Have you ever heard of someone buying a virtual house for a million dollars?! You may think that what this person did is a waste of money, but after reading this blog you will have a different opinion.
The recent period has witnessed the media publishing more news about the sale of NFT properties for millions of dollars, which has sparked a great deal of controversy. In light of this, we will attempt through this article to remove the ambiguity surrounding NFT properties, by providing a detailed explanation of everything related to them.
What is NFT real estate?
First, let us refresh the memory and return to the meaning of NFT, or non-fungible tokens, which are assets, whether digital or real, stored on blockchain networks, and have special metadata that distinguishes them from each other.
These codes differ from digital currencies such as Bitcoin, as digital currencies can be exchanged for other currencies or money of the same value, but NFTs cannot be exchanged. This is due to its distinction and uniqueness.
Non-fungible tokens have a very important feature, which is their ability to represent titles to assets, whether real estate or otherwise. Since real estate of all kinds are commodities, real estate can serve as non-fungible tokens.
Thus, you can define NFT properties as unique and distinctive properties that are sold, bought and exchanged on various platforms.
Types of NFT properties
There are two types of NFT properties, which are as follows:
Real estate
They are real estate properties that have been documented through blockchain technology and have a real origin on the ground. In 2017, the first NFT property, a studio apartment, was sold in the United States of America by businessman Michael Arrington, founder of TechCrunch.
More buying and selling operations are now being conducted using this modern technology, and it is expected to become the basis of real estate transactions in the coming period. For several reasons, the most important of which is the ease of conducting transactions and saving time.
While sitting on the sofa in your home, you can browse properties for sale in any country you want, and not only that, but you can also choose the decorations and wall colors as if you were supervising the design.
Virtual real estate
They are properties that are found in various virtual worlds or metaverse worlds, such as The Sandbox, Decentraland, and others.
What are NFT properties in the metaverse?
First of all, do you know what the metaverse is?!
The metaverse is a modern virtual world that simulates the world we live in, where through its various platforms you can do more activities such as working, learning, hiking, and others.
The metaverse is not a world in which we escape from the real world, but rather we mix it with it to improve our lives and transactions, and provide an advanced form of social interaction, entertainment, etc.
Mark Zuckerberg, founder of Facebook, or what he recently called Meta, defined the Metaverse as the next development in social media technology, where you can share your exciting experiences with people even if you are not with them personally, and you can also do many things with them that you cannot. Doing it in the physical world.
There is nothing you can't do in the metaverse, and since NFTs are virtual assets documented on blockchain networks, which can be bought or sold virtually, they are the right tool to transact in this world and prove your ownership of virtual assets in it.
Ultimately, we can define NFT properties in the metaverse as virtual properties that you can own in virtual worlds.
What are NFT lands?
These are lands that represent non-fungible tokens found on several projects and platforms, such as The Sandbox, Decentraland, Axie Infinity, and others.
This field has achieved impressive success, with some NFT land sales reaching amounts higher than real-world real estate prices. A virtual plot of land in the Decentraland project has already been sold for $2.43 million.
You do not have to be a player to be able to purchase lands in these projects. Purchasing lands is not limited to players only, as more projects have begun to encourage people to invest in shares of lands created in virtual worlds.
You can use your land for more purposes, such as:
Building a house: You can use the piece of land to build your house in the virtual world.
Business: You can create a virtual office or company, or if you are a brand owner, you can create a mall for your products.
Social events: You can rent your land to hold virtual events, such as conferences, parties, or social gatherings.
For example, in September 2021, artist Snoop Dogg collaborated with The Sandbox to hold a special concert.
How to profit and invest in NFT properties?
NFTs work like any other type of non-fungible token. You can buy real estate or land and save it in your digital wallet until its value increases, and then you can sell it and benefit from the price difference. You can own real estate or land as non-fungible tokens through two methods, which are as follows:
Entire Ownership (EA)
This method can only work if you already own real land.
Fractional Ownership (FO)
This is the easiest way to own real estate or land.
Fractional ownership is similar to crowdfunding or any other structure that allows users to purchase shares.
Each owner can own one or more shares that represent part of the land.
These shares are in the form of non-fungible tokens.
As with stocks, you will receive dividends depending on the percentage you own the property.
You can also sell your share of the land to another investor.
How to buy NFT properties
Purchasing NFT real estate is the same process as purchasing any other NFT.
Most non-fungible token properties are ERC-20 tokens, and more of them, whether in games or markets, are built on various blockchain networks, most notably the Ethereum network.
Virtual properties are often purchased on their own marketplace, or you can purchase them through other platforms that offer them. The amount you pay for a virtual piece of land depends on its location or rarity.
So you need these components to buy virtual real estate or land:
An account with a game or marketplace that displays the property.
Cryptocurrency wallet.
A digital currency that matches the token.
The digital currencies through which you can buy real estate or land vary; This depends on the platform or project it belongs to.
But do you know what the most famous currencies are?!
The most popular digital currencies for buying real estate or land are NFT
MANA digital currency: It is the currency of the Decentraland project, through which users can purchase lands that they can later dispose of as they wish, whether building on them or generating income from them.
AXS digital currency: It is the currency of the game Axie Infinity, which allows players to purchase virtual lands with it.
Sand digital currency: It is the currency of The Sandbox project, which is one of the most famous metaverse projects.
Conclusion
Now that you know everything there is to know about real estate and virtual lands, do you think it is right to invest in this field?!
You should not overlook a very important point, which is that investing in NFT areas in general is like a big adventure in which there is profit or loss. If you are not interested in real estate, do not risk investing in what you are not passionate about.
This article is copied from the UPYO blog
