The metaverse offers investors the potential to stake a claim in an evolving virtual universe. In this land rush, like others, some are panning for gold while other speculators want to sell shovels.
- Real estate in the metaverse, where $20 parcels now sell for $6,000, has drawn a lot of speculators.
- One company has created a ‘Fashion District’ from those parcels, where Gucci and Prada sell goods.
- Investing in the metaverse can be confusing; this guide can give you some confidence and clarity.
Over the next several years, the metaverse is going to become more and more commonplace in daily life. Companies, entrepreneurs and everyone in between is going to look at how to take advantage of the next big wave in tech where, instead of spending time in a browser or on a domain, users will be fully immersed in a virtual world.
As the spaces develop, cryptocurrency will help fuel the new-age exploration. Whether it’s through buying up digital land or purchasing something as simple as an avatar skin, crypto will undoubtedly be a prime form of exchanging goods and services in the metaverse.
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What is the metaverse?
Right now, the “metaverse” can be a lot of different things to a lot of different people.
Essentially, it’s a combination of multiple elements of technology, including virtual reality, augmented reality and video where users “live” within a digital universe. Supporters of the metaverse envision its users working, playing and staying connected with friends through everything from concerts and conferences to virtual trips around to the world.
The term was coined by author Neal Stephenson in his 1992 sci-fi novel “Snow Crash,” where he envisioned lifelike avatars who meet in realistic 3D buildings and other such virtual reality environments.
There are already several key players in the metaverse, including Meta (formerly Facebook), Microsoft, Apple, Epic Games, and Roblox, as well as previously established, lower-profile companies such as Second Life.
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Do I need a VR headset for the metaverse?
Not right now, but it will likely move toward being exclusively VR in the future.
Platforms like Fortnite or Minecraft have their own universes that are accessible through a PC or a gaming console.
The Sensorium Galaxy earlier this year opened the first two of its planned galaxy of various connected online “worlds” to explore with VR headsets or desktop computers.
Prism, the first to open, involves music – virtual DJs and bands play, for instance – in futuristic landscapes.
How does crypto fit in the metaverse?
For starters, buying virtual real estate is very much a thing and will continue to be. NFTs (non-fungible tokens) are also fueling the boom. (More on this below.)
Take the virtual world of Decentraland, for instance. NBC News reported its daily users grew from about 1,500 to nearly 10,000 during the first four months of the year.
Decentraland allows its users to own digital plots of pixelated land, and property values have skyrocketed amid the NFT craze. Underdeveloped land parcels — measuring 16 meters by 16 meters, or 2755.56 square feet — used to sell for about $20 in the past. Now they price for upwards of of $6,000.
Investors are gobbling up tracts of digital land with the intention to make it into an established space and turn a massive profit.
According to The Daily Hodl, virtual reality real estate company Metaverse Group plunked down serious cash to start developing in Decentraland. They have created The Fashion District, where users can shop for virtual clothes from real brands like Ralph Lauren, Gucci or Prada.
“We think the Fashion District purchase is like buying on Fifth Avenue back in the 1800s … or the creation of Rodeo Drive…” Metaverse Group CEO Lorne Sugarman said in a report to Market Insider.
As for how those transactions will work? That’s where NFTs come in.
What about NFTs in the metaverse?
Just like someone in 1995 trying to predict the direction the internet would go, it’s the same for the metaverse now. However, all signs are pointing to NFTs being commonplace in the next version of the internet.
In short, a non-fungible token is a piece of data that verifies you maintain ownership of a digital item. Currently, that could be a GIF, a tweet, an image, or a game-winning shot in an NBA game. The craze is booming among collectors, with some spending thousands, or even millions, of dollars for them.
This will likely be huge in the video game industry, where players will be able to exchange money or crypto for unique skins, items, avatars or more. Theoretically, since each product is one-of-a-kind, players could swap or sell these themselves.
In a more real-world sense, NFTs could also be used to signify an owner of a plot of land, a house, a car and so on. Both in the metaverse and in real life.
Of course, there are also avenues for those in creative sectors to cash in. Whether it’s an art gallery in The Fashion District where artists can sell their work as NFTs, or musicians offering tickets, meet and greets, unique songs or albums as NFTs as well.
Right now, the possibilities really are endless, limited only by the imagination and ingenuity of those exploring the space.
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Mike Snider and Brett Molina contributed to this report.