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Ten things you need to know about the metaverse: The beginners guide

22 Jul 2022 10 Minute Read

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As technology continues to progress, the ways in which we transact, manage and use commercial real estate also changes. One area that may impact the future of real estate is the metaverse. The metaverse will reimagine what it means to be in-person or remote, with our presence spanning the boundaries of the physical and virtual worlds. This presents a transformative opportunity for real estate and its services.

For those new to the metaverse, we provide the top ten things you need to know:

1) What is the metaverse?

The Future of the Metaverse

Venturing into the Metaverse with Dr Jane Thomason, Author, Futurist and Award Winning Thought Leader in the world of Technology for Social Impact.

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The term metaverse was coined in Neal Stephenson 1992 novel, Snow Crash, where it referred to a 3D virtual world inhabited by avatars of real people. But now its transcended its science fiction backdrop and is a real thing.

In its simplest terms, you can view the metaverse not solely as the digital space, but the bridge between the physical and the digital experiences. It allows a sense of presence to span both the physical and multiple virtual worlds, at the same time.

2) What can you do in it?

Almost anything you can imagine. Largely stemming out of the gaming industry, the metaverse can be used for wide ranging practical applications for enhancing our physical and digital experiences, including education, concerts, sporting events and even for buying virtual land.

A business could use the technologies for a range of purposes. Digital office buildings could allow global collaboration, on-boarding of employees, and networking opportunities. It could be used for “face to face” customer services and sales. Learning and training environments could be created that reduce physical training costs.


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3) How do you access the metaverse?

Access to the metaverse can be through familiar technologies, using browsers or mobile apps. At present, the best way to access these fully immersive experiences is through augmented reality (AR), virtual reality (VR) or mixed reality headsets.

In the metaverse you are represented and communicate through an avatar. Once in, users can join the metaverse freely at any time, from anywhere in the world to play games, watch events or to buy virtual land.

4) How do you pay for items in the metaverse?

You pay for digital assets (land parcels or Non-Fungible Tokens (NFTs)) in the metaverse with digital money such as cryptocurrencies like Bitcoin, Ethereum, Solana and Polygon, which are basically encrypted data strings that denote a unit of currency. You keep your currency securely in your crypto wallet.

There are risks associated with purchasing cryptocurrencies that buyers should be careful of and should conduct their own research.

5) What is blockchain?

Blockchain is a type of distributed ledger. In other words, it is a shared database designed to record transactions or digital interactions.

Rather than a centralised system that has traditionally relied on human trust to verify interactions, entries must be confirmed and encrypted by a network. This allows entities to transfer data, money and assets directly, without the need for a middleman.

The blockchain is the enabling infrastructure for creating a fully secure and transparent economic ecosystem in the metaverse and thus a safe space for transactions like metaverse real estate.


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6) What are Non-Fungible Tokens (NFTs)?

A NFT is a unique and non-interchangeable unit of data stored on a blockchain. Serving as a digital one-of-a-kind certificate of authenticity, NFTs signify internet native property rights that can be bought and sold. As a result, this allows composability – the ability to combine and give new rights / access to owners.

Examples of NFTs include:

  • A unique digital artwork
  • A unique sneaker in a limited-run fashion line
  • An in-game item, a digital land
  • A ticket that provides you access to in-person / virtual events with corresponding perks
  • Land NFTs that provide an ownable piece of land in the metaverse

7) Who are the key players?

Just like the internet, no one owns the metaverse. Companies are still in the process of developing it. 

  • The big developers seeking to create and lead the metaverse experiences at scale are Meta, Microsoft, Apple, Epic Games and Roblox
  • The large platforms offering the chance to purchase, sell and rent land in the metaverse are The Sandbox, Decentraland and Axie Infinity

8) How do you purchase virtual land?

The most popular way to acquire virtual land (a land parcel) is via an NFT that represents a plot of virtual real estate. You can either develop the site yourself, hire virtual land developers to build it for you, or rent existing virtual land.

Consumers can either purchase a land parcel in one metaverse or across different metaverses (a portfolio type of approach) using the platform’s preferred cryptocurrency. As in the real world, the price of metaverse land can appreciate and depreciate in value, according to the normal principles of demand and supply. Depending on whether you are using the metaverse as a platform or for an experience, most platforms have an imposed restriction on space.

Alternatively, you can invest in the potential success of emerging metaverse platforms through purchasing individual shares or metaverse-specific index funds. Popular metaverse stocks include Meta, Microsoft, Unity Software and Autodesk.



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9) How can you create value from land in the metaverse?

The metaverse will alter existing business models and create new ones entirely. At present, you can develop productive assets or experiences on top of virtual land, as:

Events & Services

  • Building leisure venues for virtual social experiences such as concerts, trade shows, conferences, etc
  • Fashion and e-commerce companies are designing virtual shopping experiences or fashion shows

Education

  • Educators can build virtual rooms adjusted to their specific educational needs, enabling students to learn complex elements through 3D graphics

But also, metaverse properties can be used in innovative ways:

  • Developing virtual life science laboratories that in the physical world are extremely expensive to build, maintain and upgrade
  • The use of digital twins to create efficiencies
  • The medical profession can virtually operate, using digital twin technology, bringing the greatest global minds together to practice complex surgeries, and explore new innovations

Just like the real world there will be business opportunities for real estate developers, land and prime property traders, and for those offering property and facility management, leasing, valuation, etc. service lines too.

10) How is the metaverse regulated?

At present, a regulatory environment specific to the metaverse is largely absent and is currently being considered. However, the same laws apply in terms of disclosing paid endorsements, false advertising, patent and trademark infringement, providing giveaways and data privacy. Financial transactions are largely recorded in the blockchain and remain a permanent record, so have some form of security protection. However, the wider picture on consumer rights, health and safety, contracting, etc. is still very much in its infancy.

The metaverse provides the opportunity to explore and experiment with virtual real estate in a lower impact, cost, and effort environment than real life, where regulation often restricts innovation. However, there is a balance to be struck and a large question remains on the extent of protection required, and who should be the regulator to enforce this.





Further to understanding these basics, the fundamental question still remains: what does this mean for investors and occupiers – does it make good business sense? Because it is they who must ultimately make the decision of if and when to operate in it.

This is the first in a series of thought-provoking pieces on the metaverse, to help inform businesses on what it is and to support decision making. Our next blog explores what investors and occupiers may need to consider if choosing to purchase digital real estate – the potential rewards and risks.

 

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