What Is Digital Real Estate?
For a long time, digital real estate (or virtual real estate) meant internet properties that could attract web traffic. At first, this meant websites, e-commerce stores, blogs, and similar domain-based "real estate." Web 3.0 brought apps and app stores into the mix.
Like real property, this digital real estate had both practical and investment value. On a reasonable level, virtual real estate could host commerce, conversation, entertainment, and services like real property.
Once digital real estate developed commercial value, it was only a matter of time before it attracted investors. Much like traditional real estate investment, there's a long-term strategy and the virtual equivalent of house flipping. Domain flippers buy up expired domains, then "refurbish," monetize, and profit from them.
Many people were skeptical about the value of digital real estate investment, but by now, it's well-established. With some foresight, business savvy, and a little luck, digital real estate can appreciate much faster than real property.
With the rise of the metaverse, "digital real estate" is taking on a new meaning.
What is the Metaverse?
The term metaverse gained widespread awareness after Mark Zuckerberg started pushing his capital-M Metaverse product. But Zuckerberg's floating-torso world is not the only metaverse – or the first.
Many believe the metaverse is the future of the internet – the next generation of technology.
In many ways, it's an old idea: virtual worlds you can move through and interact in much as you do in the real world. It's just taken us this long to reach a point where technology can almost support a true metaverse as opposed to the little worlds developed by gaming companies. The metaverse occurs (or will happen) on a larger scale.
What is Virtual Real Estate in the Metaverse?
Digital real estate in the metaverse is easy to understand – it's the in-universe equivalent of buying real property. Due to the nature of the metaverse, it will almost certainly look like real property, and many familiar attributes like scarcity and location will carry over into dictating its value.
We're in the early stages of metaverse development, so the rights and attributes attached to metaverse land and property depend on the specific metaverse platform. Everyone's just dabbling in their own version of digital property ownership. After all, the rules of each metaverse world are virtually limitless, dictated only by our collective imagination.
How Do You Buy Digital Real Estate?
Right now, when you think about how to buy land in the metaverse, the most crucial question is, "which platform?"
Because while, in theory, the metaverse will eventually be one giant interconnected world, right now, it's very much a series of walled gardens. The process for how to buy digital real estate will depend on the company and the "world" you're trying to buy with.
Where To Buy Metaverse Land
Many metaverse platforms are up and open for business. Each has several "worlds" to choose from.
As we close out 2022, popular platforms include Decentraland, The Sandbox, Roblox, and many more.
It's worth noting that, at the moment, many worlds on these platforms have big "Coming Soon" asterisks on the gate.
How To Buy Land In The Metaverse
As we said, the "how" will depend significantly on the "where." The existing platforms have two central schemas: play-to-earn (P2E) and pay-to-play (P2P).
P2P involves spending real currency to gain virtual-world value, while P2E allows you to build in-world value with in-world effort. In a P2E world, players earn digital assets as cryptocurrency or NFTs created via blockchain technology. These can be traded with other players, but most importantly, virtual assets have real-world value.
You can imagine that a future metaverse will have P2P and P2E avenues that allow value to flow freely back and forth between real and virtual worlds. But the advent of P2E options is crucial to making digital real estate work as an investment vehicle.
Will Digital Real Estate in the Metaverse Be Valuable?
It's hard to say. Indeed, the people who were skeptical about the value of old-school digital real estate were proven wrong, leading many to believe that metaverse real estate will pan out the same way.
On the other hand, that ignores the dot-com boom – or, more importantly, the resulting bust.
Right now, the final form of the metaverse is unclear. Everyone's testing ideas and platforms. Some of those platforms will succeed, while others will go bust.
If you're considering getting into digital real estate purely for investment, that's important to keep in mind.
How To Become A Real Estate Agent In The Metaverse
As an "IRL" real estate agent, you probably don’t need to be sold on the need for digital real estate agents. If metaverse virtual real estate takes off, buyers will need help navigating the legal and financial realities (and risks) of purchasing digital real estate just as they do with real property.
There's no formal process for becoming a metaverse real estate agent like earning a real estate license. At this point, it's going to be about keeping your finger on the pulse and educating yourself on relevant technologies and trends and the legal and regulatory landscape once that starts to emerge.
Written and Published by: VanEd