Johnny McMameli has spent nearly £5,000 on plots of land.

But he cannot physically walk on this land – nor can he live on it or build a house on it.

This is because the 23-year-old has invested in the metaverse, which means his land is completely virtual and only exists within a digital world.

McMulley, from Belfast, is one of many people who have decided to buy virtual property in the Metaverse area.

Last year, virtual land deals reached $350m (£267m) at The Sandbox, the largest digital property platform, according to a report from the Center for Finance, Technology and Entrepreneurship.

Another $110m (£84.2m) in transactions was made on Decentraland, the second largest Metaverse platform.

What is metaverse?

The metaverse is not a single digital space. It is a network of virtual reality worlds, created by companies and platforms, where users can interact, play games, attend events, and purchase land.

Horizon Worlds is one of the most famous metaverse. It was created by Facebook, which has now changed its name to Meta as the tech giant has shifted its focus to virtual spaces.

Other brands have also announced their own digital worlds.

Manchester City plans to build its first Metaverse football stadium in partnership with Sony.

McCamli, CEO of CryptoClear, bought his plot of land in The Sandbox last October. He said, “There are casinos in the metaverse, and there are also museums, but there are also events like podcasts and conferences that I have already attended. So the best way to look at it is that it takes the real world and turns it into digital beyond the likes of Zoom.”

Why do people buy virtual real estate?

For McMulley, the opportunity to gain a claim in this fictional world was an opportunity not to be missed, despite the uncertainty in the market and price volatility making it a very risky investment.

“It’s like any new investment, any new asset class. When I got into Bitcoin when it was $300, I was told it was too risky, the same with Ether at $4. I think getting a plot of land in Decentraland for $4,000 is absolute. deal,” he said.

He plans to put his 10-year purchase on hold: “I think the metaverse will mature in about a decade and I’ll consider selling the land when that time comes.”

Land owners can also use their virtual spaces to design experiences for others to enjoy.

“The community plots, are my favourite. A really good example is, I think it’s a ‘gecko beach’ done by someone, as you can imagine, it’s a gecko-infested beach,” said Mr. McAmely.

Find a home in the virtual world

Finding the perfect home in the Metaverse area is like real life.

Land adjacent to roads and near desirable areas such as “fashion” or “museum” areas will charge a higher price and will be more attractive investment opportunities.

In The Sandbox, the more crowded central areas near other attractions are much more expensive than the newer suburban neighborhoods.

Who your neighbors are will also affect the value of your property.

In September 2021, rapper Snoop Dogg announced his digital “Snoopverse” at The Sandbox.

Two months later, a property next to his plot of land sold for more than $450,000 (£350,000).

But, unlike traditional property purchases, there is no third party or legal presence that can guarantee the legitimacy of the deals.

This can be risky when buying from a secondary market such as OpenSea, where purchases are made with cryptocurrency.

Why do people build virtual property?

In addition to landowners, there is a new generation of “meta-architects” who design virtual spaces.

Stavros Zachariades is a traditional architect working in south London, but he started designing for the digital world to tackle the pandemic after his brother Adonis Renovi founded NFT Market.

The 37-year-old recently designed pop-up stores for Fashion Week.

“Drag into the metaverse and build into the metaverse is [people and businesses] They can show what they’re all about,” said Mr. Zacharias.

“They can showcase their products. We can provide meeting spaces for different people, especially now with COVID and the past two years people have become more distant.

“You can get, from the realms of super science fiction, floating buildings that spin and morph – and the other side of classic and historic architecture styles.”

He believes the metaverse can open doors for those who lack connectivity in real life: “I was thinking about how to change accessibility, for example, a person who doesn’t have the same mobility can be equal in the metaverse. Why not?”

“It is impossible to know what the end game will be.”

But many warn that these investments may falter.

YouTuber “Mitch Investing”, from Birmingham, regularly delves into topics like personal finance and emerging technologies on his channel.

He believes that the promises of the metaverse becoming a part of our daily lives may be overstated.

“It’s so early in its development it would be like investing in a company that’s only been in the works for a year. I’m not sure if it’s going to take off or not, and I’m not very sure in which direction the company is going, and also not sure how the business model might evolve… It’s very speculative in my opinion.”

There is a concern that not all virtual worlds will succeed in attracting a large enough number of users.

He warned that “there could be thousands of metaverses like websites today. It’s impossible to know what the endgame is.”

Risks and Volatility

The Financial Conduct Authority has described crypto assets as “extremely high-risk speculative investments” and warned that people who trade in these should be prepared to lose all of their money.

There are also broader concerns about users’ safety in terms of online harm.

The newly introduced online security bill would take into account activity in the metaverse, where companies are required to take action if their users commit fraud, including those in virtual reality spaces.