“Everydays”, a one-of-a-kind virtual work by American artist Beeple, sold for $69.3 million at auction – © AFP
The metaverse is capitalizing nicely, thanks for asking. Virtual real estate is worth a lot of money, very real. People are putting up physical millions for what are in effect fictitious properties. The virtual real estate market is now acting much like the real estate market, and skeptics are getting rich off the criticism.
Virtual real estate is anything but new. It first started years ago in Second Life, grabbed a few minutes’ attention, and faded for lack of additional information. The criticisms and the problems 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 by blockchain, cryptocurrencies, NFT artwork, and lots of real money. The new virtual world brings with it status. There is a style thing to talk about. There are also real investors.
The entirety of truly “social” media adds to the ride. Electronic sports, entertainment, etc. they fit naturally into the metaverse. This is more than Web 3. This is a real asset move to something very different. Be skeptical, but don’t ignore it, because it will come looking for you.
The psychology of virtual real estate
It is not at all surprising that generations raised entirely on visual media are drawn to a purely visual product. This mindset is as “inevitably normal” as you can get without becoming a lifestyle ad.
The credibility of virtual real estate is also supported by a host of new technologies. Virtual reality is still in its prenatal stage, but it has gotten a lot better. 3D is pretty visual too, with the added physical grunt of a lot of power running through it. You get “presence” whether you like it or not.
There’s another big selling point: reality. Why I would not do it Do you want a safe and stress-free place? That is what these virtual worlds offer. A place where you don’t have to be beaten minute by minute by the physical world and its problems? This is not “escapism”. It’s common sense.
What’s wrong with that?
Price, mainly. You can talk about “democratizing” ownership all you want. Money and democracy have never had much in common. One could very easily argue that money prevents democracy. The real world hasn’t suddenly become nice, warm, and accommodating. You are covering your costs and of course making money for yourself. Many skeptics, myself included, aren’t so concerned with the mentality as they are with the obvious opportunities to lose money and get severely ripped off.
Predictable Disadvantages of Virtual Ownership
These things can make you lose money in any basic market scenario. You could be buying a property of poor quality in technical terms.
I like it:
- You might buy something that you can’t build a high-quality house on because the software can’t handle it or for some other support reason. There are NO reports of that, but it’s very possible as the usual generational software issues and lousy update management scenarios kick in..
- Platforms, schmatforms. Mistakes happen, and if you have a few nervous millions being picked on, you won’t like it. Neither do their buyers. Minor errors can become major errors. Any type of software can be downgraded.
- When this market starts to act like a real market, losses are inevitable. Is is a real estate market, after all.
- At a certain price, anyone can get unstuck. Imagine taking out a loan to purchase a visual property at a high-end price.
- You can overinvest. A virtual portfolio could be as complicated as a real estate portfolio, with ease.
- The data load will be (and is) huge. No matter how big you are, your systems can crash. That could get nasty. Backups and redundancies aren’t necessarily cheap either, and actual runtime is an obvious issue.
- Platform security is not (and cannot be) a given. No platform will assume unlimited liability. Your high status NFT could be vandalized, stolen, etc. You may need to secure your virtual property.
A future with many possible advantages
Gloomy so far, right? To be strictly fair about this despite my many current doubts, things could get a lot better in the metaverse as well.
Current strengths can be strengthened:
A portable world isn’t such a bad idea by any logical standard.
You have a viable, realistically attainable place for yourself.
Virtual properties offer many options for the aesthetics and inclusions you want in your world,
You can control your interactions with the outside, including people.
People have always wanted secure private spaces. That could be the deciding factor for entering the metaverse. You don’t have too many problems living in a messy, toxic and dangerous physical world.
You can have much more control of everything, even on existential levels. You can “unbundle” your virtual world and keep it all to yourself by simply pressing an “exclude” function that closes everything else to keep things private and secure. (I’ll spare you a bit about “arbitrary spaces”, but it’s like set theory: no have be part of any other set. You can be your own set.)
Self-sufficient operating systems could also eliminate dependency on external needs.
It is only a matter of time before the tactile and sensory realities become involved. You should be able to fly a plane, dive, explore the universe, etc. within the reach of current technology, let alone the future.
It is also quite possible that many of the science fiction ideas will become viable. Why bother dying, when your digital self can simply set up your home in your preferred virtual environment?
Virtual existence can be virtualized to the point of not being dependent on physical systems. After all, you’re basically mixing electrons, in the physical and virtual worlds.
There is nothing even slightly unusual about any of this. There is nothing that can be undone about it, even in theory. The laws of physics don’t care either. You’re basically living in a set of equations anyway. (Well, if you insist on being electromagnetic, retro shy, you…)
Yes, you could even consider the possibility of life in other metaverses. How weird.
Virtual property is the extremely predictable and naturally behaving application of a future reality not evolved in many ways. Be cautious. Learn the environment. Don’t trust anything until you have a reason to trust it. It should be OK.