One of the most increasing markets is real estate. The virtual world, metaverse, has investors buying and selling different digital assets. These involve a variety, and the real estate space isn’t left out either. Investors can now buy and sell virtual land. However, what are they? Why is there increasing willingness from investors to pay millions of dollars for these assets? Please read on to find out.
What is a Virtual Real Estate?
Virtual real estate is getting popular in the cryptocurrency space. The manner of operating virtual real estate is similar to that of physical real estate. However, where does the difference chip in? One is available in a physical world while the other is courtesy of the technological era.
This metaverse allows several users to run businesses, play games, and be real estate investors. One important thing to note with virtual real estate is that the prices will increase. Therefore, you can invest with this in mind.
Read: Web3 and Blockchain: Impacts of Digital Asset Ownership on Business
What Are Virtua Lands?
With the emergence of the Covid-19 pandemic came the birth of virtual businesses, classes and even lands, and it is increasingly booming. However, what is virtual lands? These are plots on a metaverse platform and you can buy them as NFTs, non-fungible tokens. Therefore, they are unique and you can trade them. Also, a blockchain records its ownership, and the owner can sell through the ecosystem. Unlike the traditional real estate market with plots of land existing physically on earth, virtual lands are quite different. You can only find them online, where their location is in a virtual world, the metaverse, according to the techs.
Notably, the prices of virtual lands are increasing and they are as high as over 500% after Facebook transitioned to its new avatar, Meta. This shows that Facebook as a social media platform is also interested in the metaverse. Moreover, an increasing number of investors are venturing into virtual lands. The question is, why are they doing this?
Why Are Investors Buying Virtual Lands?
Recent news shows that investors are continually buying an increasing number of virtual lands, and the amounts are also high. For instance, someone paid $450,000 to be Snoop Dogg’s neighbour in Sandbox, a virtual world. The Snoopverse has a replica of what Dogg’s real mansion looks like, but this time in a virtual world. Also, in this metaverse, virtual events and concerts take place, and fans can get a peek into what Dogg’s life looks like. This is a way for artists to connect with their fans in the virtual world.
Moreover, one real estate development company spent $4.3 million on virtual land. These are but a few examples of selling virtual lands to investors. In this digital space, people can use their online representations, avatars, to virtually hold and attend concerts and meetings, and collect NFTs. Therefore, it is evident that buying of virtual lands by investors keeps growing. However, why is this the case?
- Unending Virtual Possibilities
One of the major reasons is the unending possibilities in the virtual space. In the metaverse, you can make money from a virtual land without having to own it. This is because the virtual world has numerous opportunities, and this attracts investors. The profit margin in a metaverse is higher, unlike the traditional markets. Therefore, investors buying virtual lands should keep up with the trends to know whatever opportunities are available. Also, this is important as the virtual real estate market grows and more investors keep adopting it.
- Huge Business Opportunity
According to one prediction, the market could stand at $800 billion by 2024. It is, therefore, not surprising to see Meta, Google, Microsoft, and other tech giants make a move in that direction. Additionally, The Sandbox and Decentraland have seen numerous individuals and corporations spend millions of real dollars in virtual lands. Therefore, this huge business opportunity in the metaverse keeps influencing recent announcements of businesses and corporations venturing into the market.
As you think about the numerous possibilities and the business opportunities in virtual real estate, you can first view it as a form of entertainment, and alter on considering it as an investment, and thus make a good decision of whether or not to join the bandwagon.
Also Read: Digital wallet NOVI by Meta
How Risky Is It?
Cryptocurrencies like Bitcoin and Ethereum are a common phenomenon. On the other hand, the idea of owning virtual land isn’t quite as popular. Notably, though, the buzz around this ecosystem keeps picking up pace. With the increasing surge in purchasing virtual lands, an investor in the real estate world might be tempted to buy one. However, one needs to trade carefully. This is because even the proponents of the idea have a warning, and they want investors to be aware that the business is risky. One key takeaway is for you to invest an amount that you are willing and prepared to lose.
Moreover, crypto in itself is highly volatile. Virtual lands also suffer from high volatility. This, however, does not mean that your investment may not reward you in the end. There are cases where investors receive massive rewards.
Notably, some proponents of the virtual world say that it is just as important as the real world. Therefore, the location of the property in the real estate market even for virtual lands is key. Also, areas with many people congregating, and lots of events taking place are more valuable than those with a lesser number of individuals or none. So, even your neighbour in a virtual world plays a role.
Must Read: The Metaverse Economy: 5 Greatest Functions of NFTs
Conclusion
The economy can grow in both the virtual world and the physical world. Therefore, whether you are buying virtual land or buying physical land, you can still earn a million’s worth, depending on the supply and demand. However, before investing in virtual real estate, it is important to know how risky it is, and as a tip, only invest an amount you can afford to lose. Moreover, it is not yet clear whether or not a majority of individuals would consider investing in virtual lands. Therefore, stay cautious before making a move toward virtual real estate investment.
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