What is Virtual Land? How NFTs Are Shaping the Metaverse
Posted on August 31, 2022
Real estate is often considered a good investment, but what about virtual real estate?
Non-fungible tokens (NFTs) representing virtual earth have been a hot topic since the advent of the metaverse – and they have gold in the digital hills, and some pieces of virtual earth are being sold for millions of dollars.
The virtual earth forms the backbone of crypto-enabled metaverse platforms like Decentraland and The Sandbox, and with big tech players like Meta developing plans for their own metaverses, it should be the key point of difference between centralized and decentralized metaverse offerings. .
As these competing visions of the future of the metaverse vie for space, the first step is to define what the metaverse is and what role the virtual earth will play in its development.
Table of Contents
What is virtual earth?
All virtual earth exists in the digital environment, also known as metaverse. The Metaverse is typically a video game or digital life simulation in which you can interact with other players using a character that represents you.
Thus, the virtual earth is a digital terrain – geographical and physical space – on which players can navigate through the metaverse.
The virtual earth can be as simple as a 2D pixelated environment, as abstract as white or black 3D space, or as a rich 3D virtual environment populated by oceans, mountains, and pretty much anything else you can imagine.
How does virtual earth work?
First, virtual lands do not require cryptocurrencies – many video games have offered virtual lands for decades. Depending on the design of a particular metaverse, the virtual earth can be “open” or “closed”. Many metaverses will display loading screens when players switch between environments, like in the first two The Sims games or in VR chat, while other metaverses like World of Warcraft offer a smoother open-world experience .
But some believe that cryptocurrencies and NFT technology could be the key to a truly interoperable and open metaverse.
AT Web3virtual property or spaces are usually traded as NFTs, which means that proof of ownership exists on a blockchain like Ethereum and essentially acts as a document granting the owner access and control over said land.
For example, in the upcoming Otherside metaverse from Yuga Labs, NFT Otherdeed are documents that provide owners with a piece of ownership in the virtual world.
Did you know?
In just 24 hours, Yuga Labs sold $561 million for the Mint Otherside NFT.
In April 2022, Otherdeed Mints Slowed Growth Ethereum bypass blockchain; In a desperate rush to claim their virtual land, some users have reported paying thousands of dollars for Ethereum gas in the hope that their Otherdeed NFT will provide them with precious resources or an ultra-rare creature called Koda.
How to buy virtual land
While the process for purchasing virtual land can vary greatly depending on the game and the company behind each metaverse, virtual land parcels sold as NFTs can either be created on the developer’s website (primary sale) or purchased from an NFT secondary market such as like Opensea.
What is so special about virtual land?
It is worth noting that the virtual earth as a concept has existed for some time. Released over 20 years ago, The Sims became a hit with its life simulation environment, where players could create characters, buy virtual land, build houses, and effectively live a digital “life”. It has since spawned three successful sequels with increasingly complex and open virtual worlds, but they are all single-player games.
For those looking for an online multiplayer experience with virtual earth, Second Life, Habbo Hotel, and IMVU have been around for a while now. All games offer some sort of alternate digital reality where players can escape to another world as an individual character of their choice.
However, today virtual lands are created and sold on closed platforms, with all the value coming from the platform itself, and not from users. In most cases, secondary markets for virtual land do not exist. With the advent of NFTs and decentralized metaverse platforms, users can now have true ownership of virtual land, including the right to sell it and even move it between different metaverses.
But why do we need a virtual earth in the metaverse at all? Well, for one thing, the pandemic has shown people that virtual meeting spaces like Zoom can quickly become obsolete, and virtual reality (VR) or augmented reality (AR) environments can shake up those who are tired of Zoom.
And as the Internet becomes more and more an integral part of the life of a modern person, digital property also becomes more and more important. Assets such as virtual earth can be used as digital status symbols, hangouts with friends around the world, or creative hubs. The possibilities are endless.
However, some believe that the technology is not quite ready yet.
What tokens are associated with virtual land?
While some Web2 metaverses, such as Roblox, do not use cryptocurrency, a growing number of decentralized Web3 metaverse platforms do. The sandbox uses the SAND token, Decentraland uses MANA, the Otherside metaverse will use Apecoin (APE), and the virtual chat platform IMVU offers VCOIN, just to name a few.
As a rule, metaverse tokens associated with virtual lands and their economy, ERK-20 tokens, that is, these are cryptocurrencies that exist in the Ethereum network.
Future of virtual earth
In 2022, the virtual land market will be largely speculative. Otherside has yet to be released, Meta has yet to realize its vision for the metaverse, and The Sandbox and Decentraland have dropped their token prices significantly.
While millions of Web3 enthusiasts may have been invested in this growing space, it remains to be seen whether the majority of Web3 enthusiasts use virtual land they buy or simply hold onto in the hope that its value will increase over time.
Some argue that the metaverse and its virtual lands are essentially an overpriced get-rich-quick scheme. One “digital landlord” told Vice that, in his opinion, the virtual earth was nothing more than “futuristic hype”. And in February Protocol asked his readers if all this virtual earth speculation really “spoils the promises” of the metaverse.
But others see the potential. Angel investor and Cozy Finance co-founder Tony Sheng sees taxing unused land owned by speculators as a potential solution to the speculation epidemic that has gripped the virtual land economy.
Sheng argues that the creators of the metaverse should not design for speculators because this will not lead to long-term “accumulation of value” and will result in an obsolete economy. However, turning virtual land into “productive assets” that are actually used can increase its value over time.
The future of virtual earth will also depend on the company’s policies regarding crypto and NFT, which remain controversial in the video game industry. The creators of NFT Worlds who built the NFT metaverse in Minecraft with Polygon integration – received a sharp alarm when Minecraft announced in July that it would not allow NFTs on its game servers.
Despite this, interest in the future of the virtual earth is still strong, with companies from JP Morgan to Gucci creating their own corner of the metaverse.
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