Meta’s (formerly Facebook) announcement of the metaverse and the benefits it promises is driving significant investment from individuals and large corporations into virtual worlds. Thousands of users have registered on different metaverse platforms offering an introduction to the metaverse, and figures like Snoop Dogg, Ubisoft, and Nike have already established a presence in the digital environment. These digital spaces aim to facilitate social interaction, communication, and engagement among users through personalized avatars. They also enable the exploration of diverse areas, the creation of various content, and the purchase of real estate assets. Similar to the physical world, individuals and companies can acquire and sell assets, a trend increasingly visible in media coverage. Currently, several virtual worlds refer to themselves as ‘metaverses’, with two particularly prominent examples: Decentraland and The SandboxBoth platforms are entirely decentralized, meaning control rests with the community rather than a centralized corporation. They are built on the Ethereum blockchain, which enables private data transmission without intermediaries. Decentraland is a portal where users participate in building and customizing a three-dimensional world to establish a community. Virtual land ownership is based on NFTs (Non-Fungible Tokens), which are unique and immutable assets that can be purchased using the cryptocurrency MANA. The Sandbox, on the other hand, is a ‘play-to-earn’ platform that also relies on collaboration in a 3D world using NFTs. Users can create and personalize avatars, assets, or games using free design tools. Its native token, SAND, is used as the basis for all transactions and interactions within the game.

Why and How to Purchase Land in the Virtual World?

Businesses and individuals are purchasing virtual land for various reasons, primarily to generate financial profits. Similar to real-world property, the value of each parcel depends on its location: parcels in high-traffic areas command higher prices than those in less frequented zones. Consequently, investors seek properties that attract attention and generate increased revenue. Another motivation for investment in these lands is speculation, involving the purchase with the intention of reselling them at a higher price after a period. Rather than monetizing the land through events, advertising installations, or leasing it to other users, some investors speculate on the value of the parcel to sell it at a significantly higher cost than its initial value. Typically, the acquisition of virtual land occurs through transactions using NFTs or cryptocurrencies, such as Ethereum, SAND (the currency of The Sandbox), and MANA (the currency of Decentraland), among others. These transactions can be executed directly through the respective platforms, requiring an account on the chosen virtual world, an NFT or cryptocurrency from that world, and a digital wallet for storing the currency and recording property ownership.

Risks 

Most investors speculating on the future of these platforms believe that a significant portion of the population will migrate to the metaverse in the future, viewing property purchases as a long-term business opportunity. While the current supply of parcels is limited, driving up their value and expected to increase as investment interest grows, it's important to note that the virtual nature of these lands allows for expansion in quantity if demand dictates. An increased supply would naturally lead to a decrease in value. The high prices currently associated with some of these digital lands may resemble the 2008 housing bubble, but with assets existing solely within the network. Experts and authorities caution that this renewed interest in investments can inflate the value of intangible assets, or at least to this extent, potentially leading to a new financial crisis. It’s crucial to remember that investing in cryptocurrencies, NFTs, or virtual land is a high-risk investment due to their inherent volatility. This volatility is precisely what allows property values to increase or decrease dramatically in a short period. Furthermore, another risk is the tendency of inexperienced or young individuals, seeking ‘quick wins,’ to invest without sufficient knowledge. There are numerous examples of people losing their savings attempting to achieve rapid profits, sometimes resulting in complete financial loss. The allure of ‘easy money’ has also fueled an increase in scams. Conclusions

Conclusions 

The emergence of new virtual worlds foreshadowing the arrival of the Metaverse presents numerous opportunities for users. Blockchain-based technologies enable access to new wealth streams for users globally, who can now exchange goods without relying on centralized entities. However, with great power comes great responsibility, and users will progressively need to acquire the necessary knowledge to fully leverage the potential of this sector.