Facebook is one of the brands that have gigantic brand recognition much like Coco-Cola and Google. Facebook Inc. has recently rebranded all its subsidiaries such as WhatsApp, Instagram, and Messenger, and Facebook as Meta.
The underdevelopment project thus laid the foundation of the Metaverse. This article is about virtual real estate in Metaverse and how it affects the blockchain sector.
What is the Metaverse?
Metaverse is a virtual reality space that works like an immersive experience. Users can log in to a Metaverse space much like social media but it is 3 dimensional and can connect through multiple platforms. A typical social media account lets users create an account where they can manage their walls or timelines at their discretion.
In the same manner, users can also join the Metaverse but they can create a virtual reality space with life-like features and appearance that they can enhance using the built-in technology. At the same time, users can interact with each other in emulated reality communities.
Users can assume avatars and other features specific to this zone. Metaverse is also used for gaming, workplace correspondence, and other purposes such as advertising, etc.
What is Metaverse Real Estate?
As mentioned above, Metaverse is an attempt to replicate the real world within a virtual space that allows users to incorporate innovations. The users can enhance, edit, and design their virtual reality personalities and spaces within the Metaverse using countless options and themes. Such features increase the importance of skins and themes within the Metaverse.
Another valuable commodity within the Metaverse is virtual real estate. Users in the Metaverse do not visit different web pages by clicking on their computer or mobile screens.
Rather, Metaverse natives can visit various places within the network using their online 3D avatars. Therefore, the importance of different virtual real estate or places within Metaverse depends on the total number of visitors.
Therefore, Metaverse has started the trend of selling and purchasing virtual real estate that is done using NFTs or Non-Fungible Tokens. NFTs allow users to denote the legal ownership of virtual real estate and work as a record for all its previous sales and owners.
NFTs also allow the original creator of a virtual real estate to continue to earn a fraction of the sales amount with every new purchase.
Role of Crypto and Blockchains in the Metaverse and Virtual Real Estate
The concept of the Metaverse was conceived by Neal Stephenson in 1992 in his popular novel named Snow Crash. However, the real Metaverse emerged only after the invention of blockchain technology.
Blockchain and cryptocurrencies are directly linked to Metaverse. Metaverse uses NFTs for conducting sales and purchases of real estate within its ecosystem. NFTs are a by-product of blockchain.
Additionally, Metaverse also intends to build on the concept of Web3. Web 3.0 is a novel concept for the evolution of the internet in its existing form. Web 3 grants Metaverse its 3D and virtual reality shape and form.
Another important crypto plug-in for Metaverse and virtual real estate is GameFi. Many decentralized gaming platforms are connected to the Meteverse. It means that Metaverse users can easily access, trade, and play these games from their Metaverse accounts or IDs.
These gaming experiences allow users to sell and purchase gaming assets with each other using blockchains and cryptocurrencies. Gamers in the space can create or design a new land or level and sell it on the Metaverse gaming community or connected crypto trading forums.
GameFi has also introduced the option of play-to-earn models. It means that gamers can earn cryptocurrency rewards by playing the game and completing new levels and tasks. Cryptocurrencies are used for governance and transfer of value plus ownership for virtual assets within the Metaverse such as land.
Risks Associated with the Metaverse Real Estate
Here are some important risks that are associated with the Metaverse virtual estate:
Metaverse is still in the early stages of development therefore purchasing virtual real estate can be costly with a chance of conservative future returns.
Metaverse is projected to have the potential for tremendous growth. However, many companies are developing within the Metaverse if one of these start-ups goes under virtual real estate owners may suffer losses.
Traditional real estate is affected by market conditions, economic factors, and other matters. However, virtual real estate can absorb pressure from cryptocurrency price volatility.
Metaverse has incorporated the latest technologies such as AI, Web3, and blockchain. Metaverse is likely going to become one of the biggest tech projects in the next decade.
However, much like the traditional internet, this industry is still under development that is simultaneously working with other nascent technologies. Considering these factors investors should always beware of the risks associated with virtual real estate.