How virtual real estate is reshaping the crypto world
$69 million, the price of a piece of art that doesn’t exist. Sounds crazy, but this is real, and Singapore-based investor Vignesh Sundaresan, better known as Metakovan, actually bought it himself. The investor made headlines in March when he purchased the digital artwork titled “Everydays: The First 5000 Days” by the American artist Beeple at Christie’s.
This type of art is called NFT, or non-fungible token. It is a brand new type of virtual asset which is based on a blockchain technology, therefore verifying its ownership status. This year, they have been soaring in popularity all across the world with their prices taking off.
Metakovan is now seeking to display the virtual art in about four different virtual environments. He has been working closely with experts and architects to create gallery complexes which are open to the public through web browsers or even possibly VR. This is just one aspect of the new economy which is based on blockchain technologies and which possess lands, names and even buildings the can be purchased and sold as NFTs. These are normally worth hundreds of thousands of USD.
Moreover, Metakovan has some progressive plans for the future, but he claims to be the world’s biggest NFT investor. He possesses a huge collection of crypto assets including NFTs, as well as the Metapurse fund, which are all together worth an estimated $189 million.
Anand Venkateswaran, who currently runs the Metapurse fund alongside Metakovan, stated:
“The current Cambrian explosion of NFTs that you see is all about acquisition – people want to buy up NFTs, gobble as many of them as they can. But it’s just the tip of the iceberg. The real explosion will happen when they’re able to … experience these NFTs as they were intended. If it’s a plot of virtual land, you ought to move around in it, have an immersive experience in it.”
Atari, the world-renowned video game producer, spoke to Reuters saying that it has planned to release its very own blockchain virtual world and will be revealing details soon. Frederic Chesnais, who is the head of the blockchain division at Atari, said that online environments will become huge, no matter the fluctuations of Bitcoin’s price. He further mentioned that NFT real estate can possibly be worth millions of dollars someday.
However, experts and investors also note that despite NFT being a great investment, one should be wary and stay alert to fend off fraudsters who could easily trick participants.
Blockchain Real Estate
Many people are now wanting to learn more about these online environments, and rightfully so. The most popular ones at the moment are Cryptovoxels, Decentraland, The Sandbox and Somnium Space, with their prices reaching new peaks every day.
Decentraland, as an example, has witnessed over $50 million in total sales, which includes usernames, virtual outfits, land and more… Just last week, a piece of land which is 41,216 virtual square metres was sold for a whopping $572,000, which was a record for the platform.
Metaverse fans have implied that the scramble to purchase virtual land is similar to the first few years of the internet, where people rushed to get their domain names. At the moment, there are several thousand landowners on these platforms.
Venkateswaran went on to say:
“All of virtual land and these virtual spaces are basically real estate on which experiences will start to centre, on which attention will start to focus. That’s where all of the attention is and that’s monetisable in a million different ways.”
There is not an awful lot of people who are causing this rise in prices. Decentraland witnessed 334 buyers during the month of March, which caused land sales volumes to soar past $4 million, going from $767,400 in February and $246,134 in January.
Estates used to cost about $60,000, they are now valued at over $400,000 per estate. Some of these virtual worlds have even created their very own decentralized currencies, such as Decentraland’s MANA, which has increased by over 3500% since 2020 on Coinbase.
Many people who managed to snatch virtual land earlier on are now moving to selling them to companies, making impressive profit.
Atari has even licenced a retro arcade in Decentraland where it will be launching a casino. The platform has previously hosted a virtual fashion show with Adidas, where the designs were auctioned as NFTs. Many musicians are also drawn to this concept as they are looking to perform on the platforms and even sell merchandise in the form of NFTs. Travis Scott, famous American rapper known for his Astroworld album, even managed to draw in an audience of over 27 million guests to five concerts on Fortnite,
Should we expect a crypto winter?
Cryptovoxels founder, Ben Nolan, says:
“I expect that there’ll be a crypto winter in the next couple of months, the whole NFT boom will explode and then all the value will absolutely collapse. Doing NFTs as an investment or as a way to make money is really ill-advised. Do I think most people will use virtual worlds? Probably not, but I think a lot of people will and I think NFTs are a big part of that growth. Actually walking around with another person in a virtual space and looking at art together is a really nice way to spend time.”
Mateen Soudagar, the investor based in Australia, said that he is not interested in reverting to real-world investments, instead he is looking to build on his virtual fortune. He says:
“If you’re a believer in the movement then you think that the world will move into this space. So when you’re putting it into fiat you’re going backwards.”