Digital 1,100-square-foot plots in Genesis City are selling for as much as $200,000.
Last month, Ryan Kunzmann went to a bar in New York to see his 58,000 square feet of property. No, it’s not the world’s biggest bar—his holdings are virtual.
Kunzmann was one of about 20 people meeting to chat and compare their little slices of Genesis City, a digital metropolis they’re hoping will eventually become a major hub for virtual-reality commerce. Kunzmann, who does tech support for a property management website, says he intends to turn one of his larger stretches into a virtual museum or art gallery. “There’s a lot of great art out there that people don’t get to see,” he says. “Especially if you don’t live in a big city.”
While this sounds like a lark, or perhaps another iteration of the faded online world Second Life, there’s already real money behind the blockchain-based real estate. In December, Kunzmann paid $15,000 for 62 plots of about 1,100 square feet apiece, and he recouped his investment three months later by reselling a mere eight of them. Today, resellers can reliably get as much as $30,000 for a Genesis City plot. Credit network Ripio.com paid almost $150,000 for a spot next to the main square where visitors appear when they enter the city. The record is $200,000, sold by a user who’d recently bought the same plot for $13,000.
Scarcity is driving the speculation. Unlike Second Life, or games such as SimCity, Genesis has fixed virtual dimensions, some 90,000 plots that make it about the size of a digital Washington, D.C. Argentine coders Esteban Ordano and Ari Meilich created the city, part of a broader digital world called Decentraland, using the Ethereum blockchain. Another key factor, they say, is that no single corporation can suddenly change the terms of their virtual world or own users’ data, which helped Decentraland’s initial coin offering raise about $26 million in 30 seconds last year. The decentralized nature of Ethereum has also made it easy for users to trade the fixed supply of Genesis real estate among themselves, which contributed to a jump in virtual land values after an auction of plots helped raise an additional $28 million.
Source/More: Making a Killing in Virtual Real Estate – Bloomberg