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What is Virtual Real Estate in Metaverse and Why is it So Popular?
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Investing in real estate has always been a staple of most people's investment strategies to hedge against inflation. However, contemporary real estate investors can also be interested in real estate that is less tangible: Virtual real estate.
Millions of dollars have already been spent on virtual real estate in digital worlds like Decentraland and The Sandbox by thousands of individuals and dozens of corporations. Large corporations like Adidas, Samsung, JP Morgan, and HSBC have already entered the metaverse, and many more are certain to follow.
Certainly, the immediate next question would be: What is this virtual real estate hype all about and why is it gathering steam in the real estate investment scene? Here we debunk the myth for you and why certain investors started to step foot into this emerging market.
What is it ?
Virtual real estate is also known as "Metaverse real estate." You may be wondering what "Metaverse real estate" is, since it is just recently coming to the attention of real estate investors.
The metaverse is an online environment where users may connect with one another and create their own digital world. Such an online environment caters for multiple purposes, from advertising billboards and commercial districts to conventional real-world brands selling their virtual merchandise.
As of the time of writing, Decentraland, The Sandbox, CryptoVoxels, and Somnium Space are some of the active platforms that provide major opportunities to buy virtual real estate. Only a finite amount of virtual lands are available on any metaverse platform. Because of this scarcity, investors are eager to get their feet wet in the metaverse now, before the finest locations are snapped up by others. You guessed it correctly, the mindset works the same way as if in actual real estate: Location, location, location.
Non-fungible tokens (NFTs) act as the "actual deeds" that safeguard the ownership of virtual real estate in these digital worlds. When you acquire a piece of virtual property, the transaction is recorded on the blockchain, and the NFT is sent to your cryptocurrency wallet.
Followed by that, a title is created for each piece of land, entered in a registry, and you are given a copy to show that you are the rightful owner. To give you a better understanding, it works the same way as if in actual world where proprietors of properties lodge their interest and particulars in respective land offices in order to show there is valid owner information being registered on a particular property.
Why is it so popular?
As mentioned earlier, virtual real estates come with various use cases where the owner of it is given the luxury to do whatever they want with the virtual plot of land they possess. Some of the virtual real estate in the metaverse might be put to a wide variety of practical uses as below:
Implementing Ads Campaign
Virtual land may be rented out for commercial use in the same way that actual estate is. Brands may contact you about placing advertisements on your virtual land or building if it is in a heavily trafficked region and visible to other users of the metaverse.
Coca-Cola, Samsung, and Volkswagen, to name a few, have all taken notice of this game-changing prospect and invested in digital billboards.
Hosting Virtual Events
After purchasing virtual real estate, its owner may host events such as parties, concerts, and business gatherings.
Anybody you choose may attend your events, and you can set admission prices, come up with a theme, and pick the decorations and entertainment.
Stars like Paris Hilton, Justin Bieber, and BTS are among the first to embrace the metaverse by throwing online dance parties. One of the most prolific Snoop Dogg fans in the metaverse, however, is an understatement. He went so far as to construct a house on The Sandbox platform, from where he hosts exclusive events like concerts and parties.
- Remote Workplaces
Many large and medium-sized enterprises now choose setting up virtual operations in digital real estate.
Users may collaborate in a metaverse-powered virtual workplace from the convenience of their own homes while making use of cutting-edge technology. Workers may interact, attend daily meetings and conferences, conduct professional training, and just enjoy chatting with one other over a virtual cup of coffee.
Companies the globe over have begun establishing virtual office spaces, PricewaterhouseCoopers and Prager Métis to mention just two.
Conclusion
No one now denies that the future is digital. In the future, we will have access to even more cutting-edge innovations that will propel us to greater heights.
Investment in metaverse properties is relatively riskier compared to conventional real estate. The hazards are substantial, to put it mildly. Investing in the virtual world is risky since it may not tied to any underlying asset. Large profits from investments in metaverse real estate are possible due to the increasing trend toward digitization across almost all businesses.
It is recommended that as an investor, acquire as much knowledge as possible about the metaverse before making any financial commitments. Know the probable drawbacks and obstacles, and compare them to the possible profits. If you haven't weighed all the benefits and drawbacks, you shouldn't make a choice.
