The term “metaverse” was first coined in the 1980s by novelist Neal Stephenson. In his novel titled Snow Crash, he describes the metaverse as a virtual place where people could escape the current reality, which was a totalitarian apocalypse. Fast-forwarding a few decades to the announcement that Facebook would be changing its name to Meta Platforms Inc. (doing business as Meta), and the question that comes up is what, exactly, is the metaverse?
Wired magazine refers to the metaverse as a hugely complex term that can encompass everything from virtual 3-D worlds to digital economies. And, speaking of the latter, real estate is starting to make moves into the metaverse, with people buying digital real estate with help from cryptocurrency.
In April, metaverse land developer TerraZero Technologies developed one of the first metaverse mortgages, allowing a client to buy virtual property in Decentraland, an Ethereum-based metaverse platform. Virtual property is fast becoming an investment tool; in 2021, it was estimated that sales of virtual properties exceeded $500 million, and sales are anticipated to double in 2022.
In fact, prices for some metaverse property plots are selling for millions of dollars — and PricewaterhouseCoopers, Adidas and Warner Music Group are all investors. They (and other investors) are putting their virtual dollars to virtual platforms: The Sandbox, Decentraland (the brainchild of J.P. Morgan Chase), Cryptovoxels and Somnium Space.
Virtual property owners are planning to do more than hold the digital land. HBSC, for instance, acquired a plot of virtual real estate with plans to build a virtual sports arena on the site. And Republic Realm topped off 2021 with the largest ever acquisition in The Sandbox, about 1,200 city blocks of land for $4.2 million. Republic Realm is partnering with Atari to develop a “voxelated” gaming environment similar to Minecraft. Voxels are defined as three-dimensional digital representations of images or objects.
Owners of metaverse land can do anything they want with their holdings: develop, sell, lease, or any other uses. The National Law Review reports that owners can develop office buildings, build and operate store fronts, or even erect advertising billboards.
The Law Review noted that, “as consumers and businesses adopt the metaverse, advertising spending is expected to follow.” As blockchain becomes better understood, and digital mortgages, financing and real estate becomes more accepted, expect the price on those voxelated plots to continue increasing.
Amy Wolff Sorter is an editor at connectcre, where this article was originally published. Read it here.