What is Virtual Land and How Does It Work?

Real estate is typically thought of as a wise investment. What about the virtual one?

These days, virtual real estate is sold as NFT in realistic Metaverse games, and this has sparked an enormous increase in the value of the economy worth billions of dollars.

Since the creation of the metaverse, which contained gold on the virtual hill, non-fungible tokens (NFTs), which are virtual land representatives, have gained a lot of attention. Millions of dollars are paid for some virtual lands.

The backbone of crypto-driven metaverse platforms like Decentraland and The Sandbox is virtual land. When a major player, like Meta, plans its own metaverse, it will then become a key point of distinction between the centralized and decentralized metaverses.

Due to the fierce competition among businesses to establish themselves as the dominant players of the future, the first thing that needs to be defined is what the metaverse is and how virtual land will be significant to its growth.

What is virtual land?

In the digital environment, also known as the metaverse, all virtual lands exist. In general, the metaverse is similar to a video game or digital life simulation in that you can interact with other players by using the avatar that represents yourself. The digital landscape, geography, and physical space that players can explore in the metaverse are collectively referred to as virtual land. It could be a two-dimensional simple environment with pixelated shapes, a three-dimensional white or black box that looks abstract, or a three-dimensional virtual environment with any objects you can think of, including mountains, oceans, and other objects.

How does virtual land work?

To begin with, virtual land does not require crypto. It was first introduced in many video games decades ago. Depending on how the metaverse is constructed, it can express the sensation of being "open" or "close." Many metaverses, like the first two "The Sims" games or VR Chat, will show the downloading screen when users switch between the various environments. Other metaverses, such as "World of Warcraft," can provide a more seamless world-exploring experience. Additionally, some people think that NFT technology and cryptocurrencies may hold the key to a metaverse that can truly collaborate and learn more about the world than ever before.

In Web 3.0, virtual spaces or assets are typically sold as NFTs, which means that proof of ownership is present in the blockchain, such as Ethereum. It functions basically as a title deed that grants access to and management of the specified space to its holders.

The Ethereum blockchain was slowed down by Otherdeed mints in April 2022 in order to collect data. Some users claimed that they had spent thousands of dollars on Ethereum gas fees in the hope that Otherdeed's NFT would reward them with valuable resources or rare creatures known as Koda.

How to buy virtual land?

Purchasing virtual land can be done in a variety of ways depending on the metaverse games and companies involved. You can buy virtual land in the secondary NFT market like OpenSea or convert it on the developer's website for sale as NFT.

What is special about virtual land?

Literally, the concept of virtual land has been around for a while. “The Sims" is a well-known example that was released 20 years ago. Its life simulation setting, where users can create their own characters, purchase virtual lands, construct homes, and truly feel like they are living a digital "life," is the reason it is so incredibly popular. Since then, there has been a follow-up to "The Sims" which was successful in three episodes with a virtual world that is somewhat more complex and open. But this game can only be played by one person.

Second Life, Habbo Hotel, and IMVU games all offered this service to those looking for an online multiplayer experience in virtual space. By personalizing their characters, they introduce a virtual universe where players can disappear into.

However, virtual land has only been established and offered for sale on closed platforms so far. Platforms do not exclusively provide value to users. Virtual land typically does not have a secondary market. Due to the origin of NFT and decentralized metaverse platforms, users now have the ability to buy and sell virtual property as well as transfer data between different metaverses.

The need for virtual land in the metaverse may be questioned by many people. The first response would be that the COVID-19 outbreak demonstrated how quickly a virtual meeting tool like Zoom can become obsolete. Those who have "Zoom Fatigue" may also feel uneasy using virtual reality (VR) or augmented reality (AR).

Digital ownership is becoming more significant as the internet becomes an increasingly vital component of people's lives in the modern era. Virtual land assets can be used as Digital Status Symbols, meeting places for friends from around the world, creative hubs, and a variety of other things. Some people think there are not enough technologies available right now to connect to the metaverse.

Virtual land-related tokens

Although Web 2.0 metaverse experiences like Robox did not use cryptocurrencies, the decentralized Web 3.0 metaverse platforms do use cryptocurrencies more frequently. For instance, Sandbox makes use of SAND Token, Decentraland of MANA, Otherside's metaverse of Apecoin (APE), and IMVU's virtual chat platform of VCOIN.

Generally, ERC-20 tokens, the digital currencies that are part of the Ethereum network, are used to refer to metaverse tokens that are connected to virtual land and economies.

Future of virtual land

Most of the virtual land marketplaces in 2022 were speculative. Other than that, there is no introduction to other markets because Meta does not learn about the vision of the metaverse, whereas the price of both The Sandbox's and Decentraland's tokens falls sharply.

While millions of people might flood into this expanding area, it is important to determine whether most Web 3.0 enthusiasts will actually use the virtual lands they purchase or only hope that their values will rise over time.

Some claim that the metaverse and virtual land are get-rich-quick schemes that demand little effort and pose no risk. Virtual land is just "futuristic hype," in the opinion of some “digital landlords.” Readers were questioned in February by Protocol about whether the speculation on virtual lands is "spoiling the promise" of the metaverse.

Tony Sheng, an Angel investor, and co-founder of Cozy Finance, believed that collecting land taxes on the properties that speculators own is an effective way to combat the speculation that destroys the virtual land economy. He argues that the metaverse's designers should not build it for speculators because doing so will end up resulting in recession rather than "value accrual." As time goes on, turning virtual land into a useful "productive asset" might increase in value.

The policies of the businesses regarding cryptocurrencies and NFT, which are still controversial in the video game industry, will determine the direction of virtual land in the future. When Minecraft announced in July that NFT is not permitted in the game server, the creator of NFT Worlds, who is an NFT metaverse designer on Minecraft by merging Polygon, experienced intense stimulation.

However, the future of virtual land continues to be of great interest. A serious effort is being made by companies like JP Morgan and Gucci to understand and succeed in the metaverse.

References

https://decrypt.co/resources/what-is-virtual-land-how-nfts-are-shaping-the-metaverse 

https://decrypt.co/resources/beginners-guide-to-nfts-how-to-mint-a-non-fungible-token-on-ethereum https://decrypt.co/108010/metaverse-nft-tokens-have-plummeted-this-week