The Metaverse & Real Estate: Part Two

Written by Breck Hapner

Read part one here

The metaverse is a fundamental digital revolution. There’s going to be a metaverse for every type of personal interest and business pursuit, including commercial real estate. It will democratize and increase access for participants to “own” their own reality. Taking the metaverse and actually applying it to real life is where the future lies.

New technologies, applications, and ways of thinking open unimagined vistas. As an online world, the metaverse is not completely defined as of yet. No one has settled on a single perspective, and there is a lot of experimentation occurring right now. As you might think, this causes much apprehension amongst investors.

Part two of this series will go beyond describing basic metaverse concepts. Part two will explain the mechanics of the metaverse, how they relate to building your business, and why it is still a good idea to invest in the metaverse.

``Real World`` Growing Pains

Aside from asking about the definition of the metaverse and how it can help with the buying and selling of real estate, we should probably deal with a couple of pressing issues. The first would be the fact that Mark Zuckerberg is laying off 13 percent of the Meta (Facebook) workforce. The second is the recent crash of the cryptocurrency markets. Many sources have recently stated that these incidents are proof that new metaverse digital technologies are worthless, and it would be foolish to keep investing in them. 

It seems that the metaverse is going through “growing pains.” History can certainly point out how many promising technologies were tried, and failed. But we are also reminded by how many new technologies irrevocably changed the world. Think about your PC or Mac, or the smartphone you hold in your hands. Consider the struggle and amount of funding that was required to bring these new technologies to the marketplace.

Zuckerberg has been the butt of many jokes in the last few years. Once valued at $3 trillion, Facebook/Meta is now worth a quarter of that. The reason? So many new platforms, like TikTok, have absorbed his user base, which formerly comprised the Meta user base. Facebook has been slipping in relevance for years, primarily because the younger, technology-savvy generation has abandoned it. Let’s face it –  it’s not “cool” to post on platforms used by your old mom and dad. However, Zuckerberg is no dummy. This explains his enormous investment into metaverse technologies, which can eventually assure him of top-dog standing in the digital world once again. 

The Crypto Market Crashes

The other concern, that I mentioned earlier, is the present volatility of the cryptocurrency markets. Because they are relatively new, they are susceptible to upheaval. Crypto is only experiencing what every market does during stressful economic times: fluctuations. Crypto markets are very small compared to “traditional” monetary systems, and are thus more vulnerable to instabilities which can undermine asset values. 

Does this mean cryptocurrency is a failure? No, it does not. Cryptocurrency promotes easy validation and buying/selling speed, while holding impressive digital security through blockchain. Crypto may eventually replace most forms of “money” we commonly use today. It will decentralize, removing many common financial institutions from power in economic marketplaces. Intermediaries will be removed. It will just be smart contracts and transactions, proven to be ultimately speedy and incredibly safe. 

Think of it this way: you used to be okay with waiting for days for your bank to process deposits and validate accounts so you can access and transfer funds. Now there are apps like Venmo and Zelle that allow you to securely send and receive money in the blink of an eye. If you have your choice, which one would you choose? Swift and surgical crypto may eventually replace all the dated, lugubrious financial systems and the millions of intermediaries all clawing for their cut of each transaction.

It is important to remember that blockchain and cryptocurrency are critical to working with and becoming a participant within the metaverse, so we will discuss these elements in some detail as well.

Your Pleasure Reading

That is a lot to consider. Lucky for you,  Haven already has provided some primers: “How Blockchain & Crypto will Transform Real Estate: Part One”  and part two. You’ve also read our “The Metaverse and Real Estate: Part One,” which provides a basic understanding of terminology. However, before we go any further, let’s again examine some pivotal metaverse concepts before we begin talking about the bigger picture, and how the metaverse will ultimately help you, and be the most important place you and your clients inhabit.

Why is the Metaverse Important?

Virtual worlds have always had a mystique and undeniable appeal. The metaverse became even more popular when the pandemic forced people to remain isolated. Outside of remote interactions using Google and Zoom, seeking engagement, going to events, and meeting people virtually took on a whole new meaning via the metaverse. Reconnecting with people and the population at-large became a priority.

What is the Metaverse?

The metaverse is a subset of Web3, a digital world where you can own the digital objects you have inside of it. The common adage you will hear in the crypto space is that Web1 is a “read” internet, meaning, you just read. Web2 emerged around the time the first social media platform got started. It is read and write, allowing people to contribute and help create the internet. Web3 is read, write, and own. The “own” part are cryptocurrencies like Bitcoin and Ethereum. Also included are NFTs (objects, avatars, etc.) and becoming a user/part-owner of these cryptocurrency networks and blockchains.

What is Blockchain & Crypto?

Blockchain is a technology based on a decentralized network that offers more control over what you do online. Bitcoin (a fungible token) leverages blockchain, a ledger which is not managed by any centralized party. Blockchain resides on a global network of computers that contain and track blockchain-based digital assets. Essentially, you cannot have crypto unless you have a blockchain.

Blockchain and cryptocurrency allow business to be conducted in an entirely new way: virtually. The internet has promised this with its various incarnations, but now, with the tools to work within Web3, crypto enthusiasts see a future where the internet runs on blockchain-based tokens. We are poised to enter a new realm of possibilities.

Why Buy ``Land`` in the Metaverse?

Decentraland was one of the first virtual realities that married crypto with the idea of a totally virtual space. The extra appeal of buying digital space via blockchain in the metaverse is that you can own the digital assets you input, and take them from world to world. The ownership aspect just makes it more real. Buying land in the metaverse is your first step to establishing a business presence, and enabling the ability to interact with other digital entities. And that land can become quite valuable. Virtual land purchased for $700 a year ago can now sell for upwards of $20K. 

The metaverse is all about events like real estate showings and walk-throughs, which provide inspiration and instruction. Buyers enter your sales funnel in a semi-qualified status out of the gate. Leads turn into prospects, which become sales.

Decentraland has an actual investor-pitch arena where people can connect with and present their business opportunities in front of interested investors. The cool thing is that other individuals not involved with the actual investor pitch can observe with their avatars, and if they choose, interact. This is a totally new way to show, and possibly sell property, such as a house.

What makes land more valuable is its proximity to where things are happening in the metaverse, such as where communities are being created, or places where people go to purchase things, attend events, be comfortable, and hang out. 

Real estate is already working to make its presence known by buying land and building “offices” in the metaverse. Real estate agents can host metaverse “events” where potential buyers and sellers can interact leveraging their avatars to present challenges, attend seminars, conduct business and buy/sell virtually. Agents can reach potentially thousands digitally, without leaving their office chair, by generating specialized NFTs for their metaverse office.

What are NFTs?

NFTs are currently seen as “the next big thing,” bringing both huge brands such as Adidas, Nike, Givenchy, and Gucci, and the “normal” folk to the metaverse.

A NFT (non-fungible token) is a unique digital object. Bitcoins are fungible with each other, meaning if you are going to purchase a bitcoin from someone or a crypto exchange, you will not say “I would rather have that bitcoin over this bitcoin.” You are going to accept any bitcoin, because they are all basically the same.

But because a NFT is a unique digital object, they are not like bitcoin. There are many other applications for NFTs such as storefront objects, video game pieces, music, domain names, tickets to events, social clubs, and of course, real estate.

Realtors and real estate companies are now buying and designing virtual land (such as Infinite World) and setting up offices in Decentraland and TCG World, so they can have not only a metaverse presence, but the ability to interact with others in the metaverse using their NFTs, which comprise everything from their agents to their services and solutions to the homes they are selling. 

Owning Your Reality

The metaverse is where all the “cool kids” and savvy brands will inevitably end up, and companies such as Meta know this. Talk about a huge audience, and think of all that data – advertisers from every continent marketing to the millions who will eventually inhabit the metaverse. That is why every business, especially the real estate business, needs to understand what the metaverse is, and more importantly, why it is a sound decision to invest in the metaverse now.

The metaverse will ultimately provide an evolution in human experience through superior interaction and communication. Moving forward, the metaverse will continue to fill with creators and users. There is going to be a metaverse for each kind of person, profession, service, and solution that addresses specific likes, tastes, wants, and needs of those seeking to own their own reality.

In the next part of our series, we will delineate how these digital elements are connected and applied  to the metaverse real estate experience.