The Value of Digital Land

It's hard to understand why Digital Land would have value

There is a reason physical land has value. It’s scarce. If you buy a plot of land and build a house on it, I can’t also use that land unless I find a way to knock your house down. And because of seas, rivers and national borders, the amount of land available to both of us is finite.

In the metaverse, there are many, many platforms selling digital land and sometimes this digital land can cost a lot. But in the metaverse, there is always another platform to move to or more land to be created. So what gives digital land value has been a big question echoing around the metaverse.

Since many people have been thinking about this point, one of crypto's most active VC firms has weighed in

a16z's Take

Proximity is still important in the Metaverse

There is only so much digital land that will be close to a major venue where lots of people gather in the Metaverse. If you set up a store close to a major venue, it'll likely boost your sales... A LOT. So proximity to important places will still add value in the Metaverse.

In fact, it might be MORE important in the Metaverse

Proximity might actually add more value in the metaverse than it does in the real world, because in the metaverse you can reach a global audience. If you have a shop near Times Square, you will get foot traffic from many tourists and residents of New York. If you have a shop near Times Square's metaverse equivalent, you can make sales to anyone in the world.

But proximity is irrelevant when we talk about middle to long distances

In the Metaverse, anyone can teleport, so there is no such thing as a long journey. This means that the value of Metaverse land will likely depend on what's right next door, rather than depending on the larger geographical picture of that Metaverse.

The Metaverse will be dispersed

a16z predicts that the Metaverse will not be a winner takes all space. There will be many universes to travel between. And in each digital universe, there will be many different pockets and clusters where there is lots of activity.

Town Planning might help for Virtual Land - Yes, Really

We've discussed the importance of proximity in the Metaverse. Because of this, it might make the most sense to group similar or complementary types of activities near each other to improve user experience. This would require the kind of planning and centralised organisation that we see from real city councils.