Decentraland is probably the most developed and popular digital world when it comes to digital real estate at the moment, where thousands of users buy and sell – for as much as $900,000 – virtual real estate with freedom and ease, in addition to the security provided by blockchain technology.

So, is virtual real estate legit?

Yes! More and more investors are starting to show great interest in digital lands as a new opportunity to generate income because they have it clear; virtual worlds have enormous potential to display advertising, sell products and services, organize events, and more.

Today, we’ll talk about Decentraland and virtual real estate, what they are, what possibilities they offer for investors, and what the future holds for this new technological trend. Let’s get started.

What is Decentraland?

Decentraland users do not like Decentraland being referred to as just another videogame. And they’ve legitimate reasons.

In reality, Decentraland is a virtual reality platform that works on the Ethereum (ETH) blockchain. It’s a platform that allows you to work, build, and create things.

And what can you create in Decentraland?

Virtual worlds. And this is not a reason for tagging it as another Minecraft clone.

Although Decentraland obviously has characteristics of a videogame, it has greater possibilities; users can carry out a wide variety of actions starting from the purchase of virtual parcels of land and the subsequent construction on them. Just as you would do in the real world when buying a piece of land.

But contrary to what happens with video games like “World of Warcraft” or “Minecraft,” Decentraland doesn’t belong to its developers, but to the users themselves, since it’s a “public” digital platform in which there is no central organization that enforces rules. The entire economy of Decentraland is generated and managed by its users.

This means that any user can freely buy and control the content of their digital lands while generating income through construction and other additional activities.

All of this is possible thanks to the use of blockchain technology which allows for the ownership of any plot of digital land without the possibility of falsification.

The idea for Decentraland originated in the minds of Argentines, Esteban Ordano and Ariel Meilich in 2015, but the project took two years to complete its development. Finally, in August 2017, the entrepreneurs held an Initial Coin Offering (ICO) with which they raised 86,206 ether – 26 million dollars at that time – in exchange for MANA tokens, the Decentraland token.

The funds were managed by the Decentraland Foundation to promote the development of the platform, at the same time that they also put into operation the decentralized autonomous organization (DAO) to deliver management of the project to its users.

How does Decentraland work?

In Decentraland, users can interact with portions or parcels of virtual land called LAND. These plots of land can be purchased to “build” on in a similar way to what happens in Minecraft – although many users also resell them.

In reality, each portion of LAND is nothing more than a non-fungible token or NFT on which it’s possible to create videogames, 3D objects, applications, digital services, dynamic 3D scenarios, etc. Each LAND parcel measures 16 x 16 meters, but doesn’t have a height limit.

This means that if you want to build a mall in Decentraland, you’d have to acquire a good number of parcels to be able to finish it. In addition, LAND is a scarce resource, something necessary to increase demand and incentivize the creation of quality content.

In order to buy LAND, you must have MANA, Decentraland’s native token, which is used mainly to buy these plots. When many LAND users form communities dedicated to a common theme, these communities are called States or Districts and just like you’d vote in your real-world community, users can also vote in Decentraland to solve any problems that may arise over time.

Now let’s talk about MANA

As I already mentioned, MANA is Decentraland’s native token. It’s an ERC-20 token that is used first of all to buy LAND plots, but which can also be used to pay for goods and services in Decentraland, and the auctions of “Genesis City,” a city created by a group of Argentine developers.

LAND portions were originally sold by Decentraland’s own development team, with a starting price of 1,000 MANA, but now their prices range from 11,000 to several million MANA.

What is virtual real estate?

Before answering this question, it’s important to understand what the metaverse is. Basically, the metaverse is a shared virtual or digital space that aims to imitate or reproduce the characteristics of the real world. This metaverse is packed with millions of possibilities for anyone to fulfill their fantasies. Taking the Minecraft example again, users can do almost anything they can think of, but with the difference that in the metaverse, there are almost no limits.

In fact, Minecraft is a kind of metaverse, only that in this case, the environment depends a lot on the developers in order to for it to evolve.

In the metaverse, users can buy virtual real estate, just as we would when buying a piece of land in the real world, with the difference that the portion of virtual land that you buy in the metaverse, only exists in that specific metaverse.

Many of these virtual worlds have their own cryptocurrencies, as it happens with MANA in Decentraland, and several companies are already working on the possibility of creating a single and global metaverse that allows communication and interaction between all the metaverses out there – a new kind of 3D Internet?

Another difference with videogames is that in the metaverse, there is no predefined goal; the idea is that users can have social and economic interaction with each other in a virtual and open world with near infinite possibilities. The use of Blockchain technology guarantees the legitimacy of commercial transactions, allowing users to be real owners of their own avatar, plot, building, store, etc.

Blockchain and NFT technologies help to give a sense of real belonging to each user. In other words, they are proprietary.

For example, a user can build a house, convert it into an NFT token, and then put it up for sale on the market. If another user buys the house, he can then place it on his own virtual plot and add other NFT objects to it.

And not only that, in these virtual spaces, be it a house or a football stadium, it’s possible to experience the feeling of presence and social interaction at parties, walks, festivals, concerts, sporting events, dinners, games, etc. All of this allows the development of a virtual economy with the potential to extend into the real world, as is the case with cryptocurrencies and NFTs.

Is virtual real estate legitimate?

Many people were asking the same question years ago when Bitcoin appeared for the first time and later other cryptocurrencies followed it – and recently with NFTs.

The short answer is yes. Virtual real estate is a new investment opportunity.

As with real-world real estate, in the metaverse, users and investors can exchange, buy and sell virtual real estate as if it were just another NFT token. The difference is that when you buy a virtual plot of land, instead of acquiring an NFT artwork and a private key, you acquire a digital space to do and create whatever virtual reality allows you.

Thanks to blockchain technology, these virtual terrain tokens have a recognizable value that users can exchange for products or services from the metaverse itself, as well as from the real world. In addition, everything is publicly registered.

I do believe that Decentraland has probably laid the foundations for a new business model of upcoming developments in virtual worlds.

Why are people buying virtual real estate?

Many people still doubt whether they should invest in this. Consider the following: the price of virtual real estate continues growing and there are still no clear signs that the opposite will happen. This is the same that happens with any new technology in which some visionary people see economic potential; there is a race in which everyone wants to get the best positions.

Just look at how the demand for NFTs has increased in the last two years. More and more people want to enter this world, which causes prices to rise due to the shortage of virtual land. In fact, the demand for parcels in central areas in some of these virtual worlds is growing considerably, which is an indicator of where the market is going.

As I said at the beginning, investors know that virtual spaces offer near endless possibilities to monetize them and generate income in the medium and long term. Blockchain, NFTs, and virtual real estate are taking society to the next level of information technology.

It’s more than likely that before long, an increasing percentage of people will spend more time at home visiting galleries, shops, and events in virtual reality.

What can you do with virtual real estate?

As indicated in the Decentraland whitepaper on its official website, users can develop the following activities.

Applications

Users can develop applications in a 3D environment to provide interaction with other users.

Content Curation

This is possible thanks to the development of communities around large concentrations of virtual parcels, such as neighborhoods, parks, etc.

Advertising

Many brands are buying and renting virtual spaces to put up their billboards.

Collectibles

The NFT collectibles fever has spread to virtual worlds.

Social connections

The metaverse presents a new way of interacting and relating that goes beyond ordinary social networks.

But the possibilities are near endless. As with any property in the real world, what makes the difference in the virtual world is what users do with their properties, including:

Art galleries

Where different artists can display their NFT digital artworks.

Videogames

From Tetris clones, to 3D platforms in the style of Mario games.

Musical events

Where your favorite nasheed singer, entertainer, artist, public speaker, or favorite sheikh (Islamic scholar), can perform, teach, or speak in front of potentially unlimited audiences.

In summary; the virtual world offered by the metaverse allows interaction between brands and potential consumers.

Is Decentraland a good investment?

For all the good it has to offer, the world of virtual real estate also presents challenges for investors. As with any type of investment, this is an issue that must be carefully analyzed in order to avoid mistakes.

The market for NFTs continues growing, which augurs the same for digital lands, but there is still a long way to go to achieve the mass adoption of this technology. As with volatility in the cryptocurrency market, the value of NFTs is also volatile. However, the value of a virtual land also depends on how its owner develops it.

In this sense, there is no doubt that Decentraland will continue growing and expanding since virtual real estate represents a new opportunity with a high economic potential that in the near future could be worth much more than it is now.

As always, if you’re planning to invest, just remember to always do research and take proper precautions.

How can you buy virtual real estate on Decentraland?

Currently, there are two ways to buy parcels on Decentraland, either by purchasing directly on its marketplace or through a separate platform. Today, I’ll talk about the first option, since although the second is similar, it depends on the specific platform.

1. Get a wallet

Remember that the first thing you’ll need is a crypto wallet that can be integrated into your web browser and allows you to store ERC-20 and ERC-721 tokens. Naturally, you must have some MANA – it can also be Ether in case of buying outside the marketplace – in your wallet to be able to make the purchase. You can buy this with fiat money in one of the many exchanges available on the Web or in Decentraland itself.

2. Sign up for Decentraland

Go to the main page of the platform and register with a valid username and password.

3. Choose your LAND

Once you have registered, go to the purchase section and select a LAND that you liked. Before making the purchase, you’ll be able to see information related to your LAND in the corresponding section, including its price in MANA and its location.

4. Make your purchase

Once you have selected the plot to buy, you must connect your wallet with the Decentraland marketplace by logging in to your Ethereum account and making the payment according to the indicated instructions.

Is Decentraland halal?

Is Decentraland halal? Yes, Decentraland is halal. Decentraland is a platform that allows the user to perform many operations in what is called a “virtual world” as if they were in the “real world” and this is permissible. However, it is important for the Muslim to remember that in the Quran Allah says that He is, “Lord of all the worlds”. This also includes virtual worlds. This means that Muslims must uphold the same Islamic principles of “muamalat” (just dealings with people in a social and economic manner) in any world they participate in.

As for MANA crypto, scholars who generally rule that cryptocurrency is halal would also consider MANA as halal. MANA is the in-world currency for Decentraland. It allows players to purchase land and other goods and services on the Decentraland platform.

At this time, even though MANA is considered currency for the Decentraland platform, scholars would normally classify MANA as an asset.

Conclusion

It looks like virtual universes are here to stay. You can easily verify this thanks to the enormous growth and popularity that the different metaverses, especially Decentraland, are gaining. In fact, since investors and entrepreneurs have realized the enormous possibilities offered by this new trend, it seems that every month new competitors emerge, which are already generating millions – there we have the case of Axie Infinity.

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Since the earliest civilizations, humans have always been attracted to collecting “special” objects to which they have assigned a certain value, for different reasons. In the past, this collecting mania could be reflected in any physical object, be it coins, artwork, vehicles, even rocks.

But we’re in the middle of the digital age and now, this collecting fever has a new exponent that’s causing a true sensation among lovers of the rare and exclusive: Non-Fungible tokens or NFTs.

But what exactly are NFTs, how do they work, what can you do with them, and most importantly for investors, do they have a future?

Take a look at this quick guide to find the answers to all these questions.

What are NFTs?

Non-Fungible Tokens (NFTs) are basically tokens based on cryptography that only exist on a blockchain. These tokens have unique characteristics that make them unrepeatable. These tokens can represent unique assets from the digital world or digitized versions of objects from the physical world.

In addition to this, NFTs can also be used to demonstrate the authenticity and ownership of different assets on a blockchain, acting somewhat like a digital fingerprint.

NFTs are different from fungible assets, that is, objects – both physical and digital – that can be exchanged with other objects of identical properties.

We have a good example to illustrate this in money; it doesn’t matter whether it’s physical like the dollar, or digital like Bitcoin (BTC): you can easily exchange one Bitcoin for another Bitcoin. This is possible because 1 BTC keeps the same value when you exchange it for another BTC; they’re equivalent and have exactly the same properties.

Non-fungible assets can’t be substituted in the same way as fungible assets because they are unique, unrepeatable, and have different characteristics.

Another good example of this is in artwork from famous painters.

You can see each of those paintings as a non-fungible token because although they’re all paintings, they’ve different properties and value; they’re unique, and you can’t exchange one of these paintings for another because there is only one original painting.

The good news is that these assets can also be represented in the digital world in the form of crypto tokens; thanks to information technology, it’s possible to “imprint” special marks that make each one of them unique.

The basis of NFTs are smart contracts

Today, virtually anything can be represented digitally, and the Ethereum blockchain is perfect for it. In fact, it’s this blockchain that has the highest percentage of NFT tokens on the market, due to the use of smart contracts.

A smart contract is a small program that can be created within a blockchain, which allows you to tell the network that it should store certain information and perform certain actions. In this case, anyone with the necessary knowledge can create a smart contract for an NFT token, assigning it the characteristics they want with enormous creative freedom.

In this way, it’s possible to store anything within an NFT token, and the smart contract within the blockchain will ensure that it works correctly at all times.

What can I do with NFTs?

Although NFTs began essentially as objects for entertainment and collectibles – KryptoKitties – today the market has expanded enough to find practically infinite uses for this technology. Let’s take a look at some of these use cases.

Digital Art

It’s possible to store information from artwork, jewelry, and other artistic objects on the blockchain in the form of NFTs.

This not only helps in motivating updates, circulation, and sharing through several markets, but it also helps in tracking unique digital art in the form of NFTs to verify its provenance, authenticity, and scarcity.

In fact, NFTs are already being developed for artwork such as paintings and sculptures that include professional certificates. The owner only has to show the unique information stored in the corresponding NFT to demonstrate that he is the owner of such work.

It’s easy to trace this digital certification because the ownership of these assets is already registered in the blockchain.

Video games

The creation of NFTs for different virtual objects from videogames allows you the in-game exchange of such accessories for points or digital currencies, and even for real money. This is something that we’ve already seen in the past, but blockchain and NFTs are doing a great job in creating and improving this online ecosystem or virtual economy.

When you play one of these games, you can obtain items such as weapons, clothes, skins, etc. These items will have their own related NFT, and they’ll be stored on the blockchain.

In this way, all the operations and properties related to such items will be registered in a public database, avoiding the possibility of cheating by malicious users. Some examples of such NFT-based games include:

• Sorare: In Sorare, you can purchase NFT tokens that represent professional soccer players. You can later use these tokens to play online fantasy games.

• Decentraland: A virtual world pretty similar to Second Life, where you can buy, sell, and exchange ERC-721 tokens and participate in different in-game events such as art shows, games, concerts, etc.

• Gods Unchained: A turn-based collectible card game where you can compete against other opponents.

Digital tickets

Many companies are using NFTs to represent digital tickets for different types of events, such as musical concerts and sporting competitions. These NFT tickets represent your unique permission to participate in those activities at a specific time and place, and you can’t convert this right into something else.

Using NFT technology ensures that each ticket is unique and valid at the time of use so that this will prevent the use of false tickets.

Identity tests

NFTs are also being used for identity authentication to help in keeping a complete record of personnel in public and private organizations. The technology can be applied to birth certificates, passports, and driver’s licenses, just to give you an idea.

These types of NFTs cannot be exchanged, but it’s perfectly possible to implement access control to obtain the information stored in them. This is a very practical application because it allows the interaction with NFTs so that organizations can obtain information about any individual, such as their educational level, for example.

On the other hand, an individual can do the same, requesting identity information from a doctor to verify their professional level.

Digital certificates

NFTs can be used to store information about different types of documents such as contracts, patents, and other similar certificates on the blockchain. This is an efficient way to make these documents traceable and prevent counterfeiting.

These digital certificates can store attributes such as intellectual property values, copyrights, etc. When it’s necessary, you can verify the validity of these documents using electronic signatures.

Domains

Domains are unique and can be very valuable, so it can be very costly and time-consuming to find the most appropriate for you. It’s possible to link domains to NFTs to create a public record for tracking purposes. This can help avoid third parties in domain trading, which also contributes to reducing costs due to speculation.

Some NFT coins to keep an eye on

Enjin (ENJ)

Enjin is a platform that allows individuals and organizations to create their own NFTs. In order to mint these virtual tokens and objects, you must acquire and block ENJ, Enjin’s cryptocurrency.

Decentraland (MANA)

Decentraland is a virtual world similar to The Sims or Minecraft in which users can buy and sell digital real estate while exploring and interacting with this virtual world. The game uses two tokens: LAND is an NFT token that represents unique parcels of land within the game, while MANA is a cryptocurrency that facilitates the purchase of LAND, as well as other virtual goods and services.

Axie Infinity (AXS)

Axie Infinity is a Pokémon-like virtual pet world that runs on Ethereum. Players can fight, collect, raise and build a kingdom for their pets (Axies) and have the AXS token, which is used for the governance, staking, and payment system.

WAX (WAX)

WAX is a platform that allows its users to create virtual markets to buy or sell digital items, especially games. For these transactions you must use the internal currency called WAX token.

Cardano (ADA)

Cardano is a third-generation blockchain platform with a scientific approach that promises great improvements to the crypto ecosystem and that, thanks to the use of smart contracts and dApps, will offer an ideal environment for the development of NFT tokens. All this is governed by the use of its cryptocurrency ADA.

Origin Protocol (OGN)

Origin is a platform very similar to Enjin, but that not only serves for the development of NFT tokens but also allows users to earn money that supports the development of projects within the platform through a model based on DeFi. Its internal currency OGN has the function of regulating the economy and the future of the platform.

Do NFTs have a future?

NFTs are a very recent technology in the crypto space. Although they have existed almost since the beginning of Bitcoin – does anyone remember the Colored Coins? – It wasn’t until the beginning of 2020 that a real craze for these digital assets began.

So much so, that almost every day it was possible to read in the news about a new NFT created and sold for hundreds of thousands and even millions of dollars in a matter of hours.

The truth is that, according to history, when too much money moves around something new that generates a lot of hype, the risks also increase exponentially where scams and the risk of a bubble can be the order of the day.

However, even with all the madness surrounding NFTs, the reality is that this technology has many practical uses, as you may have read in a previous section.

The blockchain technology that makes NFTs work provides them with numerous possibilities to position themselves as digital objects of common use; as technology advances and matures, it is very likely that more and more people will become familiar with the use of NFTs.

The problem with this is that being such a “new” technological phenomenon, this maturing process takes time, and meanwhile, it seems that the bubble has already started to deflate, as we can read in the news.

So, as we always say, before jumping into the world of NFTs, you should proceed with proper education and caution before taking action.

Are NFTs halal?

Are NFTs halal? Yes. NFTs are nothing more than cryptographic tokens on a blockchain that have unique characteristics that make them attractive to collectors and investors or serve some purpose that the NFT can be used for. So long as the characteristics of the NFT do not convey or promote anything that is considered haram by the sharia such as, pornography, illegal drugs, cruelty to animals, anything that promotes hatred towards Islam, etc., then the NFT is permissible to create, use, and earn income from.

Another excellent article to read on the permissibility of NFTs would be, What are NFTs? by Mufti Faraz Adam.

Conclusion

NFT tokens are another technology option within the wide range of possibilities offered by blockchain. The number of practical applications to the real world is enormous, with all kinds of applications for identity, security, business, arts, and entertainment in the digital world.

Of course and as always happens, there are many people who simply want to make some money with new technologies as an investment, but like everything related to crypto-assets and with any investment in general, you have to take precautions before investing.

What we see now is just the tip of the iceberg of what can happen around NFTs – and maybe cryptocurrencies as well – but insha’Allah, in the future, surely non-fungible or NFT tokens will continue to surprise us with their enormous versatility and possibilities. There are a lot of people banking on that.

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