Johnny McCamley has spent nearly £5,000 on land.
But he cannot physically walk on this earth, and he cannot live on it or build a house on it.
That’s because the 23-year-old’s investment is in the metaverse, meaning his earth is entirely virtual and exists solely within a digital world.
Mr. McCamley, from Belfast, is one of many people who have decided to buy virtual property in the metaverse.
Last year, virtual land transactions reached $350m (£267m) on The Sandbox, the largest digital property platform, according to a report from the Center for Finance, Technology and Entrepreneurship.
An additional $110m (£84.2m) worth of transactions were made on Decentraland, the second largest metaverse platform.
What is the metaverse?
The metaverse is not a single digital space. It is a network of virtual reality worlds, created by companies and platforms, where users can interact, play games, attend events and buy land.
A better known metaverse is Horizon Worlds. It has been created by Facebook, which has now changed its name to Meta as the tech giant shifts its focus to virtual spaces.
Other brands have also announced their own digital kingdoms.
Manchester City plans to build the first football stadium in the metaverse in partnership with Sony.
McCamley, CEO of CryptoClear, bought his plot in The Sandbox last October. He said: “There are casinos in the metaverse, there are also museums, but there are also events like podcasts and also conferences that I’ve actually been to. So the best way to look at it is by taking the real world and really digitizing it way beyond the Likes Zoom”.
Why do people buy virtual property?
For McCamley, the chance to stake a claim in this imaginary world was an opportunity not to be missed, even though market uncertainty and price volatility made it a risky investment.
“It’s like any new investment, any new asset class. When I got into Bitcoin when it was $300, I was told it was extremely risky, same with Ether at $4. I think getting a piece of Decentraland for $4,000 is an absolute gamble.” bargain,” she said.
He intends to hold onto his purchase for 10 years: “I think the metaverse will mature in about a decade and I’ll think about selling the land when that time comes.”
Owners can also use their virtual spaces to design experiences for others to enjoy.
“Community-owned land is my favorite. A very, very good example is I think it’s a ‘gecko beach’ that somebody has done and as you can guess, it’s a beach full of geckos.” Mr. McCamley said.
House-hunting in the virtual world
Searching for the perfect home in the metaverse is similar to real life.
Land along highways and near desirable districts such as “fashion” areas or “museums” will command a higher price and are more attractive investment opportunities.
In The Sandbox, the busier central areas near other landmarks are much more expensive than the newer neighborhoods on the outskirts.
Who your neighbors are will also affect the value of your property.
In September 2021, rapper Snoop Dogg announced his own digital “Snoopverse” on The Sandbox.
Two months later, a property next to his land sold for more than $450,000 (£350,000).
But, unlike traditional property purchases, there is no third party or legal presence that can guarantee that the transactions are legitimate.
This can be risky when buying from a secondary market like OpenSea, where purchases are made with cryptocurrencies.
Why are people building virtual property?
In addition to landowners, there is a new generation of “meta-architects” designing virtual spaces.
Stavros Zachariades is a traditional architect working in South London, but he started designing for the digital world during the pandemic after his brother Adonis founded Renovi, an NFT marketplace.
The 37-year-old recently designed pop-up stores for metaverse fashion week.
“The draw of the metaverse and the construction in the metaverse is [people and businesses] can show what it’s all about,” Zachariades said.
“They can show their products. We can offer meeting spaces for different people, especially now with COVID and the last two years of more remote people.
“You can have, from super sci-fi realms, floating buildings that spin and transform, and on the other side of the realm, historic and classic architectural styles.”
He believes the metaverse could open doors to those who lack connectivity in real life: “I was thinking about how accessibility can change, for example, someone who doesn’t have the same mobility can be an equal in the metaverse. Why? not? “
“It is simply impossible to know what the end of the game is”
But many warn that these investments could fail.
Birmingham-based YouTuber “Mitch Investing” regularly delves into topics like personal finance and emerging technology on his channel.
He thinks that the promises of the metaverse becoming part of our daily lives may be exaggerated.
“It’s so early in its development that it would be like investing in a company that’s only been in business for a year. You’re not sure if it’s going to take off or not, you’re not quite sure where the business is going, not too sure how could develop the business model… in my opinion, it is very speculative,” said the 26-year-old.
There is concern that not all virtual worlds manage to attract a large enough number of users.
“There could be thousands of metaverses like there are websites today. It’s just impossible to know what the endgame is,” he warned.
Risk and volatility
The Financial Conduct Authority labeled crypto assets “very high risk speculative investments” and warned that people who trade in them must be prepared to lose all their money.
There are also broader concerns about user safety in terms of online harm.
The recently introduced online security bill will take into account activity in the metaverse, and companies will need to take action if their users commit fraud, including those in virtual reality spaces.