Metaverse is a Scam! You can’t own Anything Despite Spending Millions

Is metaverse technology of the future or just a scam? In order to make a profit will you end up losing it all?

The metaverse is the talk of the town these days as it is a growing topic in tech. Using a blend of technologies like virtual reality, augmented reality, blockchain, and artificial intelligence, metaverse users interact with one another using avatars to represent their real selves. From gaming to fashion and corporate to real estate, many sectors are actively using this technology. Social media websites such as Facebook (now Meta) are also pushing into the space with Horizon Worlds and are planning to hire 10,000 people in the European Union over the next five years to help build their vision of a metaverse. But it is really the technology of the future or just a scam? In order to make a profit will you end up losing it all?

In 2021, an investment firm bought 2,000 acres of real estate for about US$4 million. Normally this would not make headlines, but in this case, the land was virtual. It existed only in a metaverse platform called The Sandbox. By buying 792 non-fungible tokens on the Ethereum blockchain, the firm then owned the equivalent of 1,200 city blocks.

But did it? It turns out that legal ownership in the metaverse is not that simple. The prevailing but legally problematic narrative among crypto enthusiasts is that NFTs allow true ownership of digital items in the metaverse for two reasons: decentralization and interoperability. These two technological features have led some to claim that tokens provide indisputable proof of ownership, which can be used across various metaverse apps, environments, and games. Because of this decentralization, some also claim that buying and selling virtual items can be done on the blockchain itself for whatever price you want, without any person or any company's permission. But the problem doesn't end here as there are some problems associated with decentralization like:

External Factors

The trade union movement, market uncertainties, and government intervention might make it impossible to benefit the most from decentralization.

Narrow Product Lines

Decentralized product lines need to be adequately broad so that autonomous units can flourish within the same. This might not be of much help in small business houses having narrow product lines. Lower levels in the organization also lack competent managers thus adding to the difficulty quotient.

China's Warning

The China Banking and Insurance Regulatory Commission has warned the public about fraudulent Metaverse projects. The statement emphasizes that the movements surrounding the Metaverse have made it a prime target for scammers who illegally raise funds in the name of such projects and steal everyone's hard-earned cash.

Metaverse properties are still a niche interest, with a limited market

Though one with a very passionate fan base, metaverse real estate is an absolutely niche market and everyone should keep this in mind before putting their resources. It's not a dead market for sure because for some numbers, as of Dec. 21, 2021, NonFungible.com reported a total of 128,902 sales during the prior 365 days for metaverse properties (this also includes avatars). By comparison, there were 5.64 million existing homes sold in 2020, according to the National Association of Realtors.

If a metaverse platform folds, your investment fails with it

No one wants to think about their investment failing, but there's always a risk with investing in anything, and we might as well talk about the elephant in the room: The risk with metaverse real estate is considerable and worse, if a metaverse platform folds, your investment just disappears. Unlike real-world real estate, where you can always fall back on the fact that you still have this piece of land you can touch and stand on, a metaverse real estate can disappear entirely if the platform fails financially.