It’s no secret that virtual property is a hot topic in the blockchain community.
With the explosion of projects like Next Earth, Decentraland, and Earth 2, it’s easy to forget that virtual property predates these more mainstream blockchain apps by decades. In fact, most of the concepts we take for granted today were first introduced in MUDs (Multi-User Dungeons), or text-based RPGs which date back to the 1970s.
From the virtual properties of old to today’s blockchain-based virtual worlds, there are a number of advantages over physical, real-life property.
Buying a new home today is notoriously difficult, to the extent that many young Americans never expect to own a home. Today, there are more renters than at any time since 1965, driven by rising home prices, lingering fears from the housing crash, and gargantuan amounts of student debt.
By not being able to afford physical real estate—which is a financial investment—billions of people are missing out.
Virtual property, on the other hand, brings complete accessibility. Anyone, anywhere in the world can tap into this new investment, without dropping huge sums of money on a down payment, or taking out massive loans. It’s a way for the cyber citizens of the future to acquire property at a time when physical prices are soaring and inaccessible to most.
2. Immutable data
Paths, inventory, transactions, contracts… everything that happens on a blockchain network is immutable: there can be no change or deletion of any of this data. This provides an extra level of security that we don’t have with our possessions here on the physical Earth.
This means you know what you buy today in 2021 will still be valid 500 years from now. On the other hand, the same physical property will change hands through theft, bribery, and corruption innumerable times.
In Haiti, an earthquake destroyed 60 years’ worth of property records, leaving thousands of Haitians without proof of their property ownership. Meanwhile, the Amazonia is mired by land ownership conflict, while in Myanmar, the government seizes farmers’ land outright.
Throughout American history, the government has seized private property using what’s called “eminent domain.” In fact, eminent domain is a global issue, in which governments use their power to seize private property.
In the decentralized virtual world, ownership simply cannot be seized by a central authority.
3. Transparent records
All transactions related to your virtual assets are transparent and easily accessible online through blockchain explorers. It means that if you sell a virtual town today for 200 ETH, it will appear as an open transfer in the Ethereum blockchain forevermore.
In a virtual world, the ownership of land and assets are known, and provably so. There can also be a finite supply of non-fungible tokens, down to the last “rare” item.
In the physical world, records are sparse and opaque. Who owns what? Since when? These questions are difficult, if not impossible, to answer in the physical world, unless you’re part of the centralized authority in that area.
4. Smart contracts
With blockchain-based virtual property, you can use smart contracts (a program stored on the blockchain) to allow for automated marketplace exchanges and other functions like creating new assets.
Any violation of these smart contracts would be impossible, given the immutability of the contract on the blockchain.
Traditional real-world assets will always be subject to the whims of governments or corporations. Blockchain assets are forevermore under your control and free from the corrupting influence of institutions.
Have you ever had a dispute with a landlord or housing authority? With smart contracts powering virtual property, contracts are transparent, verifiable, and automatically enforced.
Do you know your neighbors? Your community? Many people don’t. On the other hand, crypto communities are home to incredibly lively discussions and social networks, forming tight bonds between people working on a common goal.
In a virtual world like Next Earth, one common community goal is environmental contribution, whereby a portion of all transactions is donated to environmental charities. With virtual worlds, it’s extremely easy to join and support projects that you believe in.
Ultimately, virtual land is obviously not going to replace the physical world, but it’s another step toward building our own digital planet.
Where do we go from here?
The exciting thing about blockchain-based virtual property is that it holds the promise of enabling a whole virtual world, akin to concepts like Ready Player One.
This means that participants won’t need to trust any third parties when exchanging assets or conducting business with other users in a fully transparent fashion.
You don’t need any special technical knowledge to participate — anyone can become their own estate agent and potentially make money trading assets, all while building a novel virtual world.