Penn Wealth Publishing

2022.01.16 Penn Wealth Report Vol 10 Issue 01

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12 penn wealth Report volume 10 issue 01 16 Jan 2022 Copyright 2022. All Rights Reserved. Science & technology Investor e Metaverse Buying & Funding Virtual Real Estate Believe it or not, a tract of land in the metaverse just sold for $2.4 million; and the movement has plenty of room to grow On first blush, it appeared to be a satirical story written in e Onion. Did a plot of digital land in the metaverse really just sell for $2.4 million? Upon fur- ther investigation, the story was real: Metaverse Group, a subsidiary of, shelled out MANA 618,000 (MANA is a cryptocurrency) for the purchase of 116 parcels of land (each parcel equating to 52.5 square feet) in the heart of Decentraland's Fashion Street. is is an area poised to become an affluent fashion and e-commerce district within the digital world. (It gets more interesting from here, so it may be time to pour an adult beverage—or whatever your preference—and settle in.) As mentioned, the parcels of real estate were purchased with MANA, the native currency of Decentraland. For a physical world comparison, consider the islands of Yap in Micronesia, whose inhabitants use stones known as "Rai" for currency. At the time of the November purchase, MANA was trading around $3.93 per coin, hence the $2.4 mil- lion sales price. It should be noted, however, that the crypto was trading for $0.75 a month earlier ($463k value), and currently trades at $2.91 ($1.8M value). Digital land owners must have nerves of steel. Why buy something which can be easily replicated? Metaverse Group said it will use its pricey real estate to expand its presence in the digital fashion industry, but how does that manifest itself? at is precisely the question many skeptics are asking right now. In researching this story, we came across a highly critical article in WIRED magazine entitled, "e Metaverse Land Rush is an Illusion." e author makes a number of damning arguments, pointing out that buyers of digital land are simply buying numbers in a computer. He goes on to argue that an investor may buy land in a digital Manhattan, but that computer programmers "could easily create an infinite number of Manhattans that are just as easy to get to." Reading those words made us reflect back on an interview we watched during the pioneer days of the Internet. Many recall Soledad O'Brien as a national broadcast journalist. We remember her, however, as the host of an obscure TV program in the mid-1990s called e Site, which was devoted to the advent of the Internet. e guest on one particular episode was the epitome of a pointy-headed, erudite professor—right down to his unkempt hair, glasses, and scruffy beard which he would stroke. e topic was the URL, better known as a domain name or web address. To say he was dismis- sive and mocking of the commoners who were rushing in to buy their own domain names is an understate- ment. He even saw a website address on a billboard (gasp)! His argument was two-fold. In the first place, only highly educated industry experts (like himself, of course) had any business owning domain names. Secondly, there was virtually no limit to the num- ber of domain names which could be created, making their value highly suspect. ose specious arguments parrot the ones being made right now with respect to the metaverse. Even back in 1996 or 1997 when this interview took place, we knew that the "scholarly professor," lacking any imagina- tion, was dead wrong. To say history proved us right is an understatement. Global e-commerce sales surpassed $5 trillion in 2021, and virtually every US business has an online presence—via those ubiquitous domain names. If digital land is worthless, i.e., sim- ply numbers in a computer, why are so many major brands getting in on the ground floor? ey are doing so to market their brands in a new, immersive way. Consider the metaverse the nexus between a com- pany's bricks and mortar store, their website, and the aggregate of their social media presence. Instead of the 2D online shopping experience (that's so 2000), you will be able to "walk around" inside of the store, see products, interact with staff, and actually buy things.

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