Why Metaverse Real Estate Is Selling For Millions - Cheddar Explains - YouTube

Imagine a world where you can visit an art gallery, get a tarot reading, watch a dog

show and take part in a Halloween treasure hunt, all while sitting at your desk.

Sure, that seems feasible.

Now, imagine someone paying a lot of money, say $6,000, for just one of these 16x16m squares

of this world.

Well now hold on a minute.

This is Decentraland, a virtual city home to 90,000 parcels of land that are growing

in value by the minute.

It’s just one of many metaverses you can visit to buy, sell or just come along for

the ride.

And we’re talking about real money here…

The Ethereum blockchain, host of Decentraland, settled $2.5trn-worth of transactions in the

second quarter of 2021 - about the same as Visa.

Virtual real estate is looking more and more like the next frontier for digital ownership.

Its technology has the potential to shift the global economy into a new age of decentralized

finance.

And now that we’ve begun, there’s no going back.

To truly understand, I knew I had to visit Decentraland myself.

But first, I needed some guidance.

Lastraum is a developer at Decentraland.

He’s staying Hey, Lastraum.

Hey, how are ya?

Lastraum, what is Decentraland?

Decentraland is a metaverse.

Metaverses have existed before.

We play Grand Theft Auto V online.

That is sort of a metaverse.

It was made public in 2020 by Argentinians Ari Meilich and Esteban Ordano, who wanted

to build a virtual reality experience owned by its inhabitants.

No big corporation pulling the strings.

The world’s inhabitants are contributing to the content and experience, and in turn,

helping drive up the value of Decentraland’s cryptocurrency.

So cryptocurrency is both a digital asset that can be used to trade for value, but also

be held to increase its own value.

So it’s a mix between a currency and a stock, let’s say.

Cryptocurrency uses a decentralized system to verify transactions and keep records.

Think Bitcoin or Ethereum or yes, Dogecoin.

And so for instance, with Decentraland, they have their own currency called MANA, and I

can hold that MANA like a stock and they can appreciate in value significantly, or I can

use that currency in-world to purchase unique items.

So, how are people making money in Decentraland?

So it’s called non-fungible token, meaning there’s only one of them, it’s unique

and it’s digital.

Because each NFT is unique, they’re not interchangeable, unlike a dollar bill for

example.

With these digital assets, these digital ownerships, people are providing utility, being able to

utilize that ownership for certain things.

In Decentraland, people are buying and selling NFTs in the form of art, music, digital apparel

called wearables, games, and, yes… land.

People are using real money, through MANA to buy, sell, and rent digital land.

Land is separated into 90,000 256-square-meter parcels.

Each parcel is its own verified NFT, meaning it’s completely unique and can’t be duplicated,

just like land in the real world.

You own the land, that’s an actual NFT and that gives you rights to build whatever you

want on your land.

Or to provide access or denial to anybody on your land.

I don’t have to go through the title office or the normal ways of selling land, I just…

put it on the marketplace and digitally swap it.

It’s very simple.

You know, today this is blank and in 1 hour, this could be a skyscraper.

The person doesn’t need to go through all of the city planning, the physical limitations

in the real world.

Their imagination can control what they can put on here.

On this land, owners can build businesses that offer something to buy or rent, or just

store the NFTs they’ve purchased.

For example, I buy a parcel of land for 3000 MANA, just under $2000.

Let’s say I build a gallery to showcase some NFT art.

Artists could promote their work and curious visitors make my land more popular which,

in Decentraland, makes it more profitable - kind of like living in a trendy, desirable

neighborhood in the physical world.

Decentraland really does feel like a typical virtual roleplaying game.

You can tell the developers were inspired by games like Second Life and Minecraft.

Developers encourage active participation in Decentraland and that translates directly

to higher land value.

And it’s not just individuals that are investing in the community.

Playboy hosted a Miami Beach-themed art exhibit.

Atari partnered with Decentraland to open a virtual casino.

And the digital real estate investment firm - yes, that’s a thing - Republic Realm made

news earlier this year for making the largest-ever purchase of NFT land: nearly $1m for the equivalent

of 16 acres of land for a virtual mall.

This is why virtual land here is valued so high, or at all for that matter.

As long as there are people using this world as a domain for the creation, purchase, and

sale of NFTs, the land will hold value.

At the beginning of 2021, Decentraland’s daily active user average was around 1,500.

By March, it was at 10,000.

And this is just one of many metaverses attracting the attention of big tech companies.

Facebook CEO Mark Zuckerberg has announced that Facebook will become a "metaverse company."

calling it “the successor to the mobile internet.”

Lastraum believes each metaverse can coexist as if they were different countries, where

users will be able to visit each metaverse to experience their unique benefits.

I truly, truly hope and have a desire to push this platform to be the Oasis from Ready Player

One.

Hopefully not the real world replication where it’s all gone south and we’re all living

on top of each other in stacks.

But at least the immersion and experience that an online space can provide.

It’s a really cool flip of the script where the users

own everything and the users create everything and the users decide where this goes.

Especially Decentraland has the capability to be what the internet should be.

Thanks for the tour, Lastraum!

And now for the million-dogecoin question: What’s the catch?

Well for starters, let’s look at energy consumption.

At the moment, just one Ethereum transaction uses the same amount of electricity that the

average U.S. household uses over five days.

Thankfully, it’s something Ethereum’s team is working on solving.

Then there are some familiar problems that plague our real-world economy.

People will look for ways to hack and game the system, launder money, or fill it with

microtransactions.

In the cyberspace, now becoming the metaverse, we’re bringing very similar risks along,

but they’re getting more amplified because of this unknown, uncharted territory.

This is Kavya Pearlman, founder of the non-profit XR Safety Initiative, which sets privacy,

security, and ethical standards for immersive technology.

She’s got some concerns about all this.

There is no framework.

No security, safety, or privacy framework that addresses these things.

There are no laws even.

If we don’t proactively understand this, then we are really just experimenting.

Then there’s privacy.

Every time you’re connecting, creating, or doing commerce, we need to be sure of what

is going on with all of this data.

Every time the data exchanges hands, we’re giving all this sophisticated data to these

folks.

If you were to buy some land in Decentraland only to have a big tech company CEO peeking

over the fence to keep an eye on your activity, the corporate-free paradise may need to revise

some of its privacy rules and regulations.

At the moment, metaverses are largely community-run, with decisions made through a DAO, Decentralized

Autonomous Organization.

Users vote on policies that shape their virtual world, from what kinds of wearable items are

allowed, to upgrades to land and estate features, right down to the date of future land auctions.

But in the face of serious digital crimes, a DAO can only do so much.

If somebody replicates what you made into a different record, where are you going to

go to fight that?

And that is a huge issue, and those are rights that we need to establish.

Ultimately, with great power, as they say, comes great responsibility.

Whoever is going to hold this power, we remain committed to holding them accountable and

keeping ourselves accountable and that’s the crux of it all.

If metaverse economies like Decentraland want a seat at the real-world table, it seems they

may have to face real-world scrutiny.

That means helping ensure that the future of virtual reality belongs to the people.

It’s like the folksong says.

“This land was made for you and me.”

Well, as long as you’ve got the crypto to buy it.