Why Mark Cuban is Not a Fan of ‘Metaverse’ Digital Real Estate, and You Probably Shouldn’t Be Either
The Idea of the ‘Metaverse’ Has Been a Hot Topic Lately
So popular is the concept that the company formerly known as Facebook changed its name to Meta Platforms to reflect the company’s main focus more closely.
While the term “metaverse” encompasses a wide array of online activities, it boils down to a digital world that aims to imitate the physical world as much as possible.
This digital world has many things that the physical world does, including social activities, gaming, business pursuits and real estate ownership. It is this last topic that has generated much controversy in recent months. While physical real estate derives its value from its scarcity (and location), digital real estate has no scarcity and no geographical benefits.
This hasn’t stopped companies from spending an extraordinary amount on digital real estate. Curzio Research recently set a record by purchasing a digital plot of land in the TCG World metaverse for $5 million, narrowly edging out the $4.3 million paid by Republic Realm for a spot in The Sandbox. Industry proponents believe these investments will pay off handsomely as these metaverses grow and develop.
The CEO of Tokens.com, Andrew Kiguel, commented:
“This is like buying land in Manhattan 250 years ago as the city is being built.”
Not everyone is jumping into the Meta Platforms (NASDAQ: META) metaverse land grab, though. Celebrity Shark Tank investor and self-made billionaire Mark Cuban has been particularly critical of the phenomenon.
Owing to the lack of scarcity, Cuban believes digital real estate is a bad idea at this time, with the Shark Tank investor saying:
“The worst part is people are buying real estate in these places. I mean, that’s just the dumbest shit ever. It’s not even as good as a URL or ENS because there’s unlimited volumes that you can create.”
Having built his fortune on being an early adopter of various technologies, Cuban has a keen eye for promising opportunities. Cuban’s opinion that the limitless nature of digital real estate makes it essentially worthless should be weighed heavily by investors looking to enter the industry.
