How the billionaire business of buying and selling land in the metaverse works

Nearly $2 billion has been spent on virtual land in the last 12 months as people and businesses race to establish themselves in the metaverse, research reveals.

But we are years away from the metaverse emerging as a single immersive online space where people can live, work and play in virtual reality. So is buying land really a big gamble?

‘View my own work’

With red mohawk-style hair and a permanent cigarette in her mouth, artist Angie Taylor’s avatar doesn’t look like a typical landowner. But she is part of a growing group of people claiming their piece of land in the new virtual worlds.

“I bought my first land in the metaverse in July 2020 and paid around €1,500. I bought it to exhibit my own work, but also to hold metaverse events that would promote my art and also other people’s art,” she says.

Angie, who is from Brighton, UK, has built two galleries filled with weird and beautiful digital artwork, which are being sold in cryptocurrency, on her ground in the Voxels world.

Angie’s lots are the size of a small family home (if you compare them to her avatar size). The tallest one spans three floors and has a rooftop terrace with a black-and-white striped driveway, and a pink taxi permanently coming and going just for fun.

But you get a real sense of the dimension of this world from the air.

“Press the F key and you can fly to take a look at my neighborhood,” explains Angie.

Above its gallery you can see thousands of identical plots of land stretching to the horizon.

Voxels is one of dozens of virtual worlds that describe themselves as metaverses. It’s confusing, because people often talk about “the metaverse” as if there’s only one. But until one platform takes over, or these disparate worlds come together, companies are selling land and experiences in their own versions.

cryptocurrencies

Researchers at DappRadar, who analyze the metaverse, claim that $1.93 billion worth of cryptocurrencies was spent on purchasing virtual land in the last year alone, with $22 million on about 3,000 plots of land in Voxels.

DappRadar is able to monitor this because Voxels is built on the ethereum cryptocurrency system, in which, like all virtual currencies, all transactions are recorded and published on a public blockchain.

One of the most popular worlds is the cartoon-style Decentraland. Launched in 2020, its plots of land are selling for thousands, sometimes millions, of dollars. Samsung, UPS and Sotheby’s are among those who bought land and built stores and visitor centers there.

Luxury clothing brand Philipp Plein also owns a plot of land the size of four football fields, which it hopes will one day accommodate a store and gallery in the metaverse.

Plein, the brand’s owner, says his mother is unconvinced of the $1.5 million acquisition.

“My mom called me and said, ‘What did you do? Why are you crazy? Why do you spend so much money, what is this?'” he says.

Plein has been selling products in 24 different cryptocurrencies online for over a year. In early 2022, he opened a new store in London where he sells clothes and some non-fungible tokens (NFTs) in exchange for cryptocurrencies like Bitcoin and Ethereum, as well as pounds.

He says opening the store helped him learn more about the metaverse.

“I took a bold step by spending so much on a piece of land,” he says.

“But I kept thinking that I’ve had my mark for over 24 years, and what would I have to do if I was starting over?”

However, with the general drop in the value of cryptocurrencies, DappRadar claims that the metaverse real estate market has been in a downturn for almost a year.

In Sandbox, another metaverse in the cryptocurrency system, Adidas, Atari, Ubisoft, Binance, Warner Music and Gucci are just some of the multinationals that are buying land and building experiences to sell and promote their products and services.

Gucci has also built on Roblox, which along with other major gaming platforms like Minecraft and Fortnite, is seen as the most popular of the fledgling metaverses.

These gaming corporations do not sell land, and are managed without the use of any blockchain technology. However, they already have some of the key ingredients that sci-fi writers say we need for a true metaverse:

• – Ability to socialize and have fun;
• Your own coins in the virtual world;
• The opportunity to earn money on the platform;
• Vast thriving communities;

Gucci Town has had over 36 million visits in the year since it launched, while Nike Land has logged over 25 million in 11 months. In Gucci Town, players can buy clothes for their avatars with real money. At Nike Land, they can purchase avatar t-shirts and shoes with points they earn while playing.

The fashion industry seems to be most interested in taking advantage of the opportunities and risks associated with the metaverse.

Amsterdam-based digital-only fashion studio The Fabricant makes only clothing for avatars, creating bespoke collections and pieces for users of Decentraland, Sandbox and other cryptocurrency metaverses.

“When we started, everyone called us crazy, because they were like, ‘Why would anyone need this?’ But we were a strong believer in the idea that in the future, people would use digital goods,” says co-founder and principal designer Amber Jae Slooten.

The Fabricant’s record sale so far was a digital dress, which brought in $19,000, although it was sold as an NFT — a piece of digital art — and not worn by the owner’s avatar.

The company has just raised $14 million in funding from investors who are betting on the idea that many of us will soon live part of our lives in the metaverse.

But it is not certain if and when this will happen. Metaverses in cryptocurrency systems are generally sparsely populated and only really used when events are held, and even then only thousands, not millions, of people participate.

Even in the virtual world where Meta, which owns Facebook and Instagram, is investing billions of dollars, leaked documents show that people are not going to spend much time there.

But Slooten is convinced that as these worlds develop, people will show up.

“There’s definitely going to be a mass market in this, because if you think about the younger generation, they already play games. For them, there’s no distinction between virtual and real. But that still needs to be built.”

This text was originally published here.