The future of real estate in the metaverse

Let’s start from the base: with “metavers“We mean a set of virtual worlds, more or less realistic and more or less 3D, that users can move in thanks to an immersive digital experience.

The term was invented by Neal Stephenson in Snow controlled (1992), cyberpunk science fiction book that describes a kind virtual reality is shared via the internetwhere you are represented in three dimensions through your avatar.

The fact that Microsoft Word does not know this term and suggests that I change it to “half verse” is a sign of how its popular use is much newer. It has only been widespread for a few months, due to Mark Zuckerberg, CEO of Facebook, announcing the change of company name to Meta on October 28, 2021, saying that “the metaverse will reach a billion people in a decade and create millions of jobs. “

Basically, the metaverse is a spatial representation of the Internet: real cities or regions where people can meet, work and play. In these environments virtual reality, social networks, streaming services, video games, e-commerce, artificial intelligence are related… Those who know video games like Fortnite or Animal Crossing can guess what we’re talking about. Even some recent animated films, such as Ralph breaks the internet or Space Jam: New Legendsillustrate how this kind of immersive experience can be.

The best known first metavers are Second Life, the virtual world where humans, represented by a digital avatar, could (and still can) explore different environments and territories. At the moment, the most talked about are SandBox and Decentraland, which have the characteristic that they each have their own cryptocurrency, with which you can carry out all sorts of commercial exchanges: buy a plot (digital), clothes (digital), works of art (digital) etc.

In the next few years we will see the big ones technology companies – from Facebook to Epic Games, from Microsoft to Nvidia – challenge each other in the creation of amazing and attractive worlds. The goal will be to become better integrated into our lives and make us spend as much time as possible in these parallel universes.

While we – fascinated or worried – are trying to understand something, there are already those who are trying to speculate in these new realities, with financial investments that can become very profitable in the coming years. Due to the massive purchase of digital spaces and constructions in these worlds, there is even a “property boom“.

“They buy them in the form of NFTs, that is, with a certificate guaranteeing their authenticity and ownership, and pay them in cryptocurrencies: to build and do virtual things with them, or to keep them for some time in hope to resell them in the future at a higher price.It’s a rather strange phenomenon and hard to understand for those who do not frequent this world, but it actually happens, with millionaire investments from some companies and with many individuals spending thousands of euros on acquiring ownership of small virtual spaces, “explains the post in a recent article.

This is the case with Tokens.com, which invested $ 1.7 million in land in the meta-verse in October. CEO Andrew Kiguel told The New York Times: “Instead of trying to create a universe like Facebook does, I asked myself, ‘Why don’t we go in and we buy the plots of land in these metaverses, so we can become landowners? ” “The challenge is to try to apply the same rules to these worlds as the traditional real estate market. “A plot in the city center, which has a lot of visitor traffic, is worth more than a plot on the outskirts. There is a scarcity value, ”Kiguel continues.

“Imagine being able to arrive in New York when there was only farmland and have the opportunity to get a plot of land in SoHo. Today, a block of real estate in SoHo is priceless, not in the market. The same will happen for the metaverse, ”says Michael Gord, co-founder of the Metaverse Group. Another company investing in this sector is Republic Realm, a virtual builder that recently paid as much as $ 4.3 million for 2,500 digital plots across 19 Sandbox worlds. It seems exorbitant numbers, but soon we could consider them ordinary operations. Some have made it worse: a user has paid $ 450,000 to buy a virtual property next to the famous rapper Snoop Doggs. In short, we need to start getting used to this extravagant news.

Back to Republic Realm: The company announced that it has acquired digital properties across 23 different metaverse platforms. The diversification of investments naturally serves to reduce the risk of bankruptcy, which, as in the case of cryptocurrencies, is very high. There have been several analyzes made in recent weeks call for caution: from the possible explosions of the speculative bubble to the doubts about the actual quality and attractiveness of these experiences that pass through the eternally present ecological question (these technologies have an enormous energy consumption).

The Economist reveals the paradox that investment firms may face: “The rise in virtual property prices is based on the take-off of the metaverse. But an expanding metaverse means less scarcity and lower prices. The laws of physics may prove to be easier to circumvent than the law of supply and demand. “

In short, the meta-verse is the new far west, with rules and notions to be written.

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