In the metaverse, the announced and for now experimental virtual world in which Mark Zuckerberg would like to transfer an important piece of people's lives in the next few years, there is already what in other contexts would be called a “real estate boom”. Many platforms that aspire to occupy a space of this new type of online social networking platform, which will be built and managed by Facebook and probably by several other tech companies: there are people who buy digital spaces and constructions at a high price.
They buy them in the form of NFTs, that is, with a certificate that guarantees their authenticity and ownership, paying them in cryptocurrencies: to build and make virtual things with them, or to keep them for some time in the hope of reselling them in the future at a higher price. It is a rather strange and difficult phenomenon to understand for those who do not frequent this world, but it is actually happening, with millionaire investments by some companies and with many private individuals who spend thousands of euros to acquire ownership of small virtual squares. It could be profitable and forward-looking investments, or a new big bubble poised to burst; a bubble that would be real estate, financial and digital in one go.
Many have only become familiar with the metaverse expression for a few weeks, after Facebook changed its company name to “Meta” and announced its plans for it, but it is a word invented in the early 1990s and subsequently used in reference to three-dimensional spaces. and virtual where you can do many things: for example, walk, chat, shop or attend a virtual concert. As you imagine it today, the metaverse is a sort of evolution of what Second Life was or what is still GTA Online, something similar to the virtual reality of the book and movie Ready Player One.
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In the most optimistic hypotheses of those who believe it is a good idea, the metaverse will be huge, crowded and full of things to do and buy. It will always be active, parallel to the physical world and in many ways able to overlap it. As it happens now with the Internet, but much more.
There are many who want to create and manage the metaverse, not just Facebook. At the moment, however, there is not one and only integrated metaverse, but many autonomous metaverses, many virtual platforms that aspire to become the main metaverse or at least to manage certain aspects. There is something of the metaverse in games like Fortnite, Minecraft and Roblox, and in platforms like Sandbox or Decentraland.
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Decentraland, for example, is a virtual world accessible only from February 2020 but whose lots have been on sale since 2017. The cryptocurrency with which you buy them is called “mana”, a sidechain (a derivative and parallel currency, and for this reason even more volatile) of ethereum. At the moment a mana is worth about three dollars, but a few weeks ago it was worth almost five. At the beginning of 2021, instead, it took about ten mana to make one euro.
Decentraland is made up of just over 90 thousand plots: at the beginning of the platform, you could buy one for about twenty euros, now those that cost less are sold for 12 thousand euros, and there is a company that has paid almost a million euro for 259 small pieces on which to make a virtual shopping center. As in other similar platforms, in Decentraland there are areas dedicated to shopping, art or gambling.
Basically, to buy one of these plots of land you need to have certain cryptocurrencies in special wallets, dedicated virtual wallets. Those who have a wallet with the required amount of cryptocurrencies can then go to the sites of these platforms or other external resale markets (for example, OpenSea, a well-known site for the sale of NFTs), choose a plot and pay for it, perhaps by participating in a auction. Often the plots are nothing more than squares or rectangles of a large map, identified by specific coordinates.
The value of the land is given by the perceived importance of the platform on which they are located, but also by their centrality or relevance within the map: even there, as in physical life, a land in the center generally costs more than one in the suburbs. . And even there, if you want to make an investment, it is worth having land in places that hopefully will be or will become virtually trafficked and frequented.
After buying a lot, you can build or make things happen in it in an attempt to increase its value. The more neighboring lots you buy, the bigger the things you can do. And it is also possible to rent lots or buy others with buildings already built on them. As in reality, there are already consultants and real estate agencies for metaverse, one of which is called Metaverse Properties.
The reasons why large companies and small investors buy and sell plots and virtual real estate are many and not always clear. First of all, as well as certain other NFTs – from artistic ones to collectibles – because they are a way to invest cryptocurrencies, or to make sense of them. Just as, according to those who believe in the potential of this sector, those with tens or hundreds of thousands of euros can buy paintings or invest in “brick” or gold. Obviously, to many more than an investment it seems simply a risky bet, based on the passenger and naive enthusiasm of thousands of enthusiasts who around the world have found themselves with sudden and huge amounts of virtual money to spend, and crazy ideas about what a true value and what not.
But in history it has always happened that objects, materials or stocks of any kind quickly acquire an apparently disproportionate value, consequent to the growth in demand. A phenomenon that often feeds on itself, pushing more and more people to buy these goods only because they fear being cut off from the “next big thing”, that is, from something that is about to become large and extremely profitable.
The fact that newspapers, sites, social profiles and YouTube channels have talked about these matters has only magnified the thing, especially when they give space to those who have a direct interest in attracting attention and fueling enthusiasm. “It's like buying land in Manhattan 250 years ago, when New York was starting to be built,” Andrew Kiguel, chief executive of Tokens.com, a cryptocurrency firm that spent over a quarter of an hour in October, told the Wall Street Journal. million and a half dollars to acquire half of the Metaverse Group, which deals with virtual real estate businesses. In addition to being based in Toronto, the company has its own “headquarters” in Cripto Valley, a location within Decentraland that the New York Times described as “the version of Silicon Valley in the metaverse”.
Thanks to virtual land in the metaverse, there are those who, by selling after buying, have actually earned a lot of money. And probably, especially on certain platforms, there is still room to earn, as long as you want to risk the considerable sums you now need to buy something. However, it is equally probable that many others will try to invest tempted by the profits vented, will mistake the moment or platform and will be left with a useless and empty virtual lot that cost perhaps thousands of euros, screwed up by what Wired recently presented as “the illusion of running to the land of the metaverse “.
According to Eric Ravenscraft, author of the Wired article, the most serious problems are that there are many metaverses and the only metaverse is still only hypothetical: the doubt is about how plausible it is that the metaverse really becomes something comparable to what is now the internet . Even in this eventuality, it is not easy to understand which will be the right and dominant one and which will become digital desert. For Ravenscraft, neither question can be answered, and therefore any investment represents a huge gamble. Especially given the high prices of these virtual lots, which make it very difficult to diversify investments between multiple platforms, in the hope of guessing the hypothetically correct one.
Ravenscraft then argues that, to explain and bring abstract concepts back to something practical and tangible, we often talk about real estate activities in the metaverse with too simplistic terms, tracing expressions typical of real estate activities. The intuitive difference is that real estate activities take place in a finite world with limited spaces, while those of the metaverse develop into something that tends towards infinity. In fact, it is possible to create various metaverses, with new worlds and new cities, in each of which infinitely high skyscrapers can be “built” (actually programmed and created digitally).
«Buying 'real estate' on these platforms» wrote Ravenscraft «is like buying land in Manhattan, but in a world where anyone can create an infinite number of Manhattan alternatives that are equally easy to reach».
For his article, Ravenscraft also took a virtual walk through the streets of Decentraland. He described it as a world still rather empty and disappointing, frequented only in some of its key points: for example the “fashion district”, the fashion district, presided over by advertisements from companies such as Chanel, Tommy Hilfiger or Dolce & Gabbana, but which for now, however, it does not offer much to do. Ravenscraft wrote that more than a world in the making, in Decentraland he saw “the facades of a film set” behind which, however, there is still nothing. “It is a ghost town in all respects,” he wrote, highlighting the lack of graphics of the platform, its many bugs and the few controls on the sometimes offensive names used in the game.
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Santa has had a bit of trouble navigating around #Decentraland ever since his compass stopped working, try to find his where whereabouts and give him some direction so he can finish his journey!
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– Decentraland (@decentraland) December 24, 2021
Like the technologies on which they rely, even the lands in the metaverse are in short an issue on which there is a huge difference in perception between those who deal with it and are directly involved and those who observe the phenomenon from the outside. The former usually accuse the latter of not understanding.
Perhaps these lands are a piece – literally – of what could be the future of technology, and therefore of the economy, and therefore the equivalent of what Amazon shares could have been twenty years ago or a handful of Bitcoin ten years ago. Maybe in a few years many of us will have an avatar in Decentraland, and in addition to paying for virtual land, they will buy virtual wardrobes in which to store virtual coats, to be used in what is already referred to as the “omniverse” (the union between the real and the metaverse). Or maybe, some sketches of metaverse will continue to grow for a few months, allowing many to take risks and earn money before the bubble bursts.
It is possible that one or more metaverses suddenly lose value, perhaps because they are replaced by something better and more interesting, and that many people find themselves with land without value. For example due to an unexpected devaluation of mana. As always happens when everyone wants to sell and nobody wants to buy, someone will be screwed.
In the meantime, however, there are those who speak of embassies and cemeteries in the metaverse, and among the platforms that are getting noticed there is SuperWorld, a virtual world that traces the real world (the Earth, in short) and is divided into 64, 8 billion bits, each for sale as NFT. Unless you live in Manhattan or in front of the Colosseum, there is good reason to believe that your home square can be bought for a few hundred euros. In case you are thinking about it it is the case, as Fortune wrote, “to first come to terms with what truly is digital terrain: an intangible space in a virtual world”, a bet that in turn represents “a bet on the future of the metaverse itself “.
