The Metaverse is Here

Life is not a problem to be solved, but a reality to be experienced

Soren Kierkegaard

You may have missed this piece of information on the internet, but it turns out that a house on Mars was sold for five hundred thousand dollars.

To be clear, this house on Mars is actually in the metaverse and not in our material universe. If you were wondering, after all the news of Facebook changing its name to Meta and spending billions of dollars on the metaverse, how individuals or businesses can make money on the metaverse, this is one great example of how. Designer and artist Krista Kim built this digital property and sold it online to the buyer who will use it to have the first metaverse wedding.

This is not an isolated example, however, of metaverse buying. Republic Realm, an investment company that focuses on metaverse and NFT purchases, bought $4.3 million worth of land inside a video game called The Sandbox, where people can “build out” the metaverse.

Not just for the Rich…

A different virtual world called SuperWorld has already had success selling thousands of properties, including virtual versions of landmarks such as the Pyramids of Giza. Average sales prices for these properties were $2,000. Anyone who thought that the metaverse was just going to be a virtual playground for the super-rich didn’t seem to realize that it’s not just the rich who are the target of the developing universe, it’s you.

Properties can be limitless in the metaverse. Companies don’t need to worry about scarcity in the metaverse. Scarcity is the first problem of economics, as CEO Alex Urpí likes to say. It’s the 101 that drives everything in economics; there simply aren’t as many things in the economy as there are people who want to buy those things. We created a value system by bartering and then using money, a medium of exchange, so that the transactions of things could be smoother.

“The world of reality has its limits; the world of imagination is boundless.”

Jean-Jacques Rousseau

But that doesn’t apply in the metaverse. There can be an infinite number of Pyramids of Giza. It all depends on the developer’s wishes and desires and how scarce they intentionally want to make these goods to drive up value and price.

One question that has not yet been answered is if, like cryptocurrency, the metaverse buying craze is only symptomatic of the desire to invest in things that investors speculate will increase in value or if there is an underlying utility to these goods.

Let’s take a moment to unpack that sentence. If investors are buying metaverse real estate simply because they think they can sell it for more tomorrow, and not because the underlying value of the real estate will be higher tomorrow, that is speculation buying. It’s a signal that the investors don’t think the metaverse is truly useful, only that others will think it is. Investing, in the true and original sense of the word, is when you buy something believing it will be more valuable tomorrow. For companies, it may be because they are selling more goods and making more money and hence, paying more dividends in the future. So you buy their stock.

Will that be the case in the metaverse?

Only the future can tell.

Until next time,
I’m Nickolas Urpí

From Emergent Financial Services

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