Surely a metaverse plot is not really a land. A ‘risky’ crypto asset unlike any physical plot. People are buying digital land in metaverses, the latest craze to take the tech world by storm. However, experts say that this virtual real estate is more crypto assets than physical land. Experts say that digital land will be more beneficial for building experiences for brands than for investors who want recognition. Detail Kirptokoin.com‘in.
Warnings about the metaverse plot
If you’ve been following the trendy buzzword that has taken over the tech world lately, you’ve almost certainly heard of the metaverse. And if you’ve heard of it, then you may know that some people are buying real estate in the digital universe using non-exchangeable tokens (NFTs). $450,000 worth of plots were spotted on rapper Snoop Dogg’s song “Snoopverse.” A buyer was heard to have recently paid $2.43 million for a single piece of land. According to analytics firm NWO.ai, more than $100 million has been poured into buying metaverse real estate so far. But there is a problem with equating digital real estate with physical one: the primary sources of value that apply to real-world properties are not valid in the metaverse, meaning your virtual land may not increase in value. Experts said these purchases are more of a crypto asset than anything else, they are speculative and “risky” to buy, anything related to the metaverse right now, or anything blockchain-based for that matter. “I’m sure there are people who will make a lot of money in the short run,” said Louis Rosenberg, 30-year AR development expert. But in the long run, it makes no sense.”
It may be too soon to speculate on metaverse plots
A major factor pushing people to invest in digital real estate is the growing popularity of metaverse land and NFTs. People enter a metaverse like Decentraland and can use the ecosystem’s digital assets to purchase land. They can then buy, sell, or lease the space. Like anything in the crypto space, “if there are enough people willing to spend money on it, then it becomes a market,” said Dexter Thillien, a tech analyst. But there are two main things that supposedly give metaverse real estate its value: scarcity and location, the two foundations of physical real estate. Experts said they don’t fully apply to the metaverse, as you can’t artificially introduce scarcity. For this reason, experts say potential investors should be aware that their virtual lands may not appreciate in value as they expect. Expert Janine Yorio believes that the lands will be used more for brands to create social experiences. “I believe that those who buy land purely for capital appreciation take a greater risk than those who develop attractive activities and experiences on it,” says Yorio.
The constant shortage of supply is already the main source of value for most of the crypto world, such as Bitcoin, which has a limited capacity of 21 million tokens. “Proximity to the important things, events and entertainment also creates value in the metaverse,” said expert Stan Miroshnik. But Owen Vaughan, director of research at blockchain company nChain, said there should be guarantees that these platforms won’t change the game and won’t affect the value of people’s property. “Physical real estate is changing slowly, but what can a metaverse platform change at the click of a button?” said Vaughan. Miroshnik said the investment may be speculative, but it’s still a “visionary” move, even though many investors do nothing with the land they buy.
Whether visionary or misguided, Rosenberg feels the metaverse real estate market is struggling because it just doesn’t make sense to speculate on land within this technology just yet. “In the Metaverse, we don’t even know which locations will be popular on which platforms,” Rosenberg says. And he adds: “And that’s like someone who buys a piece of land somewhere in America and hopes it’s San Francisco or New York.”
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