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You may have noticed that the sales of virtual properties have been increasing rapidly.
It’s ever since the digital asset space has come into the limelight.
Even big brands like Adidas and JPMorgan, as well as regular people, are investing in “imaginary” land in the Metaverse despite the uncertainty in the market.
You can’t physically walk on it or construct a house, but these plots of digital land are selling for thousands of dollars.
Mark Cuban, the owner of the Dallas Mavericks and a successful investor, believes that buying land in virtual worlds (Metaverse) is a bad idea.
He believes people should only buy real estate for practical reasons, such as needing a place to live.
And most of the reason land is a valuable investment is its limited availability.
The value of digital assets in the Web3 space, such as virtual land, is currently speculative.
Digital space is infinite, and companies like Sandbox can create more land anytime.
It raises questions about the value proposition for investors when companies can artificially create scarcity and competitors can easily create more land.
The value of digital land may not be in the land itself but in the access it provides to a community.
Mark Cuban suggests that companies should focus on building communities before selling land, as this creates a value proposition of access to that community.
Land of sales without a community is not a wise investment strategy.
Cuban is a technologist and crypto investor, and he’s now calling the purchase of land in the Metaverse “the dumbest s — — ever”.
He’s an investor in Yuga Labs, which owns Crypto Punks and Bored Ape Yacht Club, the most popular NFT collection by sale volume.
Bored Ape Yacht Club has recently sold digital land plots.
Mark Cuban — Source
“It was great money for them, but that wasn’t based on utility.
Real estate is valuable in the physical world because the land is scarce. However, that scarcity doesn’t necessarily apply to the Metaverse.
In these virtual worlds, there are unlimited volumes that you can create.
The worst part is that people are buying real estate in these places.
“That’s just the dumbest shit ever.”
Gary Vaynerchuck — (Garyvee)
He has some thoughts on virtual real estate in the Metaverse.
He’s noticed that many people are investing in it, even though it’s still far from reaching its full potential.
Vaynerchuck reminds you to be careful when investing in the Metaverse and suggests that waiting until people spend a lot more time in VR before investing is a good idea.
He says not to put all your eggs in one basket by betting everything on the Metaverse to make money, as it may be too risky given how early we are.
Garyvee — Source
“I think the most interesting conversation is how many people are investing in the Metaverse when the Metaverse is very far away.
When people are buying up land in a lot of places, I caution them, not that it’s a bad idea, Sandbox and Decentraland are great operators, and there’s a lot of good stuff going on.
But for me, it’s timing.
I’ve got to see 100,000 or a million people daily spending at least three hours a day in VR before considering it an investment.
Betting the farm on it to get consumer money from it will be dangerous.
Do I believe a ‘Ready Player One’ life is possible?
I sure do, but we have a long way to go.”
Final Thoughts.
People spending money on virtual real estate in the Metaverse is hard to wrap your head around, but Mark Cuban and Garyvee make a good point when you think about it.
The value of virtual real estate in the Metaverse is speculation, with no intrinsic value like in traditional real estate.
I get it. We’re all moving further into a digitally immersive world, but it’s a long way off.
The fact that there’s an unlimited amount of virtual land that can be created in the Metaverse makes it hard to understand why anyone would want to invest in it.
But, it’s worth noting that Mark Cuban has invested in Yuga Labs, which owns Bored Ape Yacht Club, which had a land sale that raised $317 million.
So, he, too, is indirectly invested in Metaverse real estate. Even though he says it’s dumb.
I’m bullish on the Metaverse even though we’re at least five years away from any practical applications for it in the future.
This article is for informational purposes only; it should not be considered financial, tax or legal advice. You can consult a financial professional before making any significant financial decisions.
This article is for informational purposes only; it should not be considered financial, tax or legal advice. You can consult a financial professional before making any significant financial decisions.