Why Is The Metaverse A Hot Investment Topic Right Now?

But what exactly is this metaverse, and how does it work? After more than 30 years of suggestion and association with video games, the metaverse is regarded as one of the most promising developments in new technology. It is a technology for the internet and virtual reality.

Decentralized Metaverse

There are no rules when it comes to describing the metaverse. Some people think the metaverse already exists in the form of video games that let players interact in 2D worlds. From Facebook rebranding itself as Meta to Microsoft acquiring ActivisionBlizzard for $69 billion, big names are making moves to get a large stake in the now blossoming digital aspect. These major technology corporations envision creating a 3D virtual world that resembles the actual world. It is a place where anybody can enter and exit whenever they want.

However, the metaverse that's now gaining popularity in the digital world is the internet's 3D version. It consists of a finite number of virtual plots of land that are effectively non-fungible tokens (NFTs) recorded on the blockchain. These metaverses are constructed on blockchain-based platforms that operate according to rules set forth by decentralized autonomous organizations, often known as DAOs. These virtual reality platforms include Decentraland and The Sandbox game, to name a few examples. Thanks to the combination of blockchain technology and virtual reality, people can design their avatars and meet on virtual pieces of land for a variety of purposes. They can do everything from holding formal meetings to connecting and socializing with other people.

Increase in popularity

Buying and reselling real estate in the metaverse is now a big business. Investors and companies are now paying millions of dollars to acquire plots of land. Land prices on major platforms have recently soared more than 500%. According to a report by Grayscale, a top cryptocurrency asset, the digital world may grow into a $1 trillion business shortly. The most expensive acquisition to date is Republic Realm’s $4.2 purchase of 100 private islands on Sandbox.

Why are people paying so much for metaverse land?

Real estate investors and corporations are purchasing property for the digital experience to promote their brand or even profit from selling the land when the price rises.

Many entities are looking to get in on the action. Warner Music Group announced a partnership with Sandbox to utilize its virtual LAND plots in The Sandbox game to develop a location that will act as a music-themed amusement park and a performance venue for its performers. Fashion brands like Gucci, Christian Dior, and Ralph Lauren are selling virtual clothing in the metaverse. Barbados has also just purchased a plot of property on Decentraland, where it plans to construct its embassy. While celebrities like Snoop Dogg and Paris Hilton are hosting parties on their virtual lands, JP Morgan just became the first bank to create a branch in the metaverse, known as the Onyx Lounge.

Is buying land a risky or worthwhile investment?

The metaverse contributes significantly to the growth of the digital economy because of its high-value forecast. Therefore, it is definitely a wise investment for companies to increase brand awareness and connect with their audiences.

The price of land on many metaverse platforms is now soaring. Nevertheless, investing in the metaverse is a risky and highly speculative endeavor. The exponential rise in trading activity suggests that there might be a lack of long-term commitment. Some are skeptical about the concept, citing that the metaverse is not the "real world."