Investing in Crypto-Powered Property – A Look at the Rise of Blockchain-Based Real Estate
A new office tower is under construction with the architectural plan outlined as „ridiculous and cool”, and given the fact that this building, with its own rentable and purchasable space, is located in the business district of an online platform on the Ethereum blockchain, that description hits the nail on the head.
With the world slowly progressing towards a virtual environment, many crypto investors are looking to buy a property with their assets, and outlandish sights like a huge tower with a glowing, floating sign are exactly what most of them are looking for.
While the gaming community has spent years trading and selling in-game items and other digital property, the market has now evolved into a multibillion-dollar one with the introduction of NFTs, which allow users to own a certificate of possession of a certain digital asset, making them the only true owner of it, be it a jpeg, a video, a gif, or a 3d model.
An NFT-powered recreation of the city of London has had its users spend nearly $64 million in crypto on plots of land in this early-development „online game”
The average user is said to have spent around $3000 on property or decorations, with certain iconic sights like the Taj Mahal and the Eiffel selling for $200k and $400k respectively.
NFTs are slowly digging their own grave as the market oversaturates
Other companies like RepublicRealm and Tokens.com have also spent insurmountable amounts of money on virtual plots of land on different crypto-powered platforms, with the latter allegedly spending $2.5 million in crypto on a plot of land in the aforementioned Decentraland’s Fashion district.
Right around the corner, in the art district, a real-life auction house has opened a virtual gallery, which would have cost around $20 back in 2017 when the project had initially started.
At the moment though, even small plots of „land“ can fetch you anywhere from $100,000 to half a million.
With concert halls enough to house millions of visitors and houses that defy the laws of gravity, the possibilities are endless, and with the real world being too much to handle these past 2 years, it makes one wonder how far can this really go. It’s impossible to tell really.
The Future of Virtual Property: Uncertainty Amidst Volatility and High Demand
Just like actual property prices can rapidly drop in price due to unforeseen circumstances, the crypto market’s volatility applies to the NFT market as well, meaning that once the trend fades into obscurity again, these property values could come crumbling down.
Scarcity was the foothold of the NFT community, but with numerous virtual realms popping up each day, and those being virtually limitless, the technology’s progress could be its downfall in the end.
Supply and demand might just have become too much for these virtual worlds to handle, with everyone wanting a piece of the cake, it’s only a matter of time before there’s no more cake to go around.
The future of virtual property is still uncertain, but until then, it’s safe to say that blockchain-based real estate will remain in the spotlight for a while. With current prices as they are, purchasing an iconic sight in a digital realm could be quite an interesting investment if done properly. Who knows what these plots of land could fetch you in a few years.
The NFT market is still young, and it’s unclear what to expect next, but one thing is certain—the future of virtual property looks brighter than ever before. It may not be too long before we see large-scale projects such as entire cities or countries living on the blockchain! Only time will tell.