What determines price is the interaction between supply and demand. Since a metaverse - or really anything or anyone, for that matter - can create a token, the question becomes whether these tokens have value or are a digital equivalent of monopoly money. Does Digital Real Estate Have Any Real Value? As this land is unique, as well as verifiable on the blockchain, it can be bought or sold. So, within our virtual world, an acre of land can be turned into an NFT. Where do non-fungible tokens (NFTs) come into play here within digital real estate?Īn NFT is a token that represents something unique that is verifiable on the blockchain. In fact, at the time this article was published, Decentraland’s token had a total market value of nearly $1.8 billion. The largest virtual plot inside of the virtual world Decentraland just sold for nearly $1 million. After all, how much can land in virtual worlds really be worth? It turns out quite a lot. And, since it’s on the blockchain, all this can happen in a secure way without a third party.įor someone new to blockchain technology, this may seem insignificant. This then enables me to buy and sell that land with that metaverse’s native currency. My ownership of the land can be verified on the blockchain. The metaverse can create its own token, which acts as a unit of value. This transaction was executed via a smart contract on the Ethereum blockchain.īack to digital real estate: let’s say I own land in a virtual world, also known as a metaverse. In return, Dinwiddle received cash up-front. Since NBA contracts are guaranteed, the nine investors who purchased a share of Dinwiddle’s contract received their principal plus interest back over a three-year period. For example, NBA Player Spencer Dinwiddie tokenized his contract with the Brooklyn Nets, selling shares for $150,000 each. But anything that has a value can be tokenized. The most popular and widely-known tokens are cryptocurrencies like Bitcoin and Ethereum. Think of a token as simply a unit of value that can be exchanged between two people. What blockchain technology also creates is the ability for someone to tokenize an asset. Smart contracts living on the blockchain make it possible for two people to conduct a transaction online without an intermediary third party (like a bank) for the first time ever. Once smart contracts are created, there’s no way to change them. These contract transactions execute automatically once certain conditions are met. Stored on the blockchain are smart contracts. Think of blockchain as a type of digital ledger, where all transactions and data entries are recorded and available for everyone to see.īlockchain technology builds trust and transparency between buyer and seller since everyone with access to the blockchain has an equal opportunity of seeing the ins and outs of a transaction. One of the major breakthroughs to happen with digital real estate in the past few years is the widespread emergence of blockchain technology. In this article, we’ll look at how we got here, how big this opportunity is and where to start investing. Thanks to blockchain technology, the market for digital real estate exploded with the massive growth of cryptocurrencies, NFTs and metaverses. Over the coming years, more digital asset types came to fall under the umbrella of digital real estate investing, including blogs, apps and social media accounts. For example, the domain name sold for $872 million. It was a once-in-a-lifetime opportunity, as many early adopters made thousands of times their initial investment. In the 1990s, the big opportunity was buying and selling domain names. However, the types of assets that make up digital real estate certainly have changed. This definition hasn’t changed since the internet first emerged. Like other assets, it can be bought and sold.
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