The Metaverse is a concept that goes further than anything ever achieved in technology; it is so much more than just a virtual place for people to interact with each other.
The potential of the metaverse is unlimited; it will become the second world for humans, a place where every human imagination can come true.
Users can live as they want in this new virtual world, buy properties, travel, socialize, and even earn money.
What does it mean to buy property in a virtual world? What even is the use if you can’t ever access it physically?
Why is virtual real estate even a thing?
A significant portion of most people's investment portfolios has traditionally included real estate.
Most of that real estate, if not all of it, has been "real." But the modern real estate investor might also be thinking about something less tangible: virtual land. Building a virtual real estate portfolio may be the next big thing for investors who aren't hesitant to take a bet on cutting-edge technology. (1)
What is this virtual land?
Unique land with a deed in the virtual realm is virtual real estate. This environment can be compared to a video game but has more social and economic elements. Land in the metaverse, a network of virtual worlds where purchasing virtual land is possible, maybe just as expensive as real estate in the physical world and has even drawn the interest of famous people and celebrities.
Land plots in virtual worlds are referred to as metaverse real estate. They are pixels in the most basic sense. They aren't just computer photos, though. They are programmable areas on virtual reality platforms where users can interact socially, play games, advertise NFTs, hold meetings, attend virtual concerts, and carry out various other virtual activities. (2)
What makes real estate such an influential investment?
Real estate investing has a variety of advantages. Investors can benefit from consistent cash flow, good returns, tax advantages, and diversification with carefully picked assets, and it's also possible to use real estate to leverage wealth.
Rental income, appreciation, and earnings from businesses that rely on the property are how real estate owners profit from their investments.
Passive income, consistent cash flow, tax advantages, diversification, and leverage are all advantages of real estate investing. (3)
Why would you purchase Metaverse land? Does it even have any value?
After the social media behemoth, Facebook changed its name to Meta and declared its plan to invest in this virtual reality field; interest in augmented reality, virtual reality, and metaverse real estate greatly increased. The virtual real estate market may still seem like a weird place to invest in land parcels, though. In actuality, they resemble real-world real estate in many respects. (4)
Like in the real world, there is a limited amount of virtual property. Owning virtual real estate entitles you to a special plot of land in a metaverse environment that you can use for various purposes, such as developing rentable structures or interactive venues that charge admission or advertising a business.
Each piece of real estate in the metaverse is unique and is protected by a non-fungible token (NFT). An NFT is essentially a deed or proof of ownership for something physical (or digital) that can be uniquely identified.
People purchase virtual land because they think the value will rise. Additionally, it may serve as a status mark in the quickly developing metaverse.
Is it more than just a status symbol?
Purchasing virtual property in the metaverse is comparable to purchasing real-world possessions. This will quickly overtake real estate in the physical world as more people get interested in purchasing digital land in the metaverse.
Users who own digital land can make money by renting the property because it is simple to find business tenants. Your net worth will rise as a result of the land's appreciation.
In the game Second Life, virtual land transactions have been around for a while and have gained popularity.
But as the NFT market has grown in popularity, numerous multi-million dollar purchases of NFT virtual properties have recently occurred.
For instance, Decentraland NFT properties have recently sold for record prices; one virtual property sold in November 2021 for a record $2.4 million. The sale was conducted on the popular NFT marketplace OpenSea's Decentraland Collection, which now has close to 100,000 NFT lands and objects posted for sale, similar to most secondary market NFT transactions on Decentraland.
Suppose anything that exists digitally, including digital art and virtual environments, is included in the metaverse. In that case, the real estate plots that are being purchased can be considered as just one kind of metaverse investment, frequently classified as NFTs.
Your NFT for virtual real estate establishes your ownership and permits you to transfer it to another party. Additionally, it automatically records every property transaction, eliminating the necessity for title work. Consequently, complicated paperwork is no longer necessary. (5)
How and where to buy metaverse land?
Most people are curious about how to purchase land in the metaverse because the price of metaverse land is rising daily.
As with social media, the metaverse takes place on computer servers.
But unlike the metaverse, which offers full virtual living, social media only allows for exchanging text, photographs, and video.
You have a virtual life as an avatar in the metaverse, socializing with other avatars, attending live events, conducting business, and other activities.
Increasingly, brands are taking this seriously. While some, like Samsung, are establishing exhibition halls in the metaverse, others, like McDonald's, register trademarks for virtual eateries that ship meals to the physical world. (6)
Bringing back to the topic at hand, purchasing land in any metaverse has these five steps:
- Selecting the Metaverse
- Choosing the Land-Plot
- Creating a Relevant Crypto Wallet
- Making the purchase
- Verifying Transactions on the Blockchain
Here are the three best places for buying virtual real estate.
What is Opensea?
Like eBay, Etsy, and Amazon, OpenSea is a marketplace where users may buy, sell, and mint unique digital collectibles in the form of NFTs. The platform allows users to conduct direct, trustless transactions with one another because it is a decentralized, peer-to-peer exchange.
Software developers Devin Finzer and Alex Atallah established OpenSea in 2017 after becoming attracted by the introduction of the well-liked NFT series CryptoKitties and realizing the potential of NFTs to provide for the first time full ownership of digital goods. (7)
How does it work?
The marketplace on OpenSea is non-custodial, which means that no single entity is in charge of all of the transactions on the system. Instead, self-executing smart contracts that ensure fair trade enable transactions. On OpenSea, transactions either take place completely (the buyer receives the NFT and the seller is compensated) or not. Atomic transactions are what these are called.
There isn't an intermediary between the buyer and the seller on OpenSea because it's a peer-to-peer marketplace. Nevertheless, the site keeps 2.5% of each transaction. Costs incurred by competitors range from 0% to 15%.
The Wyvern Protocol, a collection of smart contracts on the Ethereum blockchain intended to make it easier to buy and trade unique digital assets, powers the architecture of OpenSea. The platform provides support for multiple blockchains.
How to buy land in it?
Multiple construction companies have listed their projects in the form of NFTs. This lets users experience the project before actually buying it physically.
To look at the available virtual lands, just search for virtual real estate, and you can choose from a wide variety of options, but be sure to vet these companies first.
After finding the NFT, you are interested in; you will have to load your wallet with the right crypto to complete the trade.
What is the sandbox?
The Sandbox is a play-to-earn game that combines blockchain technology, DeFi, and NFTs in a 3D metaverse. Players can use free design tools in its virtual environment to build and edit their games and digital content. The produced virtual items can then be commercialized as NFTs and exchanged on The Sandbox Marketplace for SAND tokens.
The native token of The Sandbox is the SAND token. It serves as the cornerstone for all game interactions and transactions. SAND can be acquired on cryptocurrency exchanges or earned by participating in activities and competitions in The Sandbox.
Users can create their avatars to access the various hubs, games, and settings on The Sandbox metaverse. The game can be compared to a blockchain-based DeFi version of Minecraft.
In 2018, co-founders Arthur Madrid and Sebastien Borget investigated the feasibility of building a 3D metaverse on the blockchain. They aim to let users truly own their creations as NFTs and earn rewards while participating in the ecosystem. The new Sandbox project was released in 2020 and has become one of the fastest-growing games in the crypto world. (8)
How does sandbox work?
Using VoxEdit and Game Maker, players can construct and develop their own NFTs, such as avatars, virtual items, and games. They can not only connect with other players using the virtual items, but they can also make money off of them by selling them on the Sandbox Marketplace.
With the help of Voxel Editor and the game maker, users can create an entire world in this game and then later sell these as registered NFTs.
How to buy land in the Sandbox?
To buy any land in Sandbox, you will first need to acquire SAND, the in-game currency that lets users trade in the Sandbox marketplace.
After you have loaded your wallet with the required amount of SAND, you can go to the Sandbox marketplace and browse the catalog until you find the property or land you’re looking for. (9)
What is decentraland?
An Ethereum-based program called Decentraland aims to motivate a global user network to manage a cooperative virtual world.
Users of Decentraland can explore, engage, and play games in this virtual environment while buying and selling digital property. The platform has developed over time to include user-interactive apps, in-world payments, and peer-to-peer communication.
Decentraland is a platform that enables users to participate in a communal virtual world, to put it simply. On its platform, it has developed a whole virtual ecosystem where users can trade collectibles, play games, buy or sell digital goods, mingle, interact, and explore. (10)
How does it work?
The protocol for the platform includes three layers. Decentraland keeps track of its users' land ownership in a ledger using smart contracts. It serves as evidence that the users possess the land they paid for. Additionally, it offers a P2P connection so that Decentralanders can engage and socialize with one another.
Owners of the land on Decentraland can profit by purchasing and selling it and renting it out to other site users. There are currently around 90,601 unique pieces of LAND that may be traded in the marketplace.
One of the network's highlights is the Decentralized Marketplace, where members can exchange the assets they control. Users can value their assets outside of the site thanks to the interoperability of the cryptocurrency network.
How to buy land in Decentraland?
Decentraland allows for registration via the Metamask wallet and MANA payments.
To buy property in Decentraland, you will need to buy its in-game currency for all the transactions in the marketplace.
Major cryptocurrency exchange sites offer MANA for purchase, including Coinbase, Binance, Huobi, and others. Therefore, you must buy MANA on these platforms and transmit it to Metamask. You'll also need enough ETH to cover transaction costs.
The parcel you choose can then be purchased or put up for bid. When you bid, you can set any price with an expiration date, and the owner will decide whether to accept it or not. (11)