Confused About Virtual Real Estate? 10 Things to Know

Virtual real estate -- that is, stakes for parcels of property that exist only in a digital universe called "the metaverse" -- has been taking the world by storm lately. Everyone and their grandmother are thinking about it, and some are even investing heavily in metaverse real estate.

There's a lot to know, though, and, understandably, you might still be pretty confused by it all. Just what is a blockchain? How do you get the digital money it takes to complete a transaction? We'll walk you through some things you should know before diving in.

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First and foremost, buying virtual real estate means you’re buying into the metaverse. The metaverse is a place that exists only in the digital world, like the internet. And like the internet, the metaverse has lots of different places you can visit within it.

You can think of it as a universe all by itself and the different platforms as digital worlds that exist within that universe. So, although the digital universe is endless, each digital world is small and offers unique investing opportunities.

ALSO READ: How to Buy Land in the Metaverse

Some people come into metaverse real estate with a background in cryptocurrency, but many more don't. That's OK. You can't know it all right away. When you've chosen a digital world to buy your virtual real estate in, you'll need to purchase the right kind of cryptocurrency for the platform.

Most platforms have a digital wallet they prefer and will tell you what that is when you're setting up your account. Fill it up with the right crypto coins or tokens, and you're ready to make your buy.

What is a blockchain, you ask? It's a digital ledger that exists solely for the purpose of recording transactions. Many people like blockchain technology because it generally requires multiple copies of the ledger to agree before a change can be made, creating a more secure environment for storing your data.

It's also anonymous, giving you a random description rather than a name in case you want to protect your transaction's privacy. Most metaverse platforms run on the Ethereum blockchain, though they can accept various cryptocurrencies as payment.

ALSO READ: 3 Ways Metaverse Mortgages Will Affect Virtual Real Estate

Because the ownership records for all virtual real estate are recorded on a blockchain, it takes almost no time to do a title search or transfer ownership of a property. Rather than digging through hundreds of years of ancient records, blockchain records can be automatically verified and your new transaction recorded right away.

That means exceptionally minimal fees for transacting and just a few minutes of waiting for your sale to be finalized. This same technology may one day revolutionize real-world real estate transactions, too.

Instead of getting a piece of paper in the mail, when you buy virtual real estate, you get an NFT that represents your sale. It's your digital deed! You'll store this in your digital wallet (the same place you store your digital money), and it will prove your ownership of your property.

Every virtual real estate NFT (deed) records the world the property is located in, the property's unique description (often map coordinates), and your information as the owner.

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People are often confused about the why of digital real estate. Why would you buy this at all? It's simple. It has value, and that value is currently rising.

Companies large and small are finding that metaverse platforms are great places for interacting with millennials and Gen Zers, but they're also realizing that these platforms can be used to conduct business with people across the globe at the same time.

Digital offices -- as well as digital stores, billboards, and all kinds of interesting and unique entertainment venues -- are rising from the soil of digital worlds.

Although the metaverse has only recently become a buzzword that’s flung around constantly, it’s far from new. One of the first true metaverse platforms, Second Life, opened its doors in 2003 and is still in operation. People buy and sell real estate there and have for many years, as well as offer rentals, commercial advertising spaces, events, and other forms of commerce. Metaverse platforms are far from new, the pandemic has just brought them to the forefront as a way for humans to connect in a uniquely isolating time.

ALSO READ: Will There Be a Metaverse Real Estate Boom in 2022?

Although much of the hype right now is for digital land sales, there's a lot more in the metaverse to invest in. If you'd rather pick up something premade, you can choose to buy billboards, office buildings, arcades, and other kinds of experiences or games.

Depending on the type of real estate you choose, you can charge rent or sell tickets to events -- or both. For example, you might buy a convention center and hold a virtual conference where you charge admission and table fees for vendors who may want to hock their digital wares.

Your target audience isn't limited to people who own property in your metaverse platform. Anyone is welcome to come in and participate in the local economy. Popular events can help expand the consumer base of a particular platform and grow the community.

The more people invested in the success of a metaverse platform, the more likely it is to have a very long future. These people often buy property, eventually, or at least lease something, giving them more ownership in the world.

ALSO READ: 5 Interesting Ways to Invest in the Metaverse

Many images of the metaverse puzzlingly include things like virtual reality headsets. Although these can be used to enhance experiences or access specific metaverse platforms, they're not required to access the more popular metaverses where real estate is available for purchase.

All you need is a desktop computer and a fast internet connection to get to your virtual real estate, despite what the commercials may be showing you. Everything else is extra.

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It can seem pretty intimidating at first, stepping into a whole new world, but it's not so bad once you take that first leap. The digital world works much like the real one, and digital real estate follows many of the same principles.

Location is still everything when it comes to real estate investments. The only difference is that you have more than one planet to choose from when you make your virtual real estate purchases.

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