When you search in "What is digital real estate" into google, you're likely going to find guides to obtaining older versions of digital real estate such as domain names, websites, and URLs'.
And this wouldn't be wrong, as these are still types of digital property that can be bought and sold for a profit. But, in this article, we're going to chat more about Web3 digital real estate like the Metaverse and protocols like Parcl.
This article is mainly for beginners in this space, but feel free to check out our "What is Parcl" article if you want to learn more about our protocol. So, let's dive into five things you need to know about digital real estate.
What is Digital Real Estate?
Let's start with the basics; what actually is digital real estate? Digital real estate can include the ownership of a URL, website, domain name, social media account, and now virtual property in the Metaverse.
The buying and selling of which can be highly profitable if you know what you're doing. Since we're a Web3 protocol, we'll focus mainly on the Metaverse and how you can gain exposure to real-world real estate through the use of digital real estate investing.
So, what can you actually do with the land in the Metaverse?
The main thing you can currently do is buy and sell the virtual property, but on some larger metaverse projects like Decentraland and Sandbox, you can design your own events and play with other users.
By designing your own events and games, you can easily monetize this too. You'll also have the ability to rent out your land to other people if buying outright is too expensive. Currently, the Metaverse is becoming more popular, with large organizations and businesses buying land to advertise their products in both the physical and digital worlds.
Is The Metaverse Digital Real Estate?
Yes. The Metaverse is digital real estate, but it's not the only way to invest in this space. You can also invest in digital real estate via Parcl.
Our protocol built on Solana allows the average person the ability to invest in the real estate market using synthetic assets.
So, we've created something called the Parcl price index, which values real estate across the US under certain parameters, which are then tied with a synthetic asset that follows this price movement. Like a derivative in traditional finance, a synthetic asset follows the underlying asset's price, allowing you to actively trade the asset without ever owning it.
Meaning that if you wanted to hedge against the effects that Covid-19 had on the Manhattan property market, you could go short on that area and profit.
Parcl allows you to trade your favorite neighborhoods on a detailed or broad level; it's totally up to you; the same goes for the investment amount.
Many people are priced out of investing in physical real estate, but thanks to Web3 technology, Parcl can offer the average person a way to invest in digital real estate to gain exposure to the physical real estate market.
If you want to learn more about how Parcl works and why we're so passionate about leveling the real estate investing playing field, check out our Intro to Parcl article.
Digital Real Estate Investing: Is It Profitable?
Of course, digital assets are a growing asset class, and that goes for NFTs and not just virtual real estate. We go into detail about the impact NFTs can have on the real estate industry here.
But, in summary, the digital asset class is booming and has made plenty of people multi-millionaires over the past few years.
The NFT "Everyday's - The First 5000 Days" sold at a Christie's auction for $69 million.
Not only that but a 500 square metered plot of Decentraland land sold for $2.43 million, making it one of the largest sales on record.
So, it's safe to say that yes, you can make a huge profit from digital asset trading.
Where Can You Buy Digital Real Estate?
We've just determined that investing in digital assets like real estate is profitable, but where do you buy it from?
Firstly, you've got to have your own wallet to store your land NFT and buy the assets. Check out our phantom wallet setup guide to see how it's done.
When you've got your crypto wallet set up, you now need to just put in a bid for the land, this can be done straight from the metaverse project itself, such as Sandbox or Decentraland, or you could use a third-party platform such as OpenSea or MagicEden.
Is Digital Land Going To Continue To Grow In Popularity?
Yes, and we don't see this slowing any time soon. With people becoming more interested in gaming and the gamers of the early 2000s growing up and obtaining higher paid jobs, this disposable cash is being spent on digital assets like real estate in the Metaverse, gaming items, and avatars for their digital identities.
But, another thing to remember is that it's not just for people who game; it's for those that want to profit from this digital gold rush.
As the world moves further into the digital era, we'll see more people buying digital land, creating digital identities to escape the real world, and spending more on in-world items.
Not only will it be filled with gamers, but tech giants and other organizations will also begin buying up more land to advertise to millions of users.
The virtual floodgates have opened, and there's no way to close them.