Real Estate in the Metaverse: The Future, or a Waste of Money?

 Real Estate in the Metaverse: The Future, or a Waste of Money?

Jackson Wilkey

The metaverse is something that is very complicated and difficult to define. In a nutshell, the metaverse is a platform made up of many different technologies with many different purposes. The platform I will be focusing on is the virtual reality aspect, and how real estate works within these virtual worlds. These worlds can be accessed through just a computer, but companies like Meta (formerly known as Facebook), who are leading the back with metaverse development, have a vision of accessing the metaverse through virtual reality headsets in the future. 

In the metaverse, you can purchase land with real USD, that is then yours to own. Similar to NFTs, land purchased in the metaverse is protected by the blockchain, so it is very very difficult to fake. Many investors are claiming that the metaverse is the future of technology, and are heavily advising people to invest. Andrew Kiguel is the CEO of Token.com, a company that is heavily invested in crypto, NFTs, and the metaverse. “Kiguel’s company recently dropped nearly $2.5 million on a patch of land in Decentraland — one of several popular metaverse worlds” (Chris Dilella). While this may seem like a waste of money, according to Kiguel, “[Digital real estate] prices have gone up 400% to 500% in the last few months” (Kiguel). This is an extremely high return, and makes the metaverse look like the best new thing to throw your money at. 

But of course, there are many downsides to this market. One of the biggest ones is that there is a very small market. Because many people are skeptical of losing their money in the metaverse, there are not a lot of people going in on this. As with any crypto based markets, the metaverse is extremely volatile. Many investors, while they boast their astonishing returns, also advise caution when investing. Janine Yorio, the owner of a virtual real estate investment company, says, “It’s highly, highly risky. You should only invest capital that you’re prepared to lose” (Yorio). When thinking about it, it makes a lot of sense that it’s such a volatile market. Buying something that isn’t actually real surely can’t be the safest investment. 

Real estate in the metaverse is a very new, and very risky market to invest in. While some have seen incredible returns on their investments, others are also advising to be very wary of how you put your money into the metaverse. While spending $450,000 to be Snoop Dogg's virtual neighbor might cash out well in the end, it might also be a good way to go bankrupt. 

Works Cited

Bruner, Raisa. “Metaverse Real Estate: Why Investors Are Buying Virtual Land.” Time, Time, 20 Jan. 2022, https://time.com/6140467/metaverse-real-estate/.

Cdilella. “Investors Are Paying Millions for Virtual Land in the Metaverse.” CNBC, CNBC, 13 Jan. 2022, https://www.cnbc.com/2022/01/12/investors-are-paying-millions-for-virtual-land-in-the-metaverse.html.

DeMatteo, Megan. “Location, Location, Location: Investing in Real Estate in the Metaverse.” CoinDesk Latest Headlines RSS, CoinDesk, 23 Mar. 2022, https://www.coindesk.com/learn/location-location-location-investing-in-real-estate-in-the-metaverse/.

Ravenscraft, Eric. “What Is the Metaverse, Exactly?” Wired, Conde Nast, 25 Nov. 2021, https://www.wired.com/story/what-is-the-metaverse/.