Virtual Currency Followed by Virtual Real Estate... People Immersed in the 'Metaverse' [Tech Talk by Lim Ju-hyung]

Virtual Asset Investment Boom in Virtual Real Estate and Virtual Art
Expectations for 'Metaverse,' the Virtual Reality of Cyberspace
Popular Culture Using Metaverse... Roblox, aespa, etc.
Paul Krugman Calls It a "Typical Pyramid Scheme"... Some Warn of a 'Bubble Theory'

Gameplay screen of the virtual real estate investment and trading platform 'Earth2' / Photo by Internet Homepage Capture

[Asia Economy Reporter Lim Juhyung] The so-called 'Metaverse,' a digital virtual world distinct from reality, is capturing public attention. Following the boom in cryptocurrencies like Bitcoin and Ethereum, virtual real estate, virtual artworks, and virtual idols are also gaining significant interest. However, some voices are raising concerns that the virtual asset boom resembles multi-level marketing investments, suggesting it may be a bubble.

Recently, the virtual real estate trading website 'Earth2' has been attracting attention. Earth2 is a platform where all land on Earth is divided into 10x10m plots that can be bought and sold with real money.

However, the land existing on Earth2 is not real-world land. Earth2 uses satellite images to create a virtual planet identical to Earth, and buying and selling this land is a kind of game. Land purchased on Earth2 remains only as records on the game server and has no impact on actual reality.

Nevertheless, many people are competitively bidding to purchase real estate on Earth2. This game, which started service in November last year, had a total asset value of $32.15 million (approximately 35.9 billion KRW) among U.S. users as of April. Italy invested $8.1 million (about 900 million KRW) in Earth2's virtual real estate, while Korean users poured in $7.45 million (about 830 million KRW).

Why do people invest hundreds of millions of won in virtual land that is nothing more than digital images? Earth2 investors believe that such 'virtual real estate' can become an alternative investment vehicle.

A netizen A, who posted an 'Earth2 real estate purchase review' on an online community, said, "The principle is the same as actual real estate. Prices rise or fall according to supply and demand," adding, "There are suspicions that it might be a scam, but wasn't Bitcoin treated the same way at first? Virtual real estate can become an investment tool like virtual currency."

The first domestic digital artwork with NFT (Non-Fungible Token) technology applied, Mari Kim's 'Missing and found' / Photo by Pica Project

This is not the first time virtual assets have been spotlighted. Previously, cryptocurrencies such as Bitcoin, Ethereum, and Dogecoin were also favored by investors. On April 17, Dogecoin's daily trading volume surpassed 17 trillion KRW, exceeding the average trading volume of Korea's representative stock market, KOSPI (14.9372 trillion KRW).

However, as negative factors such as Tesla CEO Elon Musk's critical remarks and regulatory measures by Chinese financial authorities emerged, the cryptocurrency boom slowed down, and people seem to be turning their attention to other virtual assets. Recently, not only virtual real estate but also virtual artworks like Non-Fungible Tokens (NFTs) have attracted interest.

NFTs apply blockchain technology like cryptocurrencies to provide digital certificates that cannot be replicated by others, guaranteeing the value of images. The core is to maximize the value of products by converting highly scarce artworks into NFTs to prevent duplication. In Korea, a digital file recording the game where Go player Lee Sedol 9-dan uniquely defeated the AI 'AlphaGo' was NFTized and sold for about 250 million KRW, becoming a hot topic.

With the successive 'virtual booms,' expectations are rising that the full-fledged 'Metaverse' era is dawning. The term Metaverse is a neologism combining 'meta,' meaning transcendence, and 'universe,' referring to the world, and it denotes a virtual reality implemented in the digital world.

The metaverse game 'Roblox,' where users can interact with each other in cyberspace or create and sell software / Photo by Roblox

The Metaverse is already gaining great popularity. The U.S. gaming platform 'Roblox' is a representative example. In Roblox, users communicate through virtual avatars within the game and can create and sell new games by coding themselves. According to the developer, about 2 million users and developers are active within Roblox, and the currency used in the Roblox world, 'Robux,' is not only in-game cyber money but can also be exchanged for real money.

Rookie female idol group 'aespa' actively utilizing the metaverse concept / Photo by SM Entertainment

In popular culture, the Metaverse is establishing itself as a new trend. The rookie female idol group 'aespa' under SM Entertainment is captivating audiences by fully embracing the Metaverse concept. They have drawn attention with a unique performance where the human members on stage 'transform' into digital characters. On the 3rd, aespa ranked 65th on the U.S. music chart 'Billboard 200.'

However, optimism about the Metaverse and virtual assets is not universal. Some experts point out that virtual assets are nothing more than intangible bubbles.

In March, the British media 'The Telegraph' cited European art auction experts regarding the NFT investment craze, warning that it is "close to a kind of deception" and expressing concerns that "some people will eventually suffer losses due to this multi-level marketing-style investment frenzy."

Paul Krugman, a Nobel laureate in economics, also criticized cryptocurrencies in a column he contributed last month to the U.S. media 'The New York Times' (NYT). Krugman stated, "It has been 12 years since cryptocurrencies were created, but they still play no role in the real economy," and criticized, "Investment flows into things with no utility simply because prices rise, which is a multi-level marketing scam."