The advent of digital assets brought about a change in all sectors, including land property. Report shows that virtual property acquisition is surging, and trending and investors are putting millions into virtual land to acquire a plot in a city that exists only in the virtual world.
Metaverse Group, a subsidiary of Tokens.com, purchased a virtual plot of land for $2.4 million worth of cryptocurrency. The virtual land is in Decentraland, a metaverse, making it the most significant purchase to date.
Davood Shojaei, Lecturer at the University of Melbourne, says virtual land and properties are digitally mapped, and ownership of the virtual land can only be claimed through cryptocurrency purchases. He says, “These virtual land parcels would no longer be dictated by geographical distance with connection to the internet (and a form of digital currency) being the only resource needed to purchase land on another continent”.
He further said, “These digital spaces do not even need to exist in real life. They can be created or ‘minted’ in a completely virtual environment. These virtual land parcels are considered NFTs that can be uniquely owned and interacted with by individuals worldwide”.
According to him, with the increased efficiency and security of blockchain technology, it’s easy to see how this notion could benefit businesses looking to enter the virtual market. Therefore, “Once virtual worlds have been established, they can also be used to trade virtual services and products without the physical requirements of most services”.
A buyer, who goes by the name Flying Falcon online, says, “The transition and blend from real life to digital events have increasingly accelerated, leading to the formation of digitally native nations. I believe having ownership in such nations has an addressable market that is far greater than the real world”.
Ownership rights and protection
According to Shojaei, ownership rights are presently monitored and registered in a centralised approach by the government. In light of this, there is the need to consider these technologies and modernise current processes to minimise costs and boost efficiencies in cadastral systems and facilitate land transactions and ensure land and property ownerships.
The development of 3D cadastres is also significant in the extension of the virtual world since they will provide virtual worlds with more functionality. It will also assist in managing virtual land ownership in the same manner that they help manage real-world land.
Why do investors invest in it?
There has been a surge in investment in virtual land as hundreds of thousands of dollars has been used to acquire land in the metaverse. The acquisition is futuristic. In the sixth month of 2021, a plot of land in Decentraland sold for more than USD 900,000. The return on investment (ROI) on virtual land looks promising for investors. This is seen from the growing interest in it.
Also, virtual lands can be used to generate income. For instance, an owner can host an event on the property with attendance by invitation and a fee. This is also seen in the case of Snoop Dogg, an American rapper, who held a private party on The Sandbox’s non-fungible token (NFT) platform to rebuild his real-life mansion. Attendees used an NFT to get admission to the event, which served as a pass. According to Bill Gates, meetings will be held in the Metaverse in years to come.
Investors can also generate profit from their virtual lands on a regular basis. NFTs can construct a virtual house on virtual land and rent it out for a monthly income. Alternatively, set up an NFT art gallery and rent out the space to aspiring crypto artists who want to show off their work in the metaverse.
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