We millennials may disagree on many things, but one thing which we all stand in unity on is “we need a getaway from the real world – without dying, that is!”
Considering that the current “escape from the real world into the real world isn’t helping”, tech geeks invented the Metaverse – an imaginary land in which people are apparently investing millions of dollars.
If you aren’t familiar with this concept, get ready to be blown away because this lecture will encompass all the facts on Metaverse explained simply. Further in this lecture, I will explain how people are investing in the virtual realm, how they are gaining from their investments in the digital world, and, more importantly, why they are investing in the imaginary world.
So, let’s get started with this lecture on Metaverse explained for dummies.
What is Metaverse?
So, what is all this Metaverse hype about?
I can’t say on behalf of anyone else, but my social media has recently been flooding with news on this cool virtual world where people are buying land like they do in the real world. This made me think I was missing out on something, so I started researching this digital space called Metaverse.
It turns out Metaverse is seemingly the next industrial revolution where people are shifting from the physical world to the digital world (like social media platforms including Facebook and Instagram didn’t do an excellent job at that already).
Now, if you are thinking, ‘does Mark Zuckerburg changing Facebook’s name to Meta have anything to do with it?’ it does – but it also doesn’t!
You see, Meta means ‘more comprehensive.’ So, when the founder of Facebook changed its name to ‘Meta,’ he aimed to invent a more comprehensive platform for people to sort of merge the lines between the physical and the digital worlds.
But Metaverse is an even more ‘meta’ (get it – as in more comprehensive) concept than Mark Zuckerburg’s Meta. Facebook has created a platform where people portray their physical selves in the digital space. But Metaverse is a realm where people dominate their digital selves over their physical selves.
You will be surprised to know the origins of the Metaverse. This virtual reality gained popularity from Neal Stephenson’s famous sci-fi novel ‘Snow Crash,’ where humans interact with other humans in the form of their avatars. I found it amusing to learn during my research that the concept of Metaverse was further implemented in Steven Spielberg’s 2018 hit and one of my favorite movies, Ready Player One, where humans compete for sole ownership of the OASIS – the movie’s Metaverse.
So, Metaverse explained simply is a virtual world where people can do everything they do in the physical world – go to school, watch TV, shop, play video games (even though it cracks me up imagining people playing virtual games in the virtual world). When they get tired of this virtual reality, they can tune back into the physical world and wind up our pending tasks if they feel like it.
Investing in the Metaverse
If you are thinking, ‘who would invest in a fake world,’ get ready to be shocked because someone recently invested 2.4 million dollars in Metaverse. This news kept me up all night because I thought when Metaverse is an imaginary world, which indicates that it is limitless, then why do people invest their real money in it?
So apparently, the land inside the Metaverse has pretty much all the facilities you get in the real world, except you can’t step foot on it (if that makes any sense).
You will be stunned to know what an insane amount of money people are spending for a hypothetical land – consider these stats, for example. Meta (Facebook) has invested $10 billion in Metaverse. The total investment in Metaverse in 2020 exceeded $46 billion.
So, here is why land in the digital world is more expensive than in the real world. Physical land depletes over time – its value decreases. But this concept does not apply to virtual land.
But then why are people spending this heck of an amount on something that they can’t even touch? A straightforward answer – speculation! After Meta’s (Facebook) investment in Metaverse, people have started guessing that its value would increase over time, just like digital currency like Bitcoin. I like to call it FOMO – people are assuming that they are missing out on something massive and would lose access to it on delay.
I had to further correct my thoughts after reading an article on the web that stated that Metaverse isn’t limitless. Two of the most dynamic Metaverse platforms, Sandbox and Decentraland, said that they would never expand their Metaverse.
Making money from Metaverse
This brings us to the next concept in this lecture of Metaverse explained for dummies. How can you get a return on your investment in Metaverse? Unless you are running a charity center where you would spend money without any worries on the return, you want to profit from your investment. Making money from Metaverse explained simply can be carried out in two ways:
In the short term, the most effective strategy of making money from this virtual land is by purchasing it, waiting for its value to rise and selling it at a profit, or locating a buyer who would want to buy it for a higher amount.
But the business-minded people will figure out a more profitable and consistent way to make money from this land. They will charge a fee against their property. For example, they will host live events in the virtual realm and charge an entry fee or rent your land to people to host their events.
But now, who would want to attend live events in Metaverse? It turns out, millions of people would! As a publicity stunt for the Metaverse developers, Justin Bieber hosted a free virtual concert in the Metaverse. It turns out, thousands of people tuned in to attend the virtual show because apparently, virtual concerts are the new normal in the Covid situation. This is one of the reasons why the net sales of Metaverse reached their peak in 2020 when the Covid struck.
And the options of earning through Metaverse don’t stop here! People who own land in the Metaverse will have the most excellent chances of generating profit from – drum rolls – video games. Yes! Who knew that Gen Z’s hours of determination in winning their favorite video games could pay off?
Many video games operate on the ‘play to earn’ concept. This means that whoever succeeds in the tournament wins a virtual award that has actual monetary worth behind it – pretty much like Bitcoin. Even though most of these games don’t have global recognition yet, they may reach the size of the ever-favorite Minecraft once the Metaverse takes off.
Who sells land in Metaverse
Who sells land in Metaverse? This is one of the few questions that haunt many people, like who sells islands to billionaires or who gave Elon Musk the right to sell land on Mars. But because I wanted to talk about Metaverse explained for dummies (just like me) I will be busting to you’re the not-so insider secret regarding who sells land in Metaverse.
Selling virtual plots of land in a Metaverse is the people’s authority who develop the specific Metaverse. Since there are multiple Metaverse manufacturers, some of which we discussed in this lecture before as well, they quote different prices for the land in their particular Metaverse.
Now people who purchase land in Metaverse usually buy it from either of these two developers: Sandbox or Decentraland. A little thought on why people prefer to purchase land in Metaverse from these two platforms: if you were to invest in crypto, which platform would you choose? BlockFi, Binance, Crypto.com? Why? Because they are the most dynamic crypto platforms, right. Here is your answer!
Again, the land they offer is in limited quantities. Sandbox only has 166,464 plots to offer, while there can only be 90,601 landowners in Decentraland.
Even though both these Metaverse developing agencies have vast patches of unsold land, these numbers would decrease considering that the current generation is enthralled by the idea of creating their own communities.
Buying land in the Sandbox or Decentraland Metaverse is nothing complicated. You simply have to locate the virtual land you like on the official websites and pay for them. You can also buy land from OpenSea marketplace because the land is actually NFT.
The future of Metaverse
This article about Metaverse explained for dummies covers not only the present but also the future of Metaverse. So, do you guys have any guesses regarding what the future of Metaverse would look like? I do – and it’s not just a wild guess but a fully backed study by experts. Industry experts predict that Metaverse will gain a market value of around $800 billion by the next three years.
Today, Decentraland and Axie Infinity are selling land in the Metaverse for more than $2 million, and the value would increase to God knows what amount. Crypto giant Grayscale predicts that the Metaverse will reach a net worth of $1 trillion in the upcoming years.
And it doesn’t end here! Metaverse’s growth in the world of virtual gaming is expected to rise to $400 billion by 2025. This means that it would experience an increase of 220 billion dollars compared to the latest survey in 2020, which reported $180 market worth of Metaverse in the video gaming industry.
Cons of investing in Metaverse
This discusses all the pros of investing in Metaverse. But with every pro, there is a con. What is the con of buying land in Metaverse, you ask? Not con, but cons! There are several risks of investing in the virtual realm.
Firstly, there is a potential risk of privacy and data breach. And ever since Facebook converted to Meta, these concerns have gained severity because, well, there is practically zero aspect of our lives that we haven’t publicized on Facebook.
Another significant drawback of investing in Metaverse is the technological addiction that it could entail. If anyone asked our parents whether or not we are addicted to our mobile phones, and they will present a one-hour report on just how addicted we are at present, there wouldn’t be a need to invest in Metaverse any longer.
The third major setback of buying land in Metaverse is the social disintegration that it could cause. Imagine six family members attending a single concert on their individual devices. It would be like inhabiting digital colonies while undermining the physical ones.
And this last risk is from an investor’s point of view: we don’t know how successful Metaverse would be. Do we get a positive outlook when we view the industry estimations – yes! But did we know there would be a pandemic outbreak in 2020 – no! So, do we know if the scenarios would change and Metaverse would experience a fall- also, no! So, it is best to inspect before you invest. See if someone you know is making money from their investment and if you witness it, only then should you invest your money in someone hypothetical.
The Bottom Line
This brings us to the final part of our lecture on Metaverse explained simply – whether you should invest in Metaverse or not. To put it simply, this is your choice. I am here to merely describe the concept of Metaverse to you and analyze its pros and cons.
In Metaverse’s defense, I would say that it has an enormous potential to transform our lifestyles, glimpses of which have been seen in the aftermath of the pandemic. However, at the time being, it is merely an idea that may or may not take off.
I would add that when the internet first took off, people had a gut feeling that it would be a success. But with crypto, there was a high chance of risk. The case of Metaverse is a mix of both. You have a gut feeling that the people investing in it will get a return, but you don’t know when because you definitely don’t see that happening anytime soon, so there is a risk.