AgentIndustry VoicesOpinionReal Estate Tech

Why are people buying virtual land?

Sotheby's and eXp already have virtual environments for their agents.

Our economy and how we interact with each other has evolved over the last 150 years in ways that would be inconceivable to people from the early 1900s. As we’ve moved from newspapers to radio to television and then on to the internet, social media, Google and YouTube, the real estate industry has embraced new technology to market themselves and their properties. Now, we’re on to virtual land and the metaverse.

The next technology frontier

Today, everything in our economy is either in-person or two-dimensional. So, the next step is 3D and 4D. There are many tech firms trying to perfect holograms, which are the future. Eventually, two-dimensional, flat-screen websites will become the newspapers of yesterday. 

Once holograms and AR (augmented reality) are perfected, people can visualize themselves in any setting without actually being there. Instead of buying something on Amazon on a flat computer screen, people will see themselves in clothes and inside stores through a hologram. You see it in the virtual world, then place the order for it to be delivered to your real world. 

This is the metaverse 

The metaverse won’t be one thing or place. Just like the internet has many websites, so too will the metaverse have many virtual worlds. Today they are just games, but sometime soon, these virtual worlds will move out of gaming and “just for fun” pastimes and businesses will find a way to reach their customers in these worlds.

And this is where owning virtual land will become valuable.

Stop thinking of land as only dirt. Instead, think about how the front page of the newspaper is laid out. The very top or masthead is considered to be the best “real estate” on that page. URLs (.com names) are also valuable real estate on the Internet. Facebook paid $60 million to acquire the name and trademarks for their new corporate brand called Meta. Online entrepreneurs buy and sell URLs for thousands of dollars.

The metaverse will be the next Internet, or Web 3.0, as it’s called. But just as gold, bitcoin and URLs are limited commodities, so too will be space in the metaverse. Ultimately, one metaverse will be more crowded and populated than others, and Facebook has the jump right now. I think the future of which metaverse will prevail has yet to be discovered.

One thing is for sure, wherever the most eyeballs are, is where the “virtual land” will be the most valuable. Right now, people who see the future are buying up space in the metaverse and HODL-ing (Holding On For Dear Life). Eventually, businesses will need that virtual land to advertise their products to the masses and that will be the value.

Virtual land is being purchased as NFTs, or non-fungible tokens, which is a form of cryptocurrency without the monetary component. The NFT represents ownership of that virtual land. Think of the NFT as the deed to that land. Because the metaverse will be in a decentralized blockchain format, that is how the NFT will prove ownership and secure its value. When the land is bought and sold, it will be done by transferring the NFT in exchange for cryptocurrency, which can then be used to buy real world goods and services or turned into cash.

There are real estate firms already getting into the metaverse. Sotheby’s International Real Estate has a storefront in the virtual reality game Decentraland. eXp Realty also has a virtual environment through Virbela for its agents. I’m sure many more have a plan to follow. 

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