Have you ever dreamt of land that you could buy with access solely through the computer? Where the computer acts as the gateway to your virtual utopia. This phenomenon where a piece of land on the blockchain platform is accessible only through digital means is called a Virtual Land, popularly known as the “Metaverse.” Here we are going to Discuss Virtual Land and its benefits and drawbacks in this article.
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What is a Virtual Land?
An intangible land that exists in the augmented world is a virtual land, which resembles the physical land and is also bought, sold, and rented like actual land plots with the help of cryptocurrency. Many virtual worlds allow one to purchase virtual real estate, games like The Sandbox, Decentraland, Axie Infinity, Bloktopia, etc. We are taking the virtual real estate market by storm.
To define the virtual land, one must know what a Metaverse is; The Metaverse is a digital universe amalgamation of multiple elements of technology like virtual reality, augmented reality, 3D modeling, and many more to construct a digital world. The upholders of the Metaverse believe in working, staying, playing, and keeping connected with friends through virtual trips, games, concerts, and conferences worldwide.
The term “Metaverse” finds its origin in a 1992 science fiction novel called the Snow Crash. It can be defined in the words of Matthew Ball as:
The Metaverse is an expansive network of persistent, real-time rendered 3D worlds and simulations that support the continuity of identity, objects, history, payments, and entitlements. It can be experienced synchronously by an effectively unlimited number of users, each with a unique sense of presence.
The Virtual Land Selling for Millions
In the recent flux of digital real estate, we have seen digital land selling for millions as investors lay their eyes on the booming multi-trillion dollar opportunities in the domain of real estate in the Metaverse.
The metaverse records keep breaking themselves. For example, we find a plot of land recently sold on The Sandbox for $4.3 million; according to The Wall Street Journal, Atari, a video game company, bought the virtual land.
The subsidiary of Metaverse Group set another record called Tokens.com who purchased digital land for $2.43 million, which is 618,000 MANA, on Decentraland.
The Sandbox is a metaverse that has a token called SAND, whereas Decentraland’s token is called MANA; these tokens are used to buy non-fungible properties where the land holds unique ownership of the digital asset while holding the capacity also to sell them.
An NFT can be anything from music, virtual land, or art.
Recently, $450,000, 71,000 SAND was paid by someone to become the neighbor of American musician Snoop Dogg.
Virtual land is gradually becoming a point of investment just as much as natural land; Metaverse groups are strategically choosing the locations of the lands that they buy; for example, Decentraland’s Fashion District is a raving location for high priced lands due to the escalating explosion in the field of the digital fashion industry.
What are the Benefits of Owning a Virtual Land?
The benefits of owning virtual lands are as follows:
A New asset in the investment portfolio
As a new asset class, digital real estate has seen exponential growth in terms of value and consideration by investors to invest. It has also become a viable storage of wealth, almost like the real world investments in art, gold, and real estate.
Due to alignment with the rapidly growing crypto universe, virtual lands are capable of returning the large sum of the investment. In addition, the ease of buying, selling, and renting has aided many to earn millions in a very short span.
A New Avenue of Income
The virtual lands have many utilities like real-world land where one can build art galleries, casinos, project advertisements, or rent it to others to build something on it to earn revenue.
Easier than Buying Physical Land
The major pain points like huge paperwork, maintenance of land, and taxes can be escaped in terms of virtual land which is exempted from all the hassle. Due to the blockchain platform, it is more secure and traceable to make land purchases there.
Low Entry Barrier
With less than 1% of the cost, the sky-high prices of physical land are countered with the low entry price of virtual lands. For people who cannot buy physical lands buying virtual lands would put less impact on their bank balance.
What are the Drawbacks of Owning a Virtual Land?
Metaverse Properties have a Limited Market
It should be kept in mind that the metaverse market is a niche, where the market is small, therefore one’s investment strategy must have this into consideration.
By comparison, there were $5.64 million homes that were sold in 2020, compared to 128,902 total sales in the domain of virtual land.
If the Metaverse platform shuts, the Investment fails with it
Investment can always be risky, and to address the elephant in the room, investment of any kind is laden with risks. However, investment in the Metaverse is considerably worse due to the fact that if the platform of investment lapses or folds one will cease to have any investment.
If the platform fails financially, the entire game with your virtual land can disappear but in terms of physical land, you cannot lose the rights to it unless there is a lapse in the paperwork or taxes.
Metaverse is not fit for the Real World
The Metaverse is an electricity-dependent and computer-intensive simulation of the real world, however, it is easy to forget that while embarking on the journey inside the world.
Bitcoin mining consumes 91 terawatt-hours of electricity, which is 0.5% of the earth’s power usage. Therefore it means it creates a lot of pollution and more carbon emissions in the atmosphere.
This can be helped by buying carbon offsets or finding more environmentally friendly ways to generate electricity.
The evolution and ever-increasing popularity of virtual land and virtual real estate are directly influenced by awareness of NFTs and their popularity. The fear of missing out(FOMO) on a particular asset class is the driving force of investment in virtual land. In this article, we explain what is a virtual land with the drawbacks and the benefits of owning a virtual piece of land. The millions of investments in the Metaverse should be the yardstick for new investors to measure the worth of adding this investment to their portfolio.