Metavers: You can’t walk on this land or build a house, but plots still sell for thousands of pounds | Scientific and technical news
Johnny McCamley has spent nearly £5,000 on land.
But he cannot physically walk on this land – and he cannot live on it or build a house on it.
That’s because the 23-year-old’s investment is in the metaverse, meaning his country is completely virtual and only exists in a digital world.
Mr McCamley, from Belfast, is one of many people who have decided to buy a virtual property in the metaverse.
Last year, virtual land transactions reached $350m (£267m) in The Sandbox, the largest digital property platform, according to a report by the Center for Finance, Technology and Entrepreneurship.
Additional transactions worth $110m (£84.2m) were made in Decentraland, the second largest metaverse platform.
What is the Metaverse?
The metaverse is not a single digital space. It is a network of virtual reality worlds, set up by companies and platforms, where users can interact, play games, attend events and buy land.
A better known metaverse is Horizon Worlds. It was created by Facebook, which has now changed its name to Meta as the tech giant focuses on virtual spaces.
Other brands have also announced their own digital realms.
Manchester City plans to build the first Metaverse football stadium in partnership with Sony.
Mr. McCamley, the managing director of CryptoClear, bought his land in The Sandbox last October. He said: “There are casinos in the metaverse, there are also museums, but there are also events such as podcasts and also conferences that I have attended. So the best way to see the things is to take the real world and really digitize it way beyond the likes of Zoom.”
Why do people buy virtual property?
For Mr McCamley, the chance to claim a property in this fantasy world was an opportunity not to be missed, despite market uncertainty and price volatility making it a risky investment.
“It’s like any new investment, any new asset class. When I got into Bitcoin when it was $300, I was told it was extremely risky, same with Ether at $4. I think that getting land at Decentraland for $4,000 is an absolute bargain,” he said.
He intends to keep his purchase for 10 years: “I think the metaverse will mature in about a decade and I will think about selling the land when the time comes.”
Landowners can also use their virtual spaces to design experiences for others to enjoy.
“Community owned land is my favorite. A very, very good example is, I believe it’s a ‘gecko beach’ that someone made which, as you might guess, is a beach full of geckos,” says Mr McCamley.
House search in the virtual world
The search for the ideal home in the metaverse is similar to real life.
Land next to roads and close to popular areas such as fashion or museum districts will have a higher price and will be more attractive investment opportunities.
In The Sandbox, busier central areas near other landmarks are much more expensive than newer neighborhoods on the outskirts.
Who your neighbors are will also affect your property value.
In September 2021, rapper Snoop Dogg announced his own digital “Snoopverse” in The Sandbox.
Two months later, a property next to his land sold for over $450,000 (£350,000).
But, unlike traditional real estate purchases, there is no third party or legal presence that can guarantee the legitimacy of the transactions.
This can be risky when buying on a secondary market such as OpenSea, where purchases are made using cryptocurrency.
Why do people build virtual property?
In addition to landowners, there is a new generation of “meta-architects” who design virtual spaces.
Stavros Zachariades is a traditional architect working in south London, but started designing for the digital world during the pandemic after his brother Adonis founded Renovi, an NFT marketplace.
The 37-year-old recently designed pop-up stores for Metaverse Fashion Week.
“The appeal of the metaverse and building in the metaverse is [people and businesses] can show what it’s all about,” Zachariades said.
“They can show off their products. We can provide meeting spaces for different people, especially now with COVID and the last two years where people are more distant.
“You can have, from the realm of super sci-fi, floating buildings that spin and morph – and on the other side of the realm, historical and classic styles of architecture.”
He thinks the metaverse could open doors for those who lack connectivity in real life: “I was thinking about how accessibility can change, for example, someone who doesn’t have the same mobility can just be an equal in the metaverse. Why not?”
“It’s just impossible to know what the endgame is”
But many warn that these investments could fail.
YouTuber ‘Mitch Investing’, from Birmingham, regularly delves into topics like personal finance and emerging tech on his channel.
He thinks the promises of the metaverse becoming a part of our daily lives may be overdone.
“It’s so early in its development that it would be like investing in a company that’s only been around for a year. You don’t know if it’s going to take off or not, not too sure where the company is headed sure of how the business model might evolve…it’s highly speculative in my view,” the 26-year-old said.
It is feared that not all virtual worlds are successful in attracting a sufficient number of users.
“There could be thousands of metaverses like there are websites today. It’s just impossible to know what the endgame is,” he warned.
Risk and Volatility
The Financial Conduct Authority has called crypto-assets “very high-risk speculative investments” and warned that people trading them should be prepared to lose all their money.
There are also broader concerns about user safety in terms of online harm.
The new online security bill will account for activity in the metaverse, with companies required to take action if fraud is committed by their users, including those in virtual reality spaces.