If you’ve been following the development of ‘The Metaverse,’ you might have heard that it’s the next big thing. Prior to the market crash that sent everything everywhere plummeting back to reality, investors were funneling money hand over fist into new projects, and it seemed like ‘Play 2 Earn’ was the future. Digital land sales offering a ‘piece of the metaverse’ hit insane prices ranging from $10,000 to well over $450,000, just for a single plot of digital land!
So what is the Metaverse? Are these investors out of their damn minds? Or is the current bear market the perfect opportunity to get in on the next tech revolution?
To uncover the truth, we’ll take a deeper look into the basics of the metaverse, check out what current land sales have to offer, and outline exactly why you might just want to wait before mortgaging your REAL house for that plot of land in The Metaverse…
What the [email protected]#$ Is the Metaverse Anyways?
By most accounts, the term Metaverse first appeared in Neil Stephenson’s 1992 novel, Snow Crash. In the book, the term ‘metaverse’ is used to describe an evolutionary ‘2nd internet’ that forms a virtual reality shared world. Players enter this alternate reality to escape their actual reality, which has fallen on hard times. But while Snow Crash might be the first novel to use the term ‘metaverse,’ it isn’t the only example of the concept.
This idea of living out a second life in a fantastical digital world is actually the premise of another more well-known book called Ready Player One. In fact, the book was so popular that it was adapted into a movie by none other than the legendary Steven Spielberg. In both cases, the authors envision a world where players spend the majority of their waking hours ‘jacked-in’ to another world.
One of the most fascinating parts of these books is that people don’t just go to The Metaverse to play games. Instead, they log in to go to work, visit friends and family, and live out their daily lives. Their Metaverse life becomes their real life, and the tangible world is just a place where they go to eat and sleep so they can log back in. It’s an interesting view of a future that you may or may not find appealing, but I think I understand the intrigue.
See, in The Metaverse, it doesn’t matter whether you’re poor, rich, white, black, straight, gay, or anything else. When the world is virtual, and you can be anything (and I mean literally anything), it brings a newfound freedom to truly express one’s self image.
The Metaverse isn’t just the evolution of the internet, it’s the evolution of what it means to be an individual. It’s a place where humanity can escape the biases and judgement of the real world and feel free to finally be themselves.
Sounds pretty amazing, right?
Except, there’s one major problem. The current ‘Metaverse’ that’s being sold to you doesn’t quite live up to the hype. These new experiences aren’t that same digital utopia we’ve been describing. To be completely honest, these first generation ‘Metaverses’ have more in common with traditional Massively Multiplayer Online Games like World of Warcraft than they do with the virtual reality worlds described in Snow Crash or Ready Player One.
So then, what’s the deal? Is the Metaverse that’s being sold to us just a huge letdown, or even worse, a scam? Why would anyone be willing to pay $450,000 (or even more) for land in Minecraft they can already get for free?
The answer to that is a bit more complicated. While these ‘Metaverses’ won’t exactly impress the likes of Ernest Cline or Neil Stephenson, that doesn’t mean you shouldn’t get excited about them. There’s still some level of merit to these games as a stepping stone towards something greater. Before we can make a final verdict on whether or not you should buy digital land in the Metaverse, we need to dig deeper into what it means to be a digital landlord and examine what you’re actually getting when you buy that plot of virtual land.
What Does $10,000 Get You in the Metaverse?
When you’re talking about the Metaverse, it can come in a lot of different flavors. Whether it’s The Sandbox , NFT Worlds , The Otherside , or one of the hundreds of other games carrying the Metaverse label, the premise is basically the same. Developers use a blockchain to create and distribute various forms of non-fungible tokens (NFTs) that represent digital land and items in the Metaverse and authenticate ownership with cryptographic keys.
If that sounds confusing, you’re not alone. Let’s take a look at a practical example of what it all actually means.
As a player, you can buy a digital plot of land in a game universe like ‘The Sandbox.’ When you purchase land, you get a digital title, proving that you own that specific piece of the Metaverse. Your digital title allows you to build and customize your plot of land to create all kinds of unique experiences. The size, scope, and capabilities of what you can build vary depending on the game but can be anywhere from a small house all the way up to an entire world. In The Sandbox, you can build anything from mazes, to story-based role-playing games, to entire cities that feel alive. Once it’s built, other players can then visit your creation and join in on the experience.
Even better, ownership also allows you to determine who can access your creation. Want to charge admission like an amusement park? Go for it! Want it to be an exclusive club for high-rollers or celebrities? Yup, you can do that too! It’s up to you to decide how to manage your corner of the Metaverse, and that brings a lot of possibilities to the table. In fact, major brands and even celebrities have started to get in on the action. Names you probably know like Adidas, Snoop Dogg, The Walking Dead, and even The Smurfs all own land in The Sandbox.
It’s pretty cool stuff, but the idea of building custom experiences for other players isn’t new. Games like Fortnite, Minecraft, and countless others have allowed this kind of thing for over a decade, and, in many cases, have far better tools. Fortnite is notorious for making major deals with popular brands and has made a fortune off of their collaborations.
So why would anyone spend $450,000 for a plot of land in The Sandbox when they can build an entire world in Minecraft for free? Well, that’s where things get a little more complicated. For that, we need to talk about speculation.
Speculation in the Metaverse
What really draws most people in and gets them excited about the idea of owning a piece of the Metaverse is the sensational nature of the headlines.
BAYC Sells Virtual Plots for a Whopping $285 Million!
Virtual Land Within the Metaverse Sells for Record $2.43 Million!
Metaverse Real Estate Sales Top $500 Million, and are Projected to Double This Year!
These are REAL headlines covering actual sales of digital land. Metaverse real estate is selling for tens, if not hundreds of thousands of dollars. The problem is, in the majority of these cases, the games don’t even exist yet. The entire industry is built on rampant speculation. People think the Metaverse and these Metaverse games will be popular, so they’re paying exorbitant amounts of money to own a piece of the experience before they’ve even seen what that experience might look like.
‘Why is that dangerous?’ you might be asking yourself. Well, a lot of these products may never exist. If we’ve learned anything from Kickstarter, the ICO bubble, or NFTs, it’s that a lot of projects simply never deliver. Some, like NeoNexus, just quit before ever releasing anything . Worse yet, If you’re one of the unlucky investors in one of these projects, there’s not a whole lot you can do. If the project never comes to fruition, you still own the rights to that land, but the land you own becomes, for all intents and purposes, useless.
On the flip side, the project may actually deliver on their idea, but it might be awful. It’s not easy to make a triple-A game and most of these teams have absolutely no experience in the gaming industry. The odds of them being successful are extremely low, and only a few, if any, are going to make it to the finish line and actually be fun experiences that people want to play.
Which brings us to the crux of the matter.
Investing in digital land in the Metaverse is basically gambling.
As an investor, you’re betting on which games are going to win, on whether or not people will actually want to play it, and you are betting on the idea of the Metaverse as a whole. There is nothing to say that the Metaverse will even be a hit with players. Your entire investment is 100% based on speculation and your conviction that the Metaverse will be the next big thing. Is that a risk you’re willing to take?
Final Verdict
Knowing what we know now, let’s take another look at our initial question.
Is digital real estate in the Metaverse a scam?
I wish there was an easy yes or no answer here, but unfortunately, it’s not that simple. Land in the Metaverse isn’t an outright scam, but a lot of projects may never deliver a final product. Either way, it’s extremely difficult to determine the good ones from the bad. Could you get lucky and pick a winner? Sure, it’s possible, but the odds are definitely against you. If the prices for digital land were more reasonable, it might be worth a roll of the dice. But we know they aren’t reasonable. In fact, we think they are certifiably insane.
The best advice we can give you is to make sure you do your homework. Not every Metaverse is created equal, and most of them are drastically overpriced due to rampant speculation. We wouldn’t recommend you go out and spend $100,000 on an unknown project, but games like The Sandbox have a lot of promise in the next wave of gaming. In the end, I don’t think you can go wrong waiting on the sidelines to see how it all plays out. While these new blockchain-powered games are an interesting step towards a real Metaverse, it still feels like our virtual reality future is a world away.
One thing is certain; The future is coming, and it looks more promising than ever!
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