Is virtual real estate a good investment?

The metaverse has taken the world by storm. Whilst it’s been in the gaming community for years, advancements in virtual reality and the explosion of Non Fungible Tokens (NFT’s) and the blockchain have catapulted the metaverse into the broader community. And with Facebook changing their name to Meta, the metaverse seems to be on-topic in every café around the world.

So what is the metaverse? 

Facebook will have you believe that there is just one metaverse with limited real-estate but in reality, there are no limits. In a metaverse, “users traverse a virtual world that mimics aspects of the physical world using such technologies such as virtual reality (VR), augmented reality (AR), AI, social media and digital currency. The internet is something that people “browse.” But, to a degree, people can “live” in the metaverse”.

Why are people paying real money for real estate in a metaverse?

It’s becoming common for metaverses to allow digital assets such as land, houses and art to be created bought, traded and housed inside metaverses as an NFT’s. There are multiple reasons why people pay real money for digital assets that seemingly have no intrinsic value. These are:

• The digital asset is useful such as a virtual meeting room in a metaverse for zoom meetings with work or family
• The purchase of the digital asset lets you join an exclusive club giving you member access only benefits.
• You think the digital asset will be worth more than what you pay for it in the future and are therefore see an investment opportunity.
• You want to show off your digital asset in a metaverse.

Like cryptocurrency investments, it’s very difficult to find intrinsic value in metaverse digital assets such as real estate, art, buildings and cars. Before you decide to invest your life savings in NFT’s or other digital assets in a metaverse, understand that there is serious risk involved before you get caught up in the hype.