What is virtual real estate and how do NFTs play a role?

Virtual real estate is all the rave today. You have probably heard news stations talking about people paying millions of dollars in Ethereum or Solana cryptocurrency for the chance to purchase parcels of land in virtual worlds like Decentraland, The Sandbox, CryptoVoxels, and Somnium Space. But what the heck is virtual real estate and why is it so hyped right now? How do NFTs play a role in this space?

Virtual real estate is simply parcels of land bought, sold, and sometimes rented in virtual worlds. Buying these parcels of land allows the owner to essentially do whatever they want on their plot of land. They could open up a virtual business, advertise their Web 2.0 or real life business, or sell their land for a potential profit in the future.

Now how do NFTs play a role in this space exactly? Well NFTs are simply what facilitates these virtual real estate transactions. You see – virtual lands are actually purchased and sold as NFTs. The same way that Bored Ape images are purchased and sold as NFTs, virtual lands are as well. NFTs are what actually facilitates ownership of virtual real estate parcels. Owning the “NFT” of the land is what grants you rights to the land as the owner.

So is virtual real estate the future? Maybe, but maybe not! This will entirely depend on if the same virtual worlds that are active today will also be active five or ten years from now. Right now, it seems that Decentraland, The Sandbox, CryptoVoxels, and Somnium Space are dominating the virtual world industry, but maybe they won’t in ten years! Only time will tell if these are solid investments or not.