longer Facebook – instead, it would rebuild as Meta, a consolidation of its many assets into a single, VR-enabled, immersive experience.
Meta isn’t the only company dabbling in the metaverse. Microsoft, Nvidia, Roblox and others are taking a stab at structuring immersive worlds that realize the theoretical vision of a metaverse.
What Does That Have to Do with Real Estate?
The metaverse might not feature physical space, but it does feature a finite amount of digital space. And any time there’s a distinct, finite resource that consumers can interact with, it can and will be commodified.
That is essentially what we’re seeing with digital real estate. Similar to how NFTs draw inherent value from a speculative system of supply and demand, digital real estate runs on consumer sentiment, current supply and – ultimately – what consumers are willing to pay. In this way, it’s not entirely unlike real-world real estate!
The catch is that digital real estate typically runs on cryptocurrency. So if you don’t have a spare bitcoin or two lying around, there is an extra hurdle to cross.
Setting the Stage: Technology’s Growing Role in Real Estate
Digital real estate assumes its spot in a growing list of recent real estate technology innovations. If it weren’t for blockchain technology facilitating real estate tokenization or a real estate digital marketplace leveraging AI to shift power to consumers, there probably wouldn’t be a digital real estate.
As Regan McGee puts it, “technological advancements are beginning to gain real traction in a stalwart industry that was initially skeptical.” The founder and CEO of Nobul, a disruptive real estate marketplace, shared in an interview with Superb Crew that “we are witnessing industry-wide acceptance of new technologies” right now. Digital real estate appears to be the latest tech advancement, but it probably won’t be the last.
The Future of Digital Real Estate and the Metaverse
Unfortunately, it’s still too soon to tell whether metaverse real estate will become the next bitcoin (i.e., occasionally volatile but trending upwards) or fizzle out of memory like several other investment fads.
As Forbes reports, global businesses like HSBC, JP Morgan and Samsung have started snatching up digital real estate, which they intend to “develop.” And some individual users have bought real estate in the metaverse to store their digital collectibles. But they are quick to label it a “high-risk investment” at this time.
To recap, digital real estate is the latest trend in a world increasingly defined by technological advancement and digital twinning. It follows advancements in the real estate industry like blockchain tokenization and digital marketplaces. And no one is entirely sure yet if the concept has legs.
