Savvy investors are always on the lookout for the next big thing. Where can they park their money to earn the highest returns? In the 2000s, it was Dot Com stocks. In the mid-2000s, it was real estate financed with cheap loans. For the last decade, it was mainly tech stocks. Now, it’s looking like the next big thing is digital real estate investing. But wait a minute. Two of the scenarios that I just mentioned turned out to be massive bubbles. In 2000 and 2008, tons of investors got burned. Is digital real estate investing a similar bubble that you should avoid at all costs? Or will you be kicking yourself in 10 years for not buying more digital land today?
For years, the digital realm has been expanding rapidly. These days, we’ve grown accustomed to billion-dollar companies built around nothing more than a website. Even though they have no real-world assets, these lofty valuations make sense to us. Online companies perform crucial functions in society. Now, it looks like the digital world is going one step further and morphing into something called the metaverse. Just like the real world, the metaverse has its own real estate.
This article will unpack everything you need to know about digital real estate investing.
What Is Digital Real Estate?
Digital real estate is often considered a subset of digital assets. A digital asset is anything that exists online and has value. Traditionally, people consider things such as domain names, social media accounts or popular websites as digital assets. For example, owning a popular domain name like Hotels.com is incredibly valuable. Hotels.com is super easy for consumers to remember and search for. This can help it rank high in search engines, which gives the owner more exposure. Its simplicity makes it more valuable than complicated domain names.
Other websites, such as Facebook.com, have tons of data and assets attached to them. They are valuable because of the business that runs them. However, digital assets have evolved into much more than just websites or apps.
Now, with digital real estate investing, people can literally own digital blocks of real estate in virtual worlds. These blocks of land exist on blockchain technology. For example, let’s say that Justin Bieber hosts a digital concert (which he has). In theory, someone can own the arena where he’s singing. If you start charging people admission to this arena, it becomes no different than owning Wrigley Field.
Keep in mind that the metaverse is still very much in its early stages. To enter the metaverse, you just put on a pair of VR glasses, create an avatar, and visit a digital world. From here, …….