“Everydays” — a unique virtual-only work by US artist Beeple — sold for $69.3 million at auction – © AFP
The metaverse is capitalizing itself very nicely, thanks for asking. Virtual real estate is worth very big, very real, bucks. People are putting in physical millions for what are in effect fictional properties. The virtual real estate market is now acting very much like the actual real estate market, and the skeptics are growing rich on the criticisms.
Virtual real estate is anything but new. It first started years ago in Second Life, got a few minutes’ attention, and vanished in a lack of additional information. The criticisms and the issues were the same back then. (So similar, in fact, that they could have been cut and pasted for virtual real estate.)
This time, however, the hype is backed up by blockchain, cryptocurrencies, NFT artworks, and a lot of very real money. The new virtual world brings with it status. There’s a style thing to talk about. There are real investors, too.
The entirety of truly “social” media is coming along for the ride. E-sports, entertainment, etc. are natural fits in the metaverse. This is more than Web 3. This is a true move of assets into something very different. Be skeptical, but don’t ignore it, because it will come looking for you.
The psychology of virtual real estate
It’s not at all surprising that generations raised entirely on visual media are drawn to a purely visual product. This mindset is about as “inevitably normal” as you can get without becoming a lifestyle ad yourself.
The credibility of virtual real estate is also backed up by a lot of new tech. Virtual reality is still in its pre-natal stage, but much improved. 3D is also pretty visual, with the added physical grunt of a lot of power going through it. You get “presence” whether you want it or not.
There’s another big selling point – Reality. Why wouldn’t you want a stress-free, safe place? That’s what these virtual worlds deliver. A place where you don’t have to be beaten up on a minute-by-minute basis by the physical world and its problems? This isn’t “escapism”. It’s common sense.
What’s wrong with that?
Price, mainly. You can talk about “democratizing” property all you want. Money and democracy have never had much in common. You could very easily argue that money prevents democracy. The real world hasn’t suddenly turned nice, caring, and obliging. It’s covering its costs and of course, making money for itself. Many skeptics, myself included, aren’t so much worried by the mindset as by the obvious opportunities to lose money and get ripped off severely.
Predictable downsides to virtual property
These things can lose money in any basic market scenario. You could be buying lousy property quality in technical terms.
Like:
- You could buy something you can’t build a top quality house on because the software can’t handle it or some other support reason. There are NO reports of that, but it’s quite possible as generational software issues and the usual lousy upgrades management scenarios kick in.
- Platforms, schmatforms. Bugs do happen, and if you’ve got a few jumpy million getting bugged, you won’t like it. Nor will your buyers. Minor bugs can become major bugs. Any type of software can degrade.
- When this market starts acting like a real market, losses are inevitable. This is a property market, after all.
- At a certain price, anyone can come unstuck. Imagine taking out a loan to buy a visual property at a high-end price.
- You can over-invest. A virtual portfolio could be just as tricky as a real property portfolio, with ease.
- Data load will be (and is) enormous. Doesn’t matter how big you are, your systems can crash. That could get nasty. Backups and redundancies aren’t necessarily cheap, either, and real run time is an obvious issue.
- Platform security isn’t (and can’t be) a given. No platform will take unlimited liability. Your high-status NFT could be vandalized, stolen, etc. You may need to insure your virtual property.
A future with many possible upsides
Grim so far, isn’t it? To be strictly fair about this despite my many current doubts, things could also credibly get a lot better in the metaverse.
The current strong points can get stronger:
A portable world isn’t such a bad idea by any logical standards.
You have a viable, realistically attainable, place for yourself.
Virtual properties offer a lot of choices for aesthetics and inclusions you want in your world,
You can control your interactions with the outside, including people.
People have always wanted safe private spaces. That could be the deciding factor in entering the metaverse. You don’t get the far-too-many issues of living in a cluttered, toxic, dangerous physical world.
You can have far more control of everything, even to existential levels. You could “gap” your virtual world away and keep it all to yourself by simply hitting an “exclude” function shutting out everything else to keep things private and secure. (I’ll spare you the bit about “arbitrary spaces”, but it’s like set theory – You don’t have to be part of any other set. You can be your own set.)
Self-sustaining operating systems could also eliminate dependency on external needs.
It’s only a matter of time before tactile and sensory realities get involved. You should be able to fly a plane, go scuba diving, explore the universe, etc. within the reach of current, let alone future, tech.
It’s also quite possible that many of the sci-fi ideas will become viable. Why bother to die, when your digital self can simply set up home in your preferred virtual environment?
The virtual existence can be virtualized to the point of no dependence on physical systems. After all, you’re basically just shuffling electrons, in the physical and virtual worlds.
There is nothing even slightly unusual in any of this. There’s nothing undoable about it, even in theory. The laws of physics don’t mind, either. You’re basically living in a set of equations anyway. (Well, if you will insist on being electromagnetic, you folksy throwback, you…)
Yep, you could even ponder the possibility of life in other metaverses. How odd.
Virtual property is the extremely predictable, behaviorally natural, application of an unevolved future reality in so many ways. Be wary. Learn the environment. Trust nothing until you have reason to trust it. Should be OK.
