Digital Property Growing 7-8 Times Faster than Real Property..?!?
This graph comparing the price growth in digital property compared to real property taken from ChainAnalysis State of Web 3.0 Report struck my attention recently...
The data suggests that the value of digital property grew around 7-8 times faster than the value of real property up to mid 2022, and that's well into the current bear-market, actually you can see the growth rate levelling off.
So I imagine the prices of virtual real estate would have come down since then, but we're probably still looking at around a 4-5 times increase for digital over real.
My own experience of owning digital land is only through Splinterlands - I bought a tract, or 100 plots, and those are still sitting at around 15 times what I paid for them, at some point in the full on bull market they were around 30 times up.
I did sell a few, but not many.
The problem of course with these valuations is that these valuations may never be seen again - last year may well have been the peak time for digital land values compared to real land values - when there were relatively few projects up and running - such as Decentraland, Sandbox, Upland, of course Splinterlands and there was a lot of hype surrounding such things.
One year on and there must be many more up and coming competitors - it is much easier to expand the supply of digital land compared to real land, after all!
So personally I'd be cautious about investing in digital land assets at this point even if they seem relatively cheap.
And then there's the fact that real land has so much more utility, I mean for food and energy and fuel, for example, none of which you are going to get with digital land!
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Insane, that at base, no real value which can vanish easily overnight, can get so much hype.
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Yes it really is a case of no underlying value - it does fascinate me though the concept of digital property!
I mean in a way server spavce is a kind of digital property - our data is stored physically at the end of the day after all! Just the amount of space involved is microscopic!
yes, I also feel the same. digital lands are more speculative in nature.
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Let's see how it develops, the whole virtual world.
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It happens by now that digital and real meet nowadays.
Some assessments from an economic point of view are complicated to make, especially in terms of the future.
I remain in agreement with you that the land, the real one, however has a different value that goes beyond the mere economic discourse.
Owning land can mean cultivating ourselves, obtaining food, energy and a thousand other things that willy-nilly digital land will never give.
Nice analysis!
I never understand the argument in crypto communities that digital land has no value because more of it can be made. How is crypto different? New cryptos are created daily. We invest in the projects we think will continue to matter. Same with digital land.
Well personally I think the same is true of Crypto!
I mean look at Splinterlands overall - so MANY tokens, going BBBRRRR and all number go down!
Yep. The same is definitely true about crypto. And now Aggy's biggest wish is to create DEC staking with a 21% APR paid out in even more dec... in an attempt to get dec back to peg. Just madness.
And the land-DEC tokens of course, just BRRR!
I could not grab the concept of digital lands ever. I am always bearish for digital lands. Tokenizing real estate could be an option to bring lands into digital worlds. I mean, tokenizing the real lands and by this fractionalizing the investment. So small investors can grab a few deals with less documentation, and more transparency. By this, some capital gains like dividends (over rentee fare) and other incentivization are attached.
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