Virtual Land: The world of metaverse
If Cosimo de’ Medici was alive today, I wonder what he might have thought of the fast growing world of cryptocurrency – the decentralised digital payment system that does not rely on banks to verify transactions – via the likes of Bitcoin, Ethereum, Litecoin and Ripple. He probably would have created his own (the “Medici”) to enhance the family fortune alongside his bank.
Now in the 21st Century, many transactions are being carried out using cryptocurrency and it is an area Forsters has years of experience advising on (https://www.forsters.co.uk/sites/default/files/Introduction-Blockchain-Cryptoassets.pdf)
As a property lawyer, to date I personally have not crossed paths with the use of cryptocurrency, blockchain and non-fungible tokens – in part, no doubt, as the relationship between these forms of currency/transactions and the Land Registry are in their infancy (at best). So you can imagine I was most intrigued to read about the newest development – the growth of virtual land transactions in the metaverse (which to the untrained eye feels like reliving teenage evenings playing a game of the SIMs or Theme Park but injecting millions of $s worth of cryptocurrency into the mix).
What is a metaverse?
A metaverse is essentially a 3D virtual world where real and digital worlds are integrated using technologies such as virtual reality and augmented reality. In this world, users can meet and communicate as digital avatars, explore new areas and create content – these are immersive digital experiences. Indeed Justin Bieber’s avatar performed a live concert in the metaverse in November 2021.
Can I buy land in a metaverse?
Yes you can buy virtual land and it is becoming quite the fashion – from Snoop Dogg to PWC, people and companies are wanting in on the action.
Metaverse Property or the Metaverse Group describes itself as a “leading virtual real estate company offering exposure to this burgeoning industry via the Metaverses. We facilitate the acquisition of virtual property along with a suite of virtual real estate centric services that are provided by pioneers of the crypto, blockchain and non-fungible token (NFT) industries“. They offer (or plan to offer) services which include buying and selling of virtual real estate across the metaverses, development of virtual land, expert level consulting for all major metaverses, finding a rental within the metaverses to fit any need, property management of the existing real estate and marketing and advertising of businesses in the metaverse.
For example, you can buy virtual land in “Decentraland” (powered by the Ethereum blockchain) where there are districts which include Crypto Valley, Dragon City, Aetherian City, Vegas City, Fashion Street etc. Reuters reported in November 2021 that a patch of virtual real estate in Decentraland sold for a record $2.4 million worth of cryptocurrency to Tokens.com (a cryptocurrency investor). Indeed whilst Metaverse Group is based in Toronto (on terra firma), it has its virtual headquarters in Decentraland in Crypto Valley (metaverse’s answer, they say, to Silicon Valley). There is a fashion precinct in Decentraland which will be used to host digital fashion events and sell virtual clothes for avatars. No doubt there will be many more diverse offerings too. Metaverse Property also sells/rents other land, such as in “The Sandbox”, “Somnium” (for waterfront or roadside properties), “Cryptovoxels” or “Upland”.
However, to ensure that the digital real estate has value, supply is limited – so for example, Decentraland is made up of 90,000 “parcels” of land which are each around 50 feet by 50 feet. The land acquired for $2.4m worth of cryptocurrency by Tokens.com in the Fashion Street part of Decentraland last year for example was made up of 116 smaller parcels measuring 52.5 square feet each – so 6,090 virtual square feet.
There are other virtual real estate companies like SuperWorld where apparently the Taj Mahal, Central Park and the Sydney Opera House amongst others are for sale.
Fantasy or Fabulous?
As the New York Times suggests the acquisition of virtual land is still highly speculative and no one knows for sure if this boom is the next big thing or the next big bubble. This type of property is not tangible and cannot offer you somewhere to physically live and invite family in. However, it does open a world of opportunities. As commentators have said, once we had doubts over that thing called the “internet” and now look at us.
So it is very much a case of watch this “virtual” space! But in the meantime, Forsters are here to help you with your physical property needs (excuse the shameless plug!)
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