Crypto-rich investors snap up land in the 'metaverse'2021|03:02
What do you do with 69-million-dollar artwork that doesn't physically exist? That's the question faced by the Singapore-based investor calling himself MetaKovan, who made headlines last month when he bought the digital artwork "Everydays: The First 5000 Days" by the American artist Beeple at Christie's. The work is a non-fungible token, or NFT – a new type of virtual asset that has its ownership status and authenticity verified by blockchain. MetaKovan is looking to showcase his art by working with architects to design virtual galleries the public can enter through web browsers or virtual reality technology. But art is just one part of the new blockchain-based economy where land, buildings, avatars and even names can be bought and sold as NFTs, often fetching hundreds of thousands of dollars… these new environments referred to as “the metaverse.” MetoKovan’s business partner, who goes by Twobadour, told Reuters in an audio interview that gobbling up NFT’s is just the tip of the iceberg for eager investors. “The real explosion will happen when they’re able to figure out and they’re able to experience these NFT’s as they were intended. If it’s a plot of virtual land you ought to move around in it, have an immersive experience in it.” Prices for virtual land plots are already soaring. One of the best-known online environments, Decentraland, has seen more than $50 million in total sales, including land, avatars and virtual clothing. A patch of land measuring 41,216 virtual square meters sold for $572,000 on April 11, which the platform said was a record. Sebastien Borget, co-founder of virtual world The Sandbox, even went so far as to say he thinks the NFT-economy would outgrow the real-world physical economy within a decade. “Because there’s just no limit, there's no barrier, no physical limit. For goods to travel, there’s no logistics, no shipping. No limit to creativity. No limit for people to enter.” Decentraland, which has already hosted a virtual fashion show in collaboration with Adidas, is also attracting interest from festivals looking to go virtual due the global health crisis, said events coordinator Samuel Hamilton. “When we get to that point we expect hundreds of thousands or even millions of people.” In what will be one of the biggest names to join the party, video game maker Atari told Reuters it planned to launch its own blockchain-based virtual world. It has already licensed a retro arcade within Decentraland and is due to open a casino. But some investors caution that while big money is flowing into NFTs, the market could represent a price bubble, with the risk of major losses if the hype dies down and ushering in what one expert called a crypto winter. And there’s no virtual overcoat to protect against that.