There will come a day when the virtual world we inhabit will begin to seem like the real one we know and love. To take advantage of the tremendous progress in virtual reality and 5G connections, we will be able to do things like visit shopping malls and travel across town to meet up with pals.
In multiplayer online games, metaverses have been around for decades. Gaming and non-gaming may soon enter a new era of immersive experiences that are almost indistinguishable from the real world.
Prototype next-generation metaverses like Decentraland and Somnium Space have already begun to demonstrate what it might look like to have a functioning civilization in the virtual world. A well-functioning economy is a need in every civilization, real or virtual. Digital property such as a person’s metaverse house, vehicle, farm, books, clothes, and furniture all rely on authentication to function in the metaverse. Travel and commerce across other worlds are also necessary for growth since they might be subject to varying laws and regulations.
For the metaverse economy to thrive and prosper, it must include non-fungible tokens and digital ownership records kept on the blockchain. A cryptographic key that can’t be deleted, duplicated, or destroyed ensures the strong, decentralized verification that is crucial for the success of metaverse civilization and its interactions with other metaverse societies, which is why NFTs are so important.
NFTs may be more important than the hoopla surrounding multi-million dollar digital art auctions because they may allow the beginnings of human civilization based on free markets, autonomous ownership, and social contracts to develop in the metaverse.
In the beginning, NFTs were all about digital art. But Eric Anziani, COO of Crypto.com, predicts that it will be much more potent. In the future, virtual worlds will use this capability to represent any form of the digital object.” As a result, the possibilities are limitless.”
Development of real estate in a new world
While strolling around Decentraland, you’ll come across people conversing by fountains, shopping in shops, jogging along the shore, and casino croupiers encouraging customers to play high-stakes poker with real money on the line.
People who have acquired property in Decentraland and developed settings that pique the interest of other residents have unintentionally sparked these encounters.
Even if the Earth is still in its “Iron Age,” the experience is far from hyper-realistic. Despite this, the promise is already apparent even in these early models. Like in the real world, people congregate in intriguing locations in the metaverse. And just as in Paris or Beverly Hills, the value of virtual estate rises due to its appeal.
Decentraland, like other metaverses, relies heavily on the notion of adjacency of land. There is a permanent point where all metaverse parcels are connected. Consequently, there is a shortage of properties because of the restricted supply. Due to the rules of supply and demand, property values increase and decrease due to scarcity.
“A social experience with an economy powered by the current layers of land ownership and content distribution” is what the Decentraland manifesto calls for.
Property transactions in the metaverse are powered by NFTs, which are virtual currencies. Thanks to these tokens, indisputable evidence of ownership is more secure than any property title.
Because of the way smart contracts are designed and the NFTs are coded, it is impossible to spoof metaverse property rights, according to Anziani. When you possess an asset, you can prove your ownership in full.” You may then claim ownership rights based on the rules and circumstances of that virtual environment.”
London, New York, or Tokyo-quality property sale
The ramifications of the real estate revolution are already being felt to their fullest extent. Republic Realm, a digital property investment firm, paid almost $900,000 in June for a plot of land in Decentraland. Virtual mall Metajuku, modeled after Tokyo’s Harajuku area, will be built on the property held by Republic Realm, an investment firm.
Investors should expect REITs to start looking for possibilities in the metaverse if these actions continue. Decentraland’s economy is flourishing, which is reflected in rising property prices. When they launched their virtual world in 2017, their developers had this exact aim.
As stated in the metaverse’s manifesto, “Decentraland’s value proposition to application developers is that they may fully capitalize on economic interactions between their programs and consumers. The platform must be able to exchange currencies, products, and services in order to facilitate these economic relationships.”
The fashion industry was one of the first to see the possibilities of NFTs and the metaverse from an economic standpoint. Louis Vuitton’s LOUIS THE GAME and Burberry’s Blankos Block Party video games include NFT accessories.
Limited edition NFT shoes designed specifically for virtual worlds are being sold for millions of dollars by RTFKT, a metaverse shoemaker.
A virtual world economic model based on NFT technology is poised to take off in the Iron Age of the metaverse, promising considerably greater economies of scale.
There were more than 100 million cryptocurrency users throughout the world only five months ago.” Anziani estimates that there are now more than 200 million active users. A “strong conviction” is that “metaverses – the merging of virtual worlds with blockchain technology – in particular, NFTs” will lead to a billion- or two-billion-dollar market.