Woohoo! I Bought My First Bit of Virtual Land!

Yeah, I know I could have bought land in the Sandbox or Decentraland now or even way back when it was super inexpensive.  But I didn’t;  I’m not sure why. The most likely reason is that the gas fees were too expensive as both of those metaverses are on the Ethereum network.  Whatever the reason, flipping land in the earlier metaverses was not something that interested me. But times have changed, and now I’m officially a land owner in the Cardano metaverse.

I know folks who bought several basic plots in Sandbox and Decentraland’s early developmental stages. I guess you could call their venture virtual house flipping because the goal was to turn around and sell for a profit. 

Now those who just sat on their land and didn’t “flip” it early on are selling their NFT deeds to large companies that want to digitally entertain and market to their brand audience. And these large companies are paying big money for these rights. Once again, patience and persistence win. 

The Metaverse: Now and Then

Early virtual land squatters started in the oldest of the crypto metaverses Sandbox or Decentraland, and  SAND or MANA was their rewarded gain for these investments.  SAND and MANA are ERC-20 tokens on the Ethereum network that are exchangeable for USD on most all crypto exchanges. 

Virtual land is just like any other asset, except the deed transfer comes with rights to build and explore the land. Any company or individual purchasing these deeds will be able to build on that virtual plot of land. Companies often buy a bunch together to build a larger presence.

Several digital universes exist now with all forms of life and automation roaming around them. This concept might be difficult for some people to grasp, so I suggest watching Ready Player One, a great movie that portrays what a Metaverse is most accurately. Since access to that movie is not feasible right at the moment, I’ll try to explain the concept of a Metaverse as best I can.

A Metaverse is a computer simulation of a virtual environment where individual users can decorate an avatar and explore the worlds created inside. Second Life comes to mind as an older example. Here is a complete guide to the metaverse.

People actually explore these universes and co-exist with others in the metaverse as well as in the real. That’s a funny term I learned from my daughter or that movie; it’s easy to explain what it means with an example. My daughter goes to camp in the real and plays Roblox with her friends from camp in the virtual. In the virtual isn’t a real saying yet. Folks generally say online instead, but I think in the virtual has a lot of potential as more virtual worlds are created.

Nonetheless, since you can do some of the same things there and here, it might be necessary to denote the difference. For example, my daughter made lasagna last night but couldn’t really eat it because it was in the virtual world of Roblox.  But that’s okay. In the metaverse, lasagna doesn’t spoil.

The Economics of Virtual Land Squatting

Thinking back to the earlier days, it took quite a lot of technical know-how to transact a virtual land purchase. People I know who bought land had to pretty much figure out how to nest the needed tech to buy on their own. At that time, these metaverses were only a webpage and a few videos showing the developer’s early creations. These platforms were difficult to use back then as all the technology was new, and you needed the skills to use several layers of technology together in a new way. 

By the time the NFT virtual land deeds became eligible for sale, the whole system may have been completely built. If so, selling the deed would have been much easier than buying it because the tools and wallet technology had grown up in the year or so it took them to get to the end of their investment time scale. 

For example, landowners who sold their 100 MANA NFT for 1,000 MANA might appear to have received a straightforward profit of 900 MANA. But the gains are actually more complex. Consider that the initial 100 MANA may have cost that person $1 total. When the 900 MANA profit is realized, MANA could have been worth $1+ each. Therefore, you can see how actual profits can soar when implementing a long-term mentality.

My Purchase

Anyhow, here’s what I did.

I purchased land on Virtua Prime— a new virtual planet in the Virtua Metaverse on the Cardano network.

I spent 650 ADA on this property, worth $300 in today’s market. It sounds like I wasted $300, eh?  You have to remember, though, that I bought this ADA when they were a few pennies each, and my actual cost for the 650 ADA wasn’t $300; it was more like $6.

It was tough to part with my ADA as I’ve had it for a while.  It’s been split between bots and staking, and now it’s time to put it where it belongs— in the Cardano network. You see, I’m not really selling my ADA. It’s more like I’m pushing it into a usable venture for a while in hopes my NFT deed appreciates over time. Aside from having fun bouncing around in the virtual, starting this virtual land project provides an opening into the Cardano network because I have an asset measured in value against the main currency, ADA.

The Future

Over time, I believe this virtual land plot will appreciate in ADA value, and I also think ADA will appreciate in USDT value. Therefore, this venture has the potential for larger growth over my long-term time frame. Plus, it forces me to not sell the ADA locked up in the land value.

I used my staking gains to offset this purchase price since, over the years, I also earned 52 ADA by staking. So really, I only paid 600 of my real ADA, and I still have about 400 staked, thankfully.

This new adventure is going to get interesting as I also think I’ll eventually use this land to make passive gains until (or even IF) I want to sell it. I need to start building up my base of ADA because I have a sneaking suspicion I’ll want to spend a little more on items such as a mailbox, a saw, some nails, or even a hammer to build a hut. Who knows at this point since the interface hasn’t been built yet?

I’ve turned to Bitsgap for this. (See the image below.) I’m running their new GRID bots to make gains in the base currency rather than the quote. I’ve tried it out with a very small amount of ADA and USDT; unfortunately, the profits are also small. Here’s hoping ADA gets more expensive and this process starts producing more results.

Virtual Homelessness

In the past, fear of failure and fear of the unknown have left me virtually homeless. For some reason, I pushed past my fear this time and took the risk. That doesn’t mean I know what I’m doing or that I know what the future will hold for this land. Nor do I even know when the tools will be there for me to do anything with my purchase.

However, I have a really high confidence that the Cardano mission of getting everything right before going live will build a promising ecosystem that will thrive and survive. This purchase in the digital world is my a test run. It mainly provides an inexpensive playground where I can figure out how I want to approach the metaverses. Right now, I can’t afford to purchase in the other metaverses, but someday I will. And when that happens, I believe I will know more and make more intelligent choices because of this test run in Cardano.

Not to deliberately be negative, but with my luck, this venture with Cardano will crash and burn, and I’ll have wasted my ADA. Though, to be fair, I’d really only lose enough USD to buy a single fast food dinner. Since I don’t need the extra sodium, I might as well dip my toes into the virtual real estate world.

Metaverses May Set the Tone in the Future

The key to any blockchain’s success is interest, and keeping things relevant is one way to fulfill this need. Blockchains are really good at keeping permanent records of transactions, but they will only succeed if there is an active community making constant transactions in perpetuity.  Therefore, it seems that a blockchain without a metaverse is a goal in search of a problem.

What better way to continually manufacture relevance than to attract a future species to grow with your ecosystem inside your metaverse? With the creation of this new species, virtual humans— folks who create an avatar and start interacting with others on the digital platform—have more excitement and options inside their virtual world. Depending on many factors such as the interest level, quality of the metaverse infrastructure, and diversity in virtual activities, the metaverses will compete against each other to retain more virtual humans that spend more of their currency in the long run.

Maintaining interest in a thriving society will ensure tremendous support for the network it rides on top of and fulfill the critically needed volume of transactions to propel the blockchain forward. This movement will ideally create the network effects needed to maintain all fiscal systems. For instance, there are marketplaces on the Cardano network where people can buy things. At this point, there aren’t many items other than land for sale, but eventually, I can see virtual shoes, shirts, pants, glasses, hats, and even dragons. Why not?  In this case, you could buy a dragon and fly around the world—in the virtual, of course.

Why Didn’t I Pull This Trigger Earlier?

So why am I coming to the Metaverse party a little late? Early on, I wasn’t thinking about the single purchase gas fee being too much. Instead, I was imagining myself getting frustrated with the format of ETH-based metaverses in general. To me, if each transaction costs some ETH, a city full of transactions doesn’t ring true. No matter how small each transaction was, knowing myself, I would cringe paying all those fees.  

The economics of those early universes didn’t work then, and I haven’t looked back since because I believe everything in those universes will cost a lot no matter what. Shelling out a ton of ETH simply isn’t practical for me, particularly since I am HODLing ETH and don’t have much to spare.

As ETH goes up in USDT value, I’m going to see just how awful those early transactions were. Though they said I was only spending $10 of ETH or even $1 of ETH, it was when ETH was worth far less. So as of now 0.000631 ETH = $1 but back then $1 = 0.025 ETH. For comparison, 0.025 ETH now is worth $39.64 – so that means that for every $1 in ETH I spent back then, it was as if I spent $40 today. Ouch!

Imagine if I bought land and paid a full ETH in gas fees alone on top of all the MANA or SAND  I needed to pay. No thanks! This is the reason I didn’t pull the trigger sooner.

TIME.com says ETH will be back above $4,000 by year’s end, which is a 60% gain over its price today of $1589. So if I had spent all that ETH for all those transactions, I might have sunk my future ETH profits early on.

Digital Marketplaces

Through this next digital transition, the problem isn’t variety, as there seem to be metaverses popping up everywhere. These systems create lasting transactional volume and encourage long-term growing interaction with the blockchain by having things for sale in a marketplace daily. This activity is the core of any metaverse; the nominal fees the metaverse creator receives should eventually cover their cost of developing new features and properly supporting the existing environments.

Let’s take the concept back to something tangible like the Facebook Marketplace. There you can find local items for sale from other individuals like on Craigslist. This format resembles the same structure as a metaverse. You can scroll around looking for things you want or need, and instead of meeting and exchanging them in the real, they are virtual items you buy that get added to your inventory as NFTs. You pay for these items via the blockchain in the common currency— in my case, with ADA.

Once I immerse myself in their world with their tools, I must play by their rules. Perhaps I can’t give my Avatar clothes unless I buy them, and that might cost a little ADA or SAND or MANA, depending on which metaverse I’m in.

No matter the cost, the fee for the transaction on the Cardano network is measured in ADA and is low enough to not ever matter. This means that it’s easy to understand how much something costs. Just imagine the fee as a sales tax in the same currency.

Just to make a point of clarity here, let’s assume MANA, ADA, and SAND all equal $1 and assume each metaverse requires you to buy a shirt (maybe even with the NIKE swoosh on it) that costs 10 of that metaverse’s currency. This means you’ll need to pay a shirt vendor (perhaps NIKE’s digital division directly) 10 SAND in the Sandbox, or 10 MANA in Decentraland, or 10 ADA in Virtua.

Each of the SAND or MANA transactions has a fee starting around $1 of ETH, but the entire ADA transaction costs only 10.01 ADA.  It’s far easier over time to use non-ETH-based metaverses as you don’t need to maintain a secondary asset to pay gas fees.

This is why I’m focusing on the non-ETH metaverses. ZIL is next!

Buying an NFT

An NFT is a Non-Fungible Token, basically, a fancy way of saying it’s a one of a kind, but there could be others in the same series. Each NFT has its own birth (minting) and transactional history. I wanted to prove to myself that buying an NFT was really easy, and it was. All I needed to do was push a few buttons and wait a little bit for the Cardano Contract to complete its steps.  Here’s sort of what the contract looked like.

This is an edited version of my transaction on the blockchain. I messed with the numbers in the image just enough so no one should be able to reverse-engineer this transaction and figure out my ADA address.

Notice how a blockchain contract is a coded representation of a transaction. There’s no mention of my name or the actual asset I purchased. This is a standard contract. Once it has run its cycle, I’ll get rewarded with the NFT that represents the plot of land. Then my ADA will be deducted from my wallet and deposited into the seller’s wallet minus the metaverse fee. It took about 10 minutes to run its course and execute each step; then, I was awarded the NFT in my account.

At some point in the future, I’ll most likely start to see some tools in my account. I can use these tools to see where my land is and get involved in building on it. No doubt that will take more ADA!

Here it is

My first land deed is virtual, given that I don’t own any property in the real.

I’m apparently on CARDANO ISLAND— woot!  

I got a Small “Uncommon” Cardano plot, and it looks like there are 1800 of these land plots total, which is not too bad for scarcity overall. Cardano Island is on the first “planet” of this metaverse, so I suspect there will be many more. However, the first release of an NFT collection is usually the most valuable overall.

Apparently, I also get a cave. I have no clue what that is, but I suspect it’s a gallery where I can list NFTs for sale. Maybe I can hang the Stephen Colbert NFT I bought there?

What Can I Do With My Purchase?

According to the message below, it appears I will be able to mine for things on my plot.

Here are the land stats.

I think the percentages indicate how many other properties have the same things. I can’t help but wonder why I would need “sticky goo.” But I know iron and wood are on the land, so I’m thinking I might be able to use those to build with and not have to buy a lot with my ADA in the marketplace. That’s why I went for a slightly more expensive plot of land. The “common” land didn’t have iron. Hey, maybe the “sticky goo” is what will hold things together if I were to build a wall or something? I guess I will eventually figure this out.

I also read that I can hire a Land Bot. I’m hopeful that I can actually give some meaning to hiring a “bot army” to work for me. I think they will most likely be used to mine the land and sell the resources to recoup my ADA spend. Who knows, honestly? But damn, they are cute looking, and I want one!

My Long-Term Plan

I’ve mentioned a bit about what I can eventually do with my purchase in terms of building and growing it, but you might be wondering about my long-term plan. At some point, I will sell. But I don’t intend on flipping this purchase right away like some of the other 1799 people who bought land with these same specs. Most people buy NFTs all over the place and immediately list them for sale for a great profit. But I’m in this one for the long haul; I’m a HODLer. I mostly want to show people what’s out there in a metaverse. And yeah, I’m also curious myself as this experience is new to me, too.

I’m not promoting Cardano or any other metaverse; I just think it will be interesting to see what happens, and the risk of losing $6 is well worth it to me. I can always pick up more ADA with my ETH after the ETH 2.0 merge.

Next Steps

For now, I can’t do much with this plot other than somehow figure out how to add it to my coded portfolio so I can track its value over time. I’ll need to watch the project and go online once there are tools ready and an interface exists that I can use to experience my new virtual land. When I do, I’ll share it with you, but for now, I don’t anticipate that this next step will come this year, though I’d be glad to be wrong.

Since ZIL is appreciating, a lot of hype is generating for their metaverse, So, I really want in on the ZIL metaverse Metapolis. I’m going to look into that as soon as they start doing something because I happened to find out that I own 10k of these buggers. 

But right now, each ZIL is only worth 4 cents. Spending them might be tricky because the amount needed to buy stuff will most likely be much higher than in the ADA metaverse since each ADA is worth around 50 cents. Only time will tell. I’ll have to wait until Metapolis is open for business, and I’ll certainly report back.

I look forward to this virtual adventure, and I’ll be poking around to see if I can find any other metaverses where I can explore in the virtual.