Real estate in the metaverse or virtual estate is already a booming industry. Snoop Dog and big corporations such as PwC, JP Morgan, HSBC, and Samsung have already purchased virtual land tracts that they want to develop for a number of reasons.
On the Metaverse, the demand for virtual land is also soaring. According to investors and analytics firms, sales of metaverse real estate exceeded $500 million last year and may double this year.
In just seven days in November 2021, the sector recorded a new high of $5 million in metaverse real estate deals.
There are various reasons why virtual land is experiencing an investment boom right now, and why it will continue to be a popular asset class in the foreseeable future.
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WHAT IS METAVERSE REAL ESTATE?
The metaverse, or virtual world, contains virtual land. The property may be utilized for anything, from a vacant lot to a mansion or even an art museum.
Virtual real estate are pixels in the most basic sense. However, they're more than simply computer photos.
They are programmable areas on virtual reality platforms where individuals may mingle, play games, sell NFTs, attend meetings, attend virtual concerts, and engage in a variety of other activities.
Virtual land is often purchased in an NFT marketplace such as Sandbox or Decentraland, and land ownership is documented on the NFT blockchain.
HOW DOES METAVERSE REAL ESTATE WORK?
The Metaverse is separated into virtual land segments, or parcels, that may be developed for use.
This means that a person or company can build something on the land to attract people, such as a music venue, an art gallery, or office space.
Anyone may buy land for bitcoin on the Metaverse. The land is a non-fungible token (NFT), which is a blockchain asset class that cannot be traded for cash.
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You may explore virtual real estate on one of numerous third-party reseller sites, such as OpenSea.io or NonFungible.com, once you've decided on a piece.
These websites can show you sales history if it exists, as well as allow you to do the same for adjacent houses that might be good comparables.
You'll need to create a digital wallet to store your digital assets, including the bitcoin you'll be purchasing.
You must also buy the cryptocurrency required for the real estate deal. If you're purchasing in Decentraland, for example, you'll need to acquire MANA coins. You'll need SAND if you're buying in The Sandbox.
Selling a virtual property operates in the exact opposite way. Someone else will click and go through verification before their crypto is swapped for an NFT, and your wallet will trade one NFT for a bunch of crypto.
WHY ARE PEOPLE INVESTING IN VIRTUAL REAL ESTATE?
They're appealing to investors because of two characteristics.
Firstly, just as in the real world, virtual property is in short supply. You may create income-generating properties like leasable buildings or interactive venues that charge admission or promote a brand if you control virtual real estate in a metaverse universe.
Playing Monopoly with virtual real estate is comparable. You'd want to buy as much real estate as possible.
When deciding which piece of land to buy, the location is critical. Areas with more user traffic will gain in value over time, regardless of how expensive they are.
Read more: 5 big brands that have already stepping into the metaverse
Secondly, each piece of metaverse real estate is completely unique, with a non-fungible token securing ownership (NFT).
Your virtual real estate NFT ensures your ownership while also allowing you to sale the property to another party. It also automatically records all of the transactions for that property, removing the need for title work.
Cryptocurrencies and NFTs have gained a lot of traction in recent years. And ROI is at the heart of every real estate investor's motivations, as any real estate investor will tell you.
Virtual land is viewed as a smart investment with the possibility for future profit by those who purchase it. You’ll see a return on their investment, whether it's in a community-based initiative or a 50-story skyscraper in New York City for commercial purposes.
The technology required to experience the metaverse is not yet widely available, and metaverse platform providers have yet to take significant steps to protect their customers' privacy and security.
Whether you're optimistic or pessimistic about the metaverse's future, it's clear that it's here to stay and will soon occupy a sizable portion of the Internet.
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