Digital real estate is a popular topic of conversation among investors and new reporters. As the name suggests, digital real estate is something that exists in the digital world.
Everyone is familiar with real estate and how to buy or sell a piece of land. Digital real estate is similar, except that what you buy does not have a physical presence.
What is Digital Real Estate?
Like real estate, where you can buy a piece of land or property, digital real estate works in the same way, allowing you to purchase digital properties. Digital real estate consists of everything from simple website domain names to actual plots in the metaverse.
For example, in near future, you may find flats for sale in Askari 10, Lahore in the metaverse.
Digital real estate is a lucrative business that does not require significant capital to start. This makes it an ideal choice for people that are looking to invest but lack millions in the bank, such as students and working-class citizens.
With digital worlds like the metaverse making waves, digital real estate is more valuable than ever. Digital real estate in the metaverse is exactly what it sounds like.
It’s like buying a piece of land on another universe or planet with a limited number of pieces of land. A limited number of plots available creates a limited supply, creating a stable demand and creating value.
Why Digital Real Estate Matters
This is an age-old question that repeats itself every time a new, revolutionary technology is introduced. When the internet was conceived, businesses denied its credibility and paid dearly for their haste.
For example, Graana.com, Pakistan’s 1st Online real estate marketplace, uses digital technology to resolve real estate problems in Pakistan.
Digital real estate is working on a similar phenomenon. People are spending increasingly large amounts of time in digital worlds, and most companies are trying to establish a digital presence in this world.
It can be a billboard to advertise something to people in the metaverse or create a digital twin of a physical business.
How to Buy Digital Real Estate?
Buying digital real estate in the metaverse is a simple concept once you’ve narrowed it down to the basics.
Step 1: Create a Digital Wallet
The first step is to create a digital wallet and store your virtual currency in it to buy land plots in the metaverse. You can not purchase properties in the metaverse using dollars. You need to convert them into the respective currency.
The currency for Decentraland is called MANA, while if you’re trying to buy land on Sandbox, the currency is called SAND. These currencies are not interchangeable, and every decentralized world can create its own currencies or just use one of the above-mentioned currencies.
Step 2: Choose a Platform
The next step is to choose a platform where you will purchase your virtual plot. You can buy property directly through the metaverse platforms Sandbox or Decentraland.
Another option is to use a third-party retailer like OpenSea and NonFungible.com. This is relatively a better option for new investors as Openseas allows you to compare prices and has the option of bidding.
Third-party platforms often quote prices in real-world dollars as well, making it easier to gauge the actual value of what you’re purchasing a bit easier.
Step 3: Closing the Deal
The hardest part of closing a real estate deal is the arduous amount of paperwork that you have to fill out. Thankfully, in the metaverse, you do not have to worry about this hassle, as buying virtual land is as easy as clicking ‘buy now’ and owning the property.
Make sure to see if there is a blue tick next to the listing to ensure that the listing is verified. This helps protect you from scammers which are abundant in this unregulated market.
Volatility is Your Friend and Enemy
Real estate is considered a substantial investment because it usually appreciates in the long run and is primarily safe from volatility. Digital real estate, however, is very volatile due to its decentralized nature. In some cases, a virtual piece of land can appreciate exponentially over a night or crash to non-existence.
This volatility will get better as the market matures; however, it still poses a threat that where there is an opportunity, there is risk associated with it. Digital real estate is uncharted territory and there is tremendous upside potential with virtual lands selling for millions of dollars. There are also stories of many investors going bankrupt due to the market crash.
The market for digital real estate is constantly evolving and can keep you on your toes, but with some thorough research, patience, and calculated risk, there is no reason why one shouldn’t invest in this emerging market.
