Millions of dollars are being spent on digital real estate as the NFT wave sweeps the internet – but what makes the virtual land grab so popular?
Nonfungible.com founder and president Dan Kelly explained to "The Claman Countdown" Monday that it’s more than having the ability to frolic through a pixelated universe, especially since Kelly himself recently sold a plot of his own land for more than $100,000.
"Virtual land is a place where you’re free to build whatever you want in a metaverse," he said. "Much like the internet, like a website, you’re free to build whatever kind of website you like. You’re not bound by building codes or by the different restrictions… The possibilities are endless in the metaverse."
INSIDE THE NFT BUBBLE: HOW VALUABLE ARE DIGITAL COLLECTIBLES?
Top virtual real estate sellers including metaverse project Decentraland has accrued more than $55 million in sales and, over the past week, claimed two of the top five NFT sales worth $412,000 and $280,000. The Sandbox, another top virtual gaming NFT, has recorded more than $19 million in sales.
Decentraland has about 90,000 global plots, with a majority-owned by the foundation itself, and Kelly explained that just like Bitcoin, the assets are "extremely scarce."
"There’s a very limited supply of them so people naturally are going to speculate on them," he said.
But the value in investing in digital plots is more so found in the selling than the buying. As an example, a Decentraland establishment bought back in January 2019 listed at $27,316 was just sold on Sunday for $280,000.
Kelly said this specific plot is viewed as particularly valuable in the metaverse considering its large dimensions and proximity to roads.
"There’s all these different aspects to the location of that land in this virtual world that people give value to," he said. "They’re speculating that there’s going to be a lot of traffic in these districts, that there’s going to be a lot of traffic on the main roads and that’s how they come up with these valuations."
In order to get involved in buying digital land, Kelly said there’s no accredited investor experience needed which is "part of the beauty of blockchain."
"You are your own bank and you’re responsible for your own actions. There’s just no regulation around this stuff yet."