What Is Digital Real Estate? | Built In

If you have an opinion about digital real estate, it’s a polarized opinion: either you’re totally into it or you think it’s the dumbest thing in the world.

Without getting too technical, let’s take a look at what digital real estate is, where the opportunities lie today, and where its future may lead. I’ll reveal my own opinion at the end, but with emerging technologies like the metaverse, it’s important that you formulate your own.

what is the digital real estate sector?

is an ironic name: a “real estate” property in a “virtual” digital world.

In classical thinking, investing in real estate meant buying property ahead of time in a place where you had predicted people would want to be. Whether it’s commercial traffic, residential housing, agriculture, or a great place to create advertising, real estate is made up of some type of market opportunity that involves the physical presence of human beings.

In the digital age, the concept of heritage becomes a bit more blurred. Property can take a variety of forms: You can own a plot of land in a virtual world, or a “seat” in a virtual concert hall, or a billboard in a virtual representation of Paris. And a “digital world” is not limited to VR (virtual reality) or the metaverse. A digital property could even be an item shop in the middle of a custom map in fortnite or a special conference room in a virtual workplace.

Because properties can take many forms and we’re talking about the digital universe, the worlds you can buy them in are limitless; a new digital world is always being built, presenting new opportunities with new interested audiences.

digital real estate does not follow the classic economic model of supply and demand, because while there is only a finite amount of land on earth, there is an unlimited number of virtual worlds that can be built, constantly evading the problem of increasing shortage. And that, it turns out, is a bit of a problem for investors.

read more about virtual and augmented reality at builtin.comeverything you need to know about extended reality

How will digital real estate work in practice?

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with the constant marketing of a virtual reality world in the metaverse (largely because the meta is on our faces every minute of our lives), many people have thought that virtual reality is the only place where the space exists digital. and since they are not vr users, they are not interested in this.

but I personally predict that virtual reality is not the end game, or even long-term opportunity, because it replaces the world we live in with a digital world that (currently) does not have the depth of experiences of our physical one: the feeling of a breeze, the smell of mud, the inexplicable sense of someone’s presence right behind you.

Instead, I think AR (augmented reality) is where we’ll see how the virtual world unfolds. ar expands our existing world, rather than trying to replace it. For example, imagine wearing your sunglasses, looking at a sushi shop across the street, and being able to see reviews of that shop in the lens of your glasses.

This makes location-based digital properties much easier to understand: you could have a parcel in the middle of times square to put an ad or create a game for people to play there.

read more about the metaverse in the built-in network of expert contributorsdoes anyone really want to live in the metaverse?

the risks of the digital real estate sector

You’ve probably already noticed a couple of basic issues with the “value” of digital real estate. but let’s put them on the table for clarity.

1. no shortage

The limited amount of land on earth means that there is a limited amount of land to buy, and as more people buy real estate, its demand (and value) increases due to less availability. but in the digital universe, nothing prevents anyone from creating a copy of something. if a world shows promise, a new server can be activated and replicate the same. (Of course people tend to gravitate towards the original. Think of how many angry birds knockoffs there are, but the original stands out.)

If a digital world becomes popular, you could argue that the scarcity lies in the opportunity available within this world (I’d rather shop in the center of the most popular location than in the middle of a digital desert), but there’s still there is no hard limit, dictated by the laws of physics, as to how many things can be in one place.

In the real world, “this city isn’t big enough for the two of us” might have some truth to it, but in the digital universe, in theory, millions of copies of the same experience can fit.

2. no foot traffic

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The limited currency in the digital world is not space, but the attention of users. By way of comparison, if you own a liquor store on the Las Vegas strip, you’ll probably make a lot of sales from foot traffic alone, but there’s hardly any concept of traveling through nearby properties in the digital world. user attention is transient in digital experiences: as soon as you can reach it, you can lose it. if a user wants to experience something, they can enter a url, click a link, or enter a location and go directly to that experience. they don’t get in their car and drive home and stop by your store every day remembering how great your product was, they just disappear.

3. the off button

Anything digital runs on a server. at any time, someone can shut down that server. and you have no control over that.

this means that everything you built in that world vanishes. any cost that was sunk into it is lost. your only recourse is to legally pursue the person who pressed that button, but that will probably be quite difficult, especially since they probably already prepared for this outcome before turning it off.

Think if shopify stopped their servers or if medium shut down their site. all the content generated, all the accounts created and the audiences built, all of that disappears. these brands have liability, so legal recourse is a little easier, but in the wild west of the digital world behind the mask of a keyboard, people can be much harder to find, if you can find them at all. /p>

read more about the metaverse in the integrated network of expert contributors: a tale of 2 metaverses

how to mitigate the risks of the digital real estate sector

With all that risk, what’s the chance?

1. don’t buy, rent

Most of this risk can be mitigated by limiting your exposure as you invest in a digital world.

Let the creators of a digital world create the main experiences and take advantage of the popularity of those experiences. this is more like sponsoring something, rather than investing in something. this allows you to be present where users are currently, stay engaged only as long as it’s already valuable, and exit when it no longer presents an opportunity.

If you still anticipate that a digital world will be an investment opportunity, consider investing in a metaverse company traditionally like investing in a startup, rather than investing money in your product that may be gone tomorrow. this gives you direct legal protection and potentially a stronger overall opportunity.

2. think like a developer

If you are going to be present in the digital universe, you will have to create a valuable experience to capitalize on that presence. this really means creating or providing something in that digital world that is intrinsically valuable to those users. find out what they want, what entertains them, what motivates them, and how you can give them something that will make your presence truly count for them.

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This could mean that you now become a digital experience developer or tap into an existing network of developers with experience in the world you’re building in. you can’t just throw money into a pot and think it will grow. you should deeply consider what could be a real opportunity in this specific location in this specific world.

3. take notes on what currently exists

what we are discussing here can be hard to think about because it is often associated with buzzwords like blockchain, vr, metaverse, which are usually nebulous concepts because they are still so new. but they have almost nothing to do with what a digital property actually is.

Take fortnite, for example. Fortnite is one of the most popular digital games in the world, and sometimes they host virtual concerts, where your character is taken to a special island. this island has one or two stages, but it also has many games and experiences scattered throughout the island. these are often sponsored, such as a monster energy target shooting or an epic games flight school. they create a valuable experience for the moment in a specific location for precisely the users who will exist in that world during that time. it’s an example of a small digital world where “investors” in a location-specific property provide something users appreciate, creating a positive association for that brand (and revenue in some cases where advertising isn’t the sole purpose).

learn more about buying digital assets in the integrated network of expert collaboratorsbusiness online: a guide for investors and sellers

my opinion on digital real estate investing

try it if you like what you see, but hedge your bets.

I see no point in blindly throwing money at things like “decentraland” or other virtual worlds because I haven’t seen any real value created for users in these worlds other than “this is a digital real estate investment opportunity “. .” eventually there could be valuable experience located there, but this is like finding a needle in the world’s most dangerous haystack – the odds are slim that you’ll capture a location that replaces a user’s world (in the case of vr) and hold the attention of that user for an amount of time that is worth spending a lot of money on. As of now, the market seems to be proving my thesis correct.

where I see an opportunity is to be very aware of the experiences that engage users, understand how many real users are participating, and partner with the creators of those experiences to “rent” a digital property to capitalize on the existing attention that users they are already giving think of it as a premium you pay to mitigate your own risk.

I think the world of the metaverse is exciting, but I don’t think the current concepts will satisfy user desires, and it will be a long time before they do. As with any investment, you need to put yourself in the shoes of a consumer of that product and ask yourself if you understand it, if you’ve enjoyed it, and if you personally see it as important to you in the near future.

read more from paul rowe in the built in network of expert contributors on how to sell challenging ideas

Content Creator Zaid Butt joined Silsala-e-Azeemia in 2004 as student of spirituality. Mr. Zahid Butt is an IT professional, his expertise include “Web/Graphic Designer, GUI, Visualizer and Web Developer” PH: +92-3217244554

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