How to use real estate in the Metaverse

[Santhoshzak]

The Metaverse is a virtual world beyond the real world, in which it is possible to interact with others, buy and sell goods, etc. In recent years, such a metaverse has come to be used in real estate transactions.

This article provides an overview of the Metaverse and details how it is used in real estate transactions.

What is the concept of the Metaverse?​

The Metaverse is a new concept that has been attracting attention in recent years that allows you to experience a world that you have never experienced before. In October 2021, the world’s leading IT company “Facebook” will change its company name to “meta” and is attracting attention so much that it will shift its main business from SNS to Metaverse.

Another point worth noting is the rapid expansion of the metaverse market. Even in Japan, the size of the Metaverse market is growing remarkably. According to a report released by Mitsubishi Research Institute in November 2022, the domestic metaverse market is expected to grow to approximately 4 trillion yen in 2025 and approximately 24 trillion yen in 2030. increase.

Metaverse overview

The Metaverse is simply a virtual world that does not exist in the real world. Metaverse is written in English as ``metaverse’’, ``meta’’ means ``over’’ in Japanese, and ``verse’’ is taken from ``universe’’, which means the world. From this etymology, the metaverse can be interpreted as “beyond the real world”.

You can experience the world of the Metaverse on your computer, smartphone, game console, etc. For example, the virtual world that can be experienced in games such as “Atsume Animal Crossing” and “Fort Knight” is also a kind of metaverse. In these games, you can experience simulated interactions with other people that differ from the real world.

There is a word “VR” that is related to the Metaverse, but they are similar but different. Specifically, Metaverse refers to the virtual space itself, while VR refers to “tools for experiencing the virtual world” such as goggles.

What can you do in the Metaverse world?

In the Metaverse world, you can specifically do the following:

• Communication: You can communicate with other users by chat or voice, and you can interact with them in a more realistic way by using avatars. It is used not only for hobby communication, but also for practical purposes such as business meetings.
• Games: Metaverse technology is also used in games. Currently, VR devices such as “PSVR” and “MetaQuest2” are coming out, and you can enjoy games with more reality.
• Urban development: By applying Metaverse technology to urban development, more realistic urban planning is possible. There are actually virtual cities such as “Virtual Shibuya” and “Virtual Osaka”.
• Buying and Selling Things: You can buy and sell things by bringing digital assets into the Metaverse world. Currently, the digital art “NFT” is increasing in value, and there are many cases where it is bought and sold in the Metaverse world.

Features of the Metaverse

In the past, it was possible to create an avatar and move it around a two-dimensional world to do things like the above. However, there is a big difference from the metaverse. The features unique to Metaverse are as follows.

[Features of Metaverse]

• Overwhelming reality and immersion
• Communicate with multiple users
• A world that is permanent, not temporary
• Ownership of things in the virtual world is clear

In other words, the progress of Metaverse technology has made the virtual space overwhelmingly more realistic than before. It may be easy to understand if you think of the image of another world existing in parallel with the real world.

In particular, the clarification of ownership of things in the virtual world has greatly contributed to the development of the Metaverse. The reason why the ownership of things in the virtual world has become clear is that it has become possible to distinguish between copies and originals of things like data that can be easily duplicated.

In other words, only the original will have value, so the value is guaranteed. As a result, real estate transactions on the Metaverse have become possible in urban development.

How the Metaverse works​

As a reason for the development of the Metaverse, he cited the clarification of ownership of things in the virtual world. As a result, the ability to buy and sell goods in the Metaverse world is the mechanism that establishes the Metaverse.

NFTs are often bought and sold in the Metaverse. NFTs are digital assets whose value is secured by utilizing blockchain technology, such as digital art and in-game items. Blockchain refers to a mechanism that makes falsification extremely difficult and allows multiple people to hold the same data in a distributed manner.

With these technologies, the value of digital assets has been secured, so you can buy and sell things with confidence even in the virtual world.

Real Estate Transactions in the Metaverse

So far, I have explained that the Metaverse is a virtual space, but there are various types of Metaverses. The main types of metaverses are:

• Event type: Not only for idols and celebrities, but also for company product introductions and recruitment activities.
• Game system: You can experience the world of famous games as it is in the Metaverse
• Creator type: Freely create your favorite space and items, and enjoy it with others

The metaverse is also increasingly being used for real estate transactions. However, please note that not all Metaverses allow real estate transactions.

How to buy Metaverse real estate

Examples of metaverses that allow real estate transactions are:

• The sandbox
• Decentralized
• Cryptovoxels
• Dream Space

The above four Metaverses are also called “Metaverse BIG4”.

Virtual currency is required to purchase real estate on the Metaverse. Virtual currency refers to property value that can be used on the Internet.

The procedure for purchasing real estate in Metaverse is as follows.

1. If you do not have a virtual currency account, open one (an account of a famous company such as Coincheck is acceptable)
2. Create a Metamask (like a wallet or vault for storing cryptocurrencies and land)
3. Send virtual currency purchased using a virtual currency account to Metamask
4. Create a metaverse platform account
5. Find and buy properties in the Metaverse

What you can do with Metaverse real estate

By acquiring real estate on the Metaverse, you can:

• buying and selling
• rent
• Store operation
• Holding an event

Let’s take a closer look at each.

Buying and selling real estate​

Metaverse real estate trading is done using virtual currency, so you have to prepare virtual currency first.

In the world of the Metaverse, you can make a profit by buying real estate at a low price and selling it at a high price. These are exactly the same as real-world real estate transactions. Therefore, if you are familiar with real estate transactions in the real world, you will have no problem trading on the Metaverse.

An example of real estate trading in the Metaverse is the Canadian IT company TerraZero. TerraZero provided Metaverse Mortgages, a mortgage loan for those who purchase virtual real estate in the Metaverse.

Real Estate Rental​

The method of renting real estate on the metaverse is the same as real world real estate. In other words, you search for tenants in the real estate you own on the metaverse. By leasing real estate on the Metaverse, there is no need to set up a physical store, which can lead to significant cost reductions.

Summary​

Metaverse is a virtual space and service that provides an experience close to the real world. It has also come to be used in real estate transactions, and its market scale is expanding rapidly. If you get into the Metaverse real estate deal now, you may be able to capitalize on this tremendous bandwagon.