The Metaverse and Real Estate: Part One

Written by Breck Hapner

What is the metaverse and what has it got to do with contemporary real estate? These are good questions, not because they reference trending topics, but because they point to a quest to expand our horizons.

We have always been builders and explorers, happy when creating, investigating, and learning new things. We are constantly wondering what is beyond the next turn, what exists above and below the periphery of our imagination and vision.

To our credit, these qualities have made us capable of harnessing technologies once thought to be impossible, or in the least, unlikely.

One of these “unlikely technologies” rapidly gaining prominence is the metaverse, which can be simply defined as a virtual world, but more succinctly defined as a new way to experience reality and conduct business.

A New Era of Digital Change

The possibilities for real estate growth using the metaverse are enormous. The technology now being used to develop and populate new digital regions is transforming old methodologies. We are now exploring new territories, constructing digital worlds of virtual and augmented reality built on the blockchain.

The metaverse will revolutionize all aspects of our lives, generating new ways for businesses to interact with customers. It will also allow real estate companies to build new physical and virtual realities to provide digitally-augmented products and services. The metaverse will change the way current CRE operations are marketed, distributed, bought, sold, and experienced.

So, What is the Metaverse, Anyway?

The metaverse is an online arena bringing together virtual reality (VR) and augmented reality (AR) with digital facsimiles or “avatars” people use to communicate, perform tasks, and build out a community.

The metaverse can be seen as the next generation of internet that functions beyond reading and browsing (Web 1.0), along with interacting, engaging, transacting, and sharing images/video (Web 2.0). The metaverse allows immersion into a virtual space that mimics the physical world with a feeling of “presence” (Web 3.0). Users “live within” the metaverse, and have more control over their interactions and personal data.

For many, there is a temptation to think about the metaverse as some kind of singularity, so don’t. To make it easy, consider the current internet, a collection of entities that are accessed through a URL depending upon need, want, task, etc. If a user wants to access Facebook, the user goes to Facebook. If a user wants to go to Amazon, the user goes to Amazon, and so on. Obviously, then, Facebook and Amazon are on the internet but don’t comprise the internet.

The metaverse is being “constructed” and leveraged through digital devices via billions of computers and millions of servers. The metaverse builds upon what cyberspace already offers, but in a different way, through specific digital meta-channels such as Epic, Roblox, Fortnite, etc. that allows unlimited users to have shared real-time interactions, experienced synchronously across any distance.

So, the current set of metaverse worlds each has their own access, avatars, interactions, and currencies, linked by the immersive virtual reality experience. Meta and Microsoft, for instance, are both working on centralizing metaverse infrastructure technologies, but evidenced by Nvidia, Unity, and Snap, they aren’t the only companies and startups getting into the simulacrum game.

Mark Zuckerberg described the metaverse as “an embodied internet” where users can have “different experiences that you couldn’t necessarily do on a two-dimensional app or webpage.” Well, that’s for sure. But the metaverse is still somewhat novel, offering many intriguing opportunities amidst many challenges.

The metaverse creates a continuum that removes the physical limitations involved with digital access. This allows the user to become a part of an ambient reality through avatars interacting with other participants in a virtually rendered environment to build, play, shop, and work. The result is essentially a contiguous, integrated three-dimensional world.

Metaverse: The Next Digital World?

As mentioned, a quantifiable characteristic of the metaverse is the sensation of being “inside” a space, inhabiting different places with other participants in an entirely virtual landscape.  Users are transported from a physical ecosystem into a virtual network of mixed reality environments. This expansive hyperreality system supports identities, objects, histories, payments, and entitlements.

The metaverse enhances digital connecting and doing in a virtual format. The major difference is how the interaction occurs. The metaverse also allows users to fully own virtual objects, experiences, or land.

Of course, keep in mind that “building new worlds” means that everything under the sun and stars can be represented in the metaverse (including various forms of “land” and “real estate”), and every piece, part, and amalgamation represented can be bought and sold, using (you guessed it) cryptocurrency.

Most economic metaverse assets are “fungible” which means they hold “value,” and you can buy/own an entire entity, or just a piece of it. Blockchain makes it possible to precisely define a virtual thing so that it can be bought or sold. So, leveraging blockchain, metaverse goods and services may be purchased using cryptocurrency.

In contrast, non-fungible tokens (NFTs) are unique digital assets that store data that cannot be traded or exchanged at equivalency. Instead of currency, a NFT can be used as a certificate to record ownership of virtual goods and/or objects. NFTs can create a deed of possession, receipts for transactions, and can represent anything from a piece of art to an avatar to digital real estate.

Realtors, please take note: virtual land, in particular, is important to acquire in order to build not only your brand’s presence, but all the structures to commence doing business in the metaverse.

To provide an example, if your realty agency owns land in the metaverse, a user can “enter” your digital storefront using an avatar, and virtually “meet” an agent to discuss a venture or set into motion plans to make a purchase.

Can you imagine that?

Well, get in the game. Case in point, the Metaverse Group (​​https://metaverse.properties) is a virtual real estate company that acts as an agent to facilitate the purchase of land, commercial properties, family homes, business storefronts, etc. in virtual metaverse arenas such as Decentraland, Sandbox, Somnium, and Upland. That virtual property is already up for grabs, and is being sold quickly for incredible amounts.

With the acquisition of land, positioning is very important in the metaverse. It is too soon to tell what risks may be involved and what kind of overall performance companies can expect, but what is certain is the current popularity of the metaverse with key buyer demographics. These are the people looking to invest in property, both physical and virtual.

That being said, innovative companies that leverage the metaverse will likely perform better than those brands that shun the possibilities offered by the new technology, thereby delivering dividends to investors. So, put on your headset and get online.

The Future of the Metaverse & Real Estate

Whew! Well, that’s a good start.

At the present time, the metaverse is still in its infancy. Tech firms are still in the process of creating standardized architectures and software to power the many twists and turns in the metaverse.

These incongruities are brought by interaction with virtual, mixed, and augmented reality functioning within a commensurate virtual economy. Experts and companies keen to become metaverse authorities admit there are many challenges ahead, but all state the future is bright (and lucrative).

Even though the metaverse is relatively new, businesses should act soon. Follow the “Success 101” rule: Companies must think ahead and be willing to implement innovative strategic technologies in order to remain competitive.

That being said, we are here to guide you. The metaverse is set to inevitably disrupt and transform all industries. One thing is sure: the virtual selling environment for realtors, agencies, and CRE is never going to be the same.

Ready, player one.

Stay tuned to Haven to learn more about the metaverse and how it will affect real estate.

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