Would You Pay $800,000 for Virtual Land? Someone Did

For some, the harsh reality of daily life becomes too much. Some choose to leave this world to go to a better place. That place is called, Decentraland. This is a land where “you can create unique experiences unlike anything in existence”. And the good news is, you don’t have to die to go there.

Decentraland is a virtual world where you are free to develop your life in any way you see fit, as long as you are willing to pay a price. There is, currently, a land rush to Decentraland and some people are paying more for virtual land than they would for land in the real world. Once you buy your plot, you can develop it in whatever way you like. You could build a casino, a church, a movie theater, a store, or just a mansion. It’s all up to you. Take a look at their brief promo video.

But before you start reaching for your wallet, even your Bitcoin wallet, there are a few things to consider. First of all, you can only pay for these plots with a virtual currency called MANA, which is a currency unique to Decentraland. MANA uses the Ethereum blockchain so you’ll have to purchase Ethereum currency first so that you can exchange it for MANA and buy a plot of virtual land. I’m not going to go into details on how to do this, but, for those interested, you can find information here. You’ll have to read another guide for exchanging your Ethereum currency for MANA.

Assuming you now have your MANA, you can go to the Decentraland Marketplace to choose your plot of land. Here’s what you will see when you go there.

decentral market

The land for sale by a particular owner is shown by a red square. The blue squares are also plots that can be purchased. The prices given are in MANA. At the time of this writing, the plot listed on the left is selling for around $3,900. I have seen prices in prime locations selling for nearly $800,000. Why? Location, location, location. Prime plots, like the one shown below, are located in the middle of Genesis City and on the main square (Genesis Plaza). The cheapest land is located on small roads far from the city center. They are now selling for just over $500. There are a limited number of parcels available (90,000) so that speculation can operate. Each parcel is a 10m x 10m square (33ft x 33ft).

decentral prime

Okay, so let’s assume you’ve bought a parcel of virtual land in Decentraland. Now what? Well, now it’s time to build something. However, for the moment, most people seem to be buying these plots for speculation. They have no intention of building anything. However, the people paying big money for land in Decentraland are probably large companies that want to position themselves just in case this idea takes off. These companies probably have the resources and technical know-how to build a retail outlet on this platform. But, in order for a profit-making business to work, they need visitors to the platform, and that may be a problem.

In order to build anything on your parcel, you’ll have to install the Decentraland SDK (software development kit) and be able to write code in a language called TypeScript, which is related to JavaScript. If you do not possess these skills, you probably will not build anything on your land. For those who think the interface will be something like that of SimCity, think again. There are some tutorials available with pre-written code but the results may not prove so satisfying. Here is one of the more complex codes that will produce a scene with dogs.

decentral dog

Yeah, don’t expect much realism here. Expect the realism of retro games but in 3D. The platform is expected to launch by the end of this year. At that time, interested people should be able to explore Decentraland and interact with what is available there, which probably won’t be much.

Some may feel this is simply a VR version of Second Life. There is some truth to this. The only real difference at this point is that Second Life would not allow someone to own land. They can only rent a space. Actually, they pay an initial purchase price then pay ‘maintenance fees’ thereafter. My problems with Second Life were having a slow internet connection, getting trapped inside buildings, and meeting unsavory people. I expect Decentraland will have many of the same problems unless some regulations are put in place.

For example, Second Life relied on income from its virtual casinos. However, government agencies claimed that such gambling violated laws in some locations and most of the casinos were forced to close. I expect the same problems to surface with regard to Decentraland. Although the developers claim that, “no one can limit what you build”, they probably can.

I’ll have to wait for the online appearance of Decentraland before I can predict its future. There is no doubt that a virtual world with 360 degree reality is a saleable idea. The movement towards creating such a world has been set in place and nothing is going to stop it. I feel that Decentraland is a sort of intermediate platform on the way to that world and, unless they develop it themselves, some other virtual world with more realistic experiences and a less complicated interface will replace it.

For now, Decentraland is nothing more than a virtual land speculation program. You can spend $800,000 on the belief that what you bought is real land. If other people share this belief, fine; otherwise, you may be left with nothing more than a line of computer code.

If I had a plot on this platform, I would sell it today and hope I made a little money. Second Life is far more developed and, as one reviewer put it, “Second Life is more of a social world and not recommended to make substantial income online.” Yes, some people make money by selling cyber goods or skins, such as those seen below. But that’s the exception.

seond life skins

The hope that Second Life will become a true virtual world with university lectures and philosophical debates has all but vanished. As Motherboard noted in a 2016 post, “if you let users make whatever they want, they’ll make a lot of sex stuff.” Indeed, that is where Second Life makes most of its income. If you visit Second Life, you’ll find a virtual ghost town. The only activity is taking place on an adults only island that it created. In fact, if you look at all virtual worlds that have been created, they have eventually evolved into adult only areas. This may say more about human nature than anything else.

A true virtual world would have to mimic the real world. It would have to develop from the ground up. This is the SimCity or Age of Empires model. Developers could create a ‘canvas’ for development and colonists or settlers would have to use natural resources to build dwellings and communities. There would have to be an intuitive user interface with easy to use tools that give realistic-looking results. Commerce would develop naturally. Communities would have to develop laws and law enforcement as well as governments. It all may sound a little boring but real businesses will only invest in a stable platform that attracts real participants willing to spend real money.

Decentraland has no developmental philosophy other than ‘buy land and do what you want’. It’s a model that has never really worked in the past. People may initially come here out of curiosity but, I would expect Decentraland to soon go the way of Second Life. In short, Decentraland is a step on the way to a true virtual world, but, for now, it is more of a misstep.

 

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