Johnny McCamley spent nearly £ 5,000 on a parcel of land.
But he can’t physically walk on this land-and he can’t live there or build a house there.
This is because the 23-year-old investment is in the Metaverse. That is, his land is completely virtualized and exists only within the digital world.
From Belfast, McCamley is one of many who have decided to buy virtual real estate in the Metaverse.
Last year, virtual land transactions reached $ 350 million (£ 267 million) on The Sandbox, the largest platform for digital assets, according to a report from the Center for Finance, Technology and Entrepreneurship.
Decentraland, the second largest metaverse platform, has traded an additional $ 110 million (£ 84.2 million).
What is the Metaverse?
The Metaverse is not a single digital space. It’s a virtual reality network set up by businesses and platforms where users can interact, play games, attend events, and buy land.
One of the well-known metaverses is Horizon Worlds. Created by Facebook, it was renamed Meta as the tech giant shifted its focus to virtual space.
Other brands are also announcing their own digital domain.
Manchester City plans to partner with Sony to build the first Metaverse Soccer Stadium.
McCamley, CEO of CryptoClear, purchased his plot on The Sandbox last October. He states: “The Metaverse has a casino, a museum, but also events such as podcasts and meetings I actually attended. So the best way to see it is to capture the real world. Like Zoom. It’s actually digitizing far beyond what it is. “
Why do people buy virtual real estate?
For McCamley, the opportunity to make a claim in this fictional world was a must-see opportunity, despite market uncertainty and price volatility being risky investments.
“It’s like a new investment or a new asset class. When I entered Bitcoin at $ 300, I was told it was very dangerous, just like the $ 4 Ether. At $ 4,000. I think it’s an absolute bargain to acquire Decentraland land. “
He intends to continue the purchase for 10 years. “I believe Metaverse will mature in about 10 years, and when that time comes he will consider selling the land.”
Landlords can also use virtual spaces to design experiences that others can enjoy.
“Community-owned land is my favorite. I think a really good example is someone’s” Gecko Beach. ” As you can imagine, it’s a beach full of geckos. “Mr. McCamley said.
House hunting in a virtual world
Finding the perfect home in the Metaverse is like real life.
Land next to the road and near desirable areas such as the “fashion” and “museum” areas carry higher price tags and provide a more attractive investment opportunity.
In the sandbox, the busy center near other landmarks is much more expensive than the new areas in the suburbs.
Who your neighbor is also affects the value of your property.
In September 2021, rapper Snoop Dogg unveiled his own digital “Snoop Dogg” in the sandbox.
Two months later, the property next to his parcel sold for over $ 450,000 (£ 350,000).
However, unlike traditional real estate purchases, there is no third party or legal entity that can guarantee that the transaction is legal.
This can be risky when making purchases from secondary markets such as OpenSea, where purchases are made using cryptocurrencies.
Why are people building virtual assets?
Not only landowners, but also a new generation of “metaarchitects” who design virtual spaces.
Stavros Zachariades, a traditional architect working in southern London, overcame the pandemic and began designing for the digital world after his brother Adonis founded the NFT marketplace Renovi.
A 37-year-old recently designed Metaverse Fashion Week pop-up shop.
“The draw to the Metaverse and the construction of the Metaverse [people and businesses] I can show you what they are doing. “
“They can show their products. We can provide meeting space for different people, especially now that we have COVID, and people for the last two years are farther away.
“From the realm of super science fiction to floating buildings that rotate and transform, to the other side of the realm, you can have a historic and classic architectural style.”
He believes that the Metaverse can open the door to those who lack connectivity in real life. “”
“It’s impossible to know what the end is.”
However, many warn that these investments can fail.
From Birmingham, YouTuber “Mitch Investing” regularly researches topics such as personal finance and emerging technologies on his channel.
He believes that the promise that the Metaverse will be part of our daily lives may be exaggerated.
“In the early stages of development, it’s like investing in a company that’s only been in operation for a year. I don’t know if the business is on track. I don’t know where the business is heading. The business model is See how it evolves … it’s very speculative in my view, “said the 26-year-old.
There is concern that not all virtual worlds will succeed in attracting a sufficient number of users.
“There can be thousands of metaverses like today’s websites. It’s impossible to know what the end is,” he warned.
Risk and volatility
The Financial Conduct Authority has labeled crypto assets as “very risky and speculative investments” and warned that those who trade them need to be prepared to lose all their money.
There are also widespread concerns about user safety in terms of online harm.
The newly introduced online safety bill takes into account activities in the Metaverse, and companies need to take action if users, including users in virtual reality space, commit fraud.