Famous billionaire and crypto investor Mark Cuban recently appeared in an interview on the Altcoin Daily YouTube channel. However, it was one of his statements that surprised everyone. Taking a dig at metaverse, he revealed that the idea of investing in digital land in the metaverse is no better than draining down money for anyone.
“it’s dumbest, dumbest, dumbest decision ever,” says Cuban.
But that doesn’t mean Cuban is against Crypto or Blockchain. He himself devotes 80% of his investment to cryptocurrencies and DAOs (Decentralised Autonomous Organisations) but is entirely against purchasing digital land sold by any organization.
He backed his statement with two facts: Scarcity and Location.
Investing in real estate in the Metaverse: The dumbest decision ever
Mark Cuban has a strong justification behind the strong views against buying digital real estate in the metaverse. And to a certain extent, his views against it make sense as well.
Physically existing land is a scarce resource in the real world; you cannot create more of it, but a similar concept doesn’t apply in the metaverse. Companies can create a new piece of land as and when required. Similarly, location majorly impacts the price but not in the metaverse.
A few instances like P-Ape purchasing a virtual plot near Snoop Dogg’s digital mansion for $450,000 in 2021 have displayed the importance of location in the metaverse. Still, the people never accepted it in a general sense.
Cuban believes digital land is a risky investment that provides no assurance of returns and advises that such investment only be made only if you can afford to lose all of it.
We can notice the perfect example by comparing the average selling price of the virtual property on Decentraland. It was $37,238.68 in November 2021, but the same piece of land is currently available for $14,385.27. It’s almost 61% from its peak, according to WeMeta.
A digital land works on a similar concept to crypto tokens. The price majorly depends on hype and acceptance by the people. If more people purchase digital land, it gets worthy, but currently, we are experiencing the opposite due to the market downturn.
Facebook is betting big on Metaverse. Zuckerberg restructured the company, created a new parent company named Meta, and changed its logo to display how the future of communication would look. In Facebook’s metaverse, people are allowed to connect using digital avatars via VR headsets and it even promised that users could feel each other using Haptic gloves.
Initially, it was believed to be quite a revolutionary platform. But the initial buzz, excitements, and features are almost a year old, far from being accepted by the masses, and hype seems to vanish with time, just like falling crypto markets.
LUISA ZHOU published a Metaverse Statistics report revealing exciting stats. One of them says, “the metaverse market is expected to grow 13.1% every year,” but it’s much different on-ground. People have mixed reactions, and the concept of virtual ownership is far from accepted generally.
Although, it’s a viable investment for brands like Adidas or Nike, who already have purchased land in the metaverse, providing a 3rd dimension social experience for users by allowing them to browse the products in reality. Individuals planning to invest in creating a digital asset need to make a much-informed decision. It’s indeed risky!
The bottom line
Digital land works almost similar to cryptocurrencies, and their prices are unexpected. HODL, Whale, Pump Dump, and FUD apply here as well. With “crypto winter”, the value of digital land is also crashing. Besides, actual world concepts of scarcity and location don’t apply to the digital world.
On the other hand, it has its benefits and was able to attract investments worth billions.
However, we believe the success of any project depends on its acceptance and use by the masses, not by a few “Crypto Whales”.
Buying real estate in the metaverse is your choice, but please perform thorough research before investing in a piece of land you can never visit physically!