Why are people pouring millions of dollars to buy virtual land in the metaverse?
Points covered:
- What is metaverse?
- Why are people buying virtual land in the metaverse?
- What is the utility of metaverse?
What is metaverse?
Metaverse is a digital world where real people create their digital avatar to represent themselves in that digital world. Zoom or google meet is a form of metaverse because in that you are present in the room but with a static image, or a live video, you interact live with people in that room. Now, imagine I give you AR/VR glasses and tell you to create a digital version of yourself for a meeting you will be having in your company. Don’t you think it will create a dopamine rush within you? I believe yes. Apart from meeting there is another bunch of cool stuff that people can do in the metaverse i.e., going to a concert with a bunch of friends, virtual trips around the world, and whatnot. Now people would say these all things can be done anyways in the real world. So, what’s new here? you can do anything like going to a concert or travel the world just by sitting in your bedroom and having a real-type experience with the help of an AR/VR device and the best part is it will cost you much less to buy a concert ticket or traveling expense around the world in comparison with real world’s actual expenses for the experience.
For The Big Bang theory fans: There is a scene in season 2 episode 3 where Penny and Howard play the age of canon game in the virtual world, the way it is shown with the scene-setting and voiceover in that scene can be described as playing games in a metaverse.
Why are people buying virtual land in the metaverse?
- Digital real estate is a new asset class. It has been appreciated recently within the community who believe that it carries a great value like any other real-world asset class. So, people want to take early mover advantage just to earn a higher return when it gets more and more popular.
- There are use cases of real estate in the metaverse, let’s say you bought a property in the metaverse and built a club on the same. Now, the people or community which beliefs in the metaverse ecosystem would like to hang out or party with their bunch of friends in that club. Since you are the owner of the club, you can charge them for passes or entry fees to the club turns out it could be a source of revenue for you besides another real-world capitalist activity you do.
- It is way easier to buy and sell land in a virtual world than to buy or sell land in the actual world. The real world’s paperwork, complex taxation system are some problems that can add friction to the transaction. If a large community believes in the metaverse and there is demand for the virtual land then for other people to switch to the virtual world will happen in no time because switching cost is very low.
- The concept of the metaverse, AR/VR, and cryptocurrency is new to the world and the way the price of crypto has shot up in such a short period has created a FOMO among the individuals out there. People are risking their life-saving in the crypto ecosystem just to earn high returns in the shortest time possible and to satisfy their egos.
What is the utility of metaverse?
In the book, The infinite machine by Camila Russo. An early time when the term bitcoin was heard by very few people, at that moment Vitalik Buterin had written in the Bitcoin talks that “government is bad because it’s a monopoly more than any other reason. You think of the world as a free market where all the land is legitimately owned by 193 landowners that allow you to live on the land under certain conditions.” The decentralized world will give people a sense of freedom because no single large corporation would own everything rather it will be collectively owned by the people of the community.
