The other day, social networks spread the news: the Gucci fashion house has acquired a digital piece of land in one of the metaverses. For those who do not understand, we repeat: a well-known brand bought virtual land to open a virtual clothing store on it. The cost of the transaction was not disclosed, but it is possible that we are talking about hundreds of thousands of dollars. How is it that in 2022 a plot in Cyprus or Mallorca looks less attractive than a plot in one of the popular metaverses? And when will earthlings begin to visit virtual worlds more often than real Mediterranean islands? Together with our experts — the founder of the Aversa Group architectural company, architect, crypto-investor and entrepreneur Anton Garustovich, and the executive director of the SoftClub Development Center company Vitaly Nikulenko — we will try to figure out what digital lands are, why they are bought, and whether it is possible to make money out of them.

«Whoever buys digital land in a cool place first will win»

First, some more news for those who still think that the metaverses are some kind of toys for children. A couple of months ago, a virtual piece of land in the Decentraland metaverse was purchased for $2.5 million, the largest deal in NFT history. By the end of 2022, the real estate market in the metaverses, according to analysts from MetaMetric Solutions, could reach $1 billion. So, do you still think digital real estate is silly?

In general, digital land is a phenomenon from the same field as blockchain, bitcoin and NFT. To clarify, the three capital letters NFT stand for non-fungible token. That is, this is such a unique digital certificate that is stored in the blockchain and is proof of ownership of a virtual asset, whether it is an art piece or a plot of land. 

— Real estate is something inseparable from the land, some kind of product tied to space. Accordingly, if we have a virtual space, then virtual real estate may also appear in it. It turns out that if we cut sections in this space, then theoretically we will be able to implement them. For example, if your digital site is located in the center of a digital city, then later on you can put up a billboard there, open a store, hold a conference, and so on. The more traffic, the more opportunities. Everything is like in the real world. Whoever buys land in a cool place first wins, — explains Anton Garustovich.

«Planet earth is over. Let’s go to the Metaverses»

Metaverses, in turn, are virtual worlds that are the future of the entire Internet space. In virtual worlds filled with a huge number of virtual things and items, you can be anyone and do whatever you want. Virtual concerts and football matches, cinemas and museums, shops and casinos, sea cruises and flights between worlds — all this is already real in the metaverses. At the same time, of course, all virtual things and items, as in the real world, have a price. If you want to dress your avatar in new designer clothes — pay; if you want to visit a fashion show — lay out some money; if you decide to invite a virtual girlfriend to a virtual hotel — get your wallet our. At the same time, real money is not yet used in the metaverses, its replacement in the form of cryptocurrency is used. In any case, there is an exchange rate for real money and now large companies are actively working on the possibility of paying with real money.

All payments here are mainly made for cryptocurrencies, and proof of ownership is verified using blockchain technology.

— The issue of the metaverses became especially relevant during the pandemic. People began to spend even more time at the screen of a tablet, smartphone and laptop. As a result, a variety of virtual entertainment has become even more in demand. When you can’t go out in real life, you can upgrade your avatar, buy yourself the coolest skin, and gain credibility in VR. So, if you have ever played Farm Frenzy on your phone, then you probably remember how you planted wheat for hours, expanded your plot, purchased tools, competed with neighbors and, most importantly, spent real time and money on it. Metaverses are about the same thing, only on a much larger scale, — explains the architect.

At the moment, there are hundreds of various virtual universes on the Internet with their own infrastructure and economy. The most famous of them are Decentraland (a virtual world where you can buy land plots with the MANA cryptocurrency and build your real estate on them), Sandbox (a three-dimensional metaverse with quests, games and tests based on Ethereum, allowing users to buy land plots) and Cryptovoxels (a large metaverse from developers from New Zealand). Some universes can be visited by everyone, access to others will require cryptocurrency that operates in this network. 

— Definitely, metaverses are a serious thing, — says Vitaly Nikulenko, a representative of the IT sector. — Even Facebook itself in the near future is going to hire about 10 thousand employees who will develop its metaverse. It is still difficult to say what it will result in, but capital has already flown towards it. In virtual universes, people are already buying land, apartments, and houses. 

Vitaly Nikulenko, by the way, believes that the development of metaverses is due to the fact that there are fewer and fewer real assets on planet earth:

— We have reached a level where there is nowhere to develop further. Planet earth is over. It has no new lands, unexplored deposits, etc. At the same time, there is a lot of money left on the market that needs to be spent somewhere. Metaverses, from the point of view of the economy, can become the place where the excess money supply can merge.

«Anyone can enter the metaverse, open a crypto wallet and buy whatever they need»

Looking out the window and seeing real high-rise buildings (with a meter costing $1,000 and above), many will ask a logical question: is someone actually going to spend real money on something that does not exist, and will never exist in reality? On some incomprehensible worlds that exist only in the virtual space?

They will, indeed. Remember how bitcoin started. From a cost equivalent to a cheap pizza, this cryptocurrency has grown to tens of thousands of dollars in a few years. And today, those who used to twist their fingers at their temples are dying of regret. The boom of cryptocurrencies has led to the fact that thousands of people are now actively investing in other digital assets, for example, in NFT-art pieces.

— Indeed, the virtual world has developed a lot in recent years. Where do people spend their free time? in virtual reality. Where do people spend money? Same place. Why leave the house and go somewhere to a concert when you can visit it in the virtual space. Why go to a regular store if you can go to a store in the metaverse and buy everything you need for cryptocurrency there?, — says Anton Garustovich.

Many of the investors are also betting on virtual real estate. Taking into account the development trends of this market, after a while it will be possible to open a shop, a gallery, a conference hall in the purchased property. Or rent it to a well-known brand for advertising. In general, everything is like in the real world.

The founder of the Aversa Group company notes that the active age group now includes people for whom a mouse and a computer are a familiar way to communicate with the world:

— This is a huge layer of people who do not know how to do things otherwise. Now, you can already go into any metaverse in 15 minutes with the help of a YouTube video, figure out how everything works there, open your crypto wallet and buy what you need. Including a plot of land. To do this in the metaverse, you need to perform all the same actions as in the ordinary world. First — viewing, later — analyzing your options, then — the actual purchase. The only difference is that all this can be done in a few minutes. Well, and that you won’t have to pay a any maintenance fees.

Where to run to buy a digital one-room?

Today, real estate, albeit virtual, is sold in dozens of metaverses. Let’s take a look at the most famous ones. For example, in the Sandbox metaverse, 100 digital islands with villas were recently put up for sale. The cost of «a plot of land» in the virtual ocean was $15,000. Buyers for them were found on the first day. Today, new owners are selling their islands for $100,000.

And in the Ethereum Worlds metaverse, sales of apartments in the 101-story Ethereum Towers complex are now actively going on. The two futuristic towers house 4388 apartments and many public areas. There are about 20 apartments on each floor: standards, suites and penthouses. Owners of digital meters will be able to furnish their digital home with digital items and rent it out for workshops, exhibitions of NFT works, or just private meetings. The cost of standard apartments in towers starts from 0.78-0.79 Ethereum (1 Ethereum is currently equal to $3132).

— Digital real estate is an interesting innovative tool where you can try to invest. At the same time, one must understand that these are high-risk investments — that is, it is definitely not worth investing your bottom dollar on that. Yes, such an investment can bring good returns, but the risks are also high. A city bought in an unknown metaverse may become the new New York, or it may simply disappear. The prospects and risks here are about the same. So far we have a wild market. You can win a lot on it, but you can also lose a lot, — says Vitaly Nikulenko.

The executive director of SoftClub Development Center believes that the digital future, when our whole life will take place in virtual worlds, will come, if not tomorrow, then definitely the day after tomorrow. In any case, real estate agencies working with digital real estate are already appearing. In a year or two there will be dozens of them.
 

«It is possible that a plot of land in the virtual world will bring more income than the real one»

Anton Garustovich says that the growth of the digital real estate market does not necessarily mean that its participants will become less mobile and sit in capsules, like in films about the future. The opposite situation is very possible. Those who have successfully invested at the start will profitably rent out their digital meters and spend their money on traveling in the ordinary world. It is possible that a plot of land in the virtual world will bring more income than a real one.

— Let’s be honest, we’re talking about people who make good money. These are people who will easily spend a dollar or two on virtual entertainment. That is, the target audience is very loyal and prepared for such things. For them, buying a digital plot or a digital apartment for fun is in the order of things. A virtual property in the metaverse does not yet require passive consumption — there are no communications, engineers, service companies, floods, fires and earthquakes, of course, if the server does not introduce it, no rent, — Anton explains.

At the same time, you can literally destroy the metaverses, and with it those digital sites worth millions of dollars, with just one click. A regulator that owns Internet servers, or some powerful magnetic storm, can compromise these virtual worlds.

What conclusion can be drawn from the above? The main takeaway is that fun times are ahead of us. Yes, perhaps not each of us is ready to spend most of our lives in the digital space, but one thing is for sure — for our children, the metaverses will become an everyday reality. And if so, then why not buy yourself a plot in one of the virtual worlds right now?