There's a lot to contemplate when it comes to investing in the future of metaverse real estate. Will the virtual land boom follow in the footsteps of actual commercial property or land in the real world? Will it incorporate all of the same speculations and considerations?
While all investments include risk, the metaverse is no exception. The metaverse will be a collection of limitless virtual worlds where everything is connected and shared. This makes it very easy to move around and have conversations, but it also makes it possible for businesses and people to own land in the metaverse. It's a way to represent an asset that can be exchanged for crypto or real money. Virtual land also comes with many interesting opportunities, users can rent out their virtual land, or even turn it into a business to sell products and services if they choose to do so.
Millions of dollars are being spent today on the purchase of virtual land and stunning architecture that you can't wait to explore. It is regarded as a wise investment with the potential for future rewards by those who purchase it. Some investors predict virtual land would follow in the footsteps of Bitcoin's success when it was originally established, making virtual land similar to Bitcoin.
But wait, if the metaverse is limitless, the question we should be pondering is how do you put a price on the seemingly limitless virtual real estate in the virtual world?
We should acknowledge that some digital assets, despite being infinitely expandable, are deliberately sold to the amount necessary to generate digital scarcity. Just because they are growing increasingly popular as time goes by doesn't mean there's an endless supply.
There is a finite amount of virtual land, just as there is a finite amount of Bitcoins or Ethereum. Even though some people think they're digital it doesn't mean there's an infinite amount of them.
So, should you or your company invest in virtual real estate? It's entirely up to you what you do with this knowledge, but let's learn the lessons from the million dollar homepage from 2005:
A bright young man in the United Kingdom decided to support his college education by creating a website where anyone could buy a pixel for a dollar to promote their business, service, or product. It was called the MillionDollarHomepage.com, and while it still exists today, it used to be a thousand pixels wide by a thousand pixels high, meaning that one million pixels could be purchased within it. Albeit most of the graphical content on the Million Dollar Homepage is promotional, it's not hard to imagine that people wanted to buy up square pixels on the site because they were enamoured with the very idea of owning a finite amount of digital space.
It sounded fantastic, but how would it function in practice? Anyone could simply buy as many pixels as they wished and place an image in that area, similar to how you can buy a piece of virtual real estate in today's virtual world that is unique and secured by a non-fungible token (NFT). This concept was seen to be incredible, and that might be the future of advertising. Before you knew it, all of the squares were sold out, and this industrious young man had made a million dollars.
Fast-forward to today, while many customers who purchased these original pixels never truly saw a return on their investment, arguably some may have gotten brand awareness as a result, one thing is certain: it made the creator wealthy. This story has similarities with what is happening in the metaverse and virtual land today.
When you think about it, owning virtual land has intrinsic worth. Just like owning actual real estate does not guarantee that we will see a profit on every investment, it can often lead to rewards for those who are fortunate enough to acquire at a discount before hopping out at the perfect time or leveraging it in a commercially lucrative way. The same may be said for metaverse entrepreneurs and investors who get in early, especially now that virtual reality is becoming more ubiquitous, as indicated by a slew of recent news releases.
As a business putting all of your eggs in one basket by investing entirely in Decentraland or The Sandbox for example is a considerable risk, there won't be just one virtual world or metaverse; there will be a slew of them (e.g. Bored Ape's Otherside), all vying for your attention. Apart from today's expensive virtual land, where you can set up virtual stores, advertise, and sell your products or services, there is still so much untapped potential and other intriguing ways for businesses to enter and leverage the metaverse, but that's a long and deep discussion for another day or over virtual coffee in the Rec Room 😉
What do you think about this topic? Let me know your thoughts! Don’t hesitate to connect via LinkedIn or contact me. I’d be delighted to chat.
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