Private ownership of property and land is a cornerstone of modern civilisation; an aspirational goal throughout the world and popular vehicle for investing of commercial and personal finances.
But now, in the frontier lands of the metaverse and the growing popularity of digital asset ownership, more people are turning their attentions to digital real estate.
But, can I actually buy some land, or a house in the metaverse? And if I can, what do I actually get?
Which neighbourhood to choose?
When we talk about ‘land’ in the metaverse – what & where are we actually talking about.
Well, there are various places one can go to purchase some virtual land, with two of the biggest being Decentraland & Sandbox. The former describes itself as ‘the first fully decentralized virtual world.‘. In essence, users can buy virtual plots of land (called ‘parcels’), which they can then use to build, showcase and potentially monetize with the metaverse experience as they wish.
This land could be bought through an auction, or directly from a land-owner via a marketplace.
There are other platforms, Cryptovoxels and Somnium. It’s important to understand these platforms are not linked with each other – it is not one single metaverse world. Perhaps the best analogy would be to think of the metaverse as the world, and these different platforms as countries. Except in this alternate universe, there’s currently no way to move or interact from one country to another.
So, how much are we talking?
In a totally un-scientific test, I took a look at the lowest priced parcel for sale on the Decentraland marketplace today.
This piece of land is situated at ‘139, -8’ and is owned by seemingly anonymous user ‘0xf16a’. I can see that ‘0xf16a’ currently owns 90 bits of digital land, with 2 on sale.
The parcel is listed for sale for ‘4,075’. At first, I thought this was in the cryptocurrency ‘Ether’, which was slightly alarming, given this would equate to a valuation of over $8.3m (perhaps a tad steep). After more investigation however, I learned that the price was listed in MANA, Decentraland’s own coin. Purchasing the land would require me to convert some Ether into MANA.
Following my previous misunderstanding on price, I re-ran the numbers. At today’s exchange rates, the parcel would cost me approximately $4,800.
So I’m a proud land owner – now what?
I’ll be honest – I sadly didn’t have a few thousand dollars to hand to splash out on some digital land. I was intrigued however, to learn more about what I could do with my hypothetical new land.
In the Decentraland ‘LAND manager’, I can
- Name my parcels and give them a public description.
- Merge multiple LAND parcels into an Estate.
- Dissolve an Estate into separate LAND parcels.
- Transfer my parcels and Estates to another user.
- Grant permissions to other users to edit the parcels you own.
Ok – all pretty logical fare, but I’ve still just got a patch of digital grass with its digital weeds.
Apparently my new parcel would be 16 x 16 virtual metres, and I can use these metres to build my own ‘scene’.
‘Scenes are displayed one next to the other and players can freely walk from one to the other. Each scene is its own contained little world, items from one scene can’t extend out into another scene, and the code for each scene is sandboxed from all others.’Decentraland
So, a scene is effectively code and assets, allowing users to showcase their digital plot. You can even hold community events, to attract more people to come and hang out. Here’s an example of a basic scene from the Decentraland website, called ‘Hummingbird’
Digital real estate: boom or bust?
It’s been an enlightening foray into the world of virtual land ownership. In many ways, it doesn’t feel hugely different to the likes of Second Life. Indeed, my short stint walking through Decentraland didn’t feel totally dissimilar to my countless youthful hours spent playing RuneScape.
However, it’s clear the innovation here is not necessarily the graphical nature of the digital world, but the nature of defacto ‘ownership’ of a digital plot via an NFT. This, really, is the potential game changer, even if the current use cases may be quite weak.
Think, for example, about the potential of linking digital real estate with the physical world. A company could today buy a prominent storefront on London’s Regent Street, but in the future could also bid to flog their wares in a virtual Regent Street. They could look identical, offer access to the same products and be run by the same staff.
A digital Regent Street however, could be accessed from anywhere across the world – there would be no need to jump on a plane, train or automobile, to make the journey to shop in such an exclusive location.
It’s this kind of future use case, for example, that for demonstrates the potential secret-sauce of digital real estate.