Thanks to Covid-19 more people are stuck at home and maybe your thinking buying virtual real estate might be a great idea? Decentraland is one option and it has some pros and cons to it.
Decentraland has an experienced team, the token MANA has a fixed supply, and the popularity of video games only helps this project. The negatives are there’s lots of competition in virtual worlds, it’s built on Ethereum that has high gas prices and it’s not easy to join the game.
Keep reading and I’ll share what Decentraland is, what you can do in the virtual world, what competition the project has, and my thoughts.
What is Decentraland?
Decetraland is a community-owned virtual world and it runs on the Ethereum blockchain.
Each part of the land is an NFT on the blockchain. There are 90,000 parcels of land and each piece can be customized. When you customized it, you are using a drag and drop program similar to the video game SimCity.
Some land is used for roads or plazas and they can’t be sold. There are also large plots of land that are owned by people are organizations.
The closest the land is to a road or popular plaza, the more expensive it will be (just like in the real world).
Players can also buy names and clothes for that avatars in the game. Everything is purchased using the MANA token. The MANA token is a governance token and this means you can vote on things.
What can you do in Decentraland?
Believe it or not, video games are a bigger business than movies and music combined and it’s ONLY going to grow. Instead of going to the real Las Vegas, you can actually go to the virtual one in Decentraland.
How about art galleries? Yep, there are these in Decentraland. Heck maybe, this is why some of these NFT projects are selling for so much.
I’m sure you have heard about Beeple who sold the NFT Everydays for 69 million dollars, in case you haven’t HERE is a blog post I created about him, which is VERY interesting.
You’re probably wondering why in the HELL would someone pay 69 million dollars for digital art? One reason is that it increases the value of other digital art near it. It’s like how the Mona Lisa draws people to the Louvre Museum in Paris France.
There are even racing games in the virtual world.
This is sounding more and more like the movie Ready Player One right?
I listened to the audiobook when I was hiking on the “Pacific Coast Trail” many years ago. The audiobook was MUCH better than the movie.
There was even a soccer tournament on Decentraland and the winner received a trophy NFT that was backed by real-world gold.
If you’re struggling to wrap your mind around all this stuff Remember…
A blockchain is JUST a receipt (ledger) that shows who owns what.
Heck, there are even virtual concerts that happen. Seriously you got to check out the upcoming events by clicking the link HERE. Funny, there is even Kareoke and scavenger hunts.
What a bunch of nerds.
You might be wondering how do you buy land in this virtual world? You can go to the market by clicking on this link HERE and all the light blue areas are for sale.
You pay for the land in MANA tokens.
Pros and Cons to Investing in Decentraland MANA tokens?
In the long term, I’m bullish on the MANA token.
One of the things you can do with the MANA token is buying land. You can also buy goods and services in the virtual world, customize your virtual body, and vote on ideas.
There is a fixed supply of 2.6 billion tokens when the token was first created and there are 1.7 billion in circulation.
During the initial land auctions, many MANA tokens were burned during the auctions. Also, 2.5% of all transactions on the Decentraland marketplace were burned, now there is a fixed supply of 2.2 billion tokens. The community decided to stop burning tokens and put them into a community fund.
The team can’t mess with the supply because they destroyed the keys to the smart contract.
If that wasn’t enough the amount of tokens is distributed fairly evenly. Most projects have a few whales that hold a lot and there is a risk they will dump all their tokens.
With MANA the largest whale is Binance (the exchange), which is sure having lots of problems with its CEO.
Another advantage is the growing popularity of video games. The whole COVID 19 pushing people to stay home and play video games only helps Decentraland.
The third advantage this project has is its team. The team does seem qualified and has the experience and you can learn more about the team from this post right HERE.
Let’s talk about some of the negatives of this crypto project. The largest negative is there is lots of competition for virtual worlds.
One of the largest players that will compete has a big face and loves books. Can you guess who this player is?
Facebook. Yes, Facebook wants to create a metaverse and it has the network and money. You can read more about Facebook’s virtual world by clicking on the link HERE. Oh, Facebook recently changed its name to “Meta.”
Plus, there are other players such as Neoland, Sandbox, High Fidelity, and MUCH more. Let’s not forget Amazon’s new MMMO can jump into the space.
Yes, Jeff Bezos wants to jump into space (literally)! Doesn’t Amazon.com want to control everything?
The second negative with Decentraland is it’s built on Ethereum. Most people have a love/hate relationship with this crypto.
The gas prices can be VERY high and expensive to move MANA. This just makes it harder to do business. Ethereum is also Turing complete and this means more things can go wrong.
You know there are 2 Ethereums? Yea, oops! Oh, and there was another recent hacking event, you can read about from the link HERE.
Oh, in case you haven’t heard Ethereum is changing “everything” around and including staking, sharding, and more. The bad news is due to it being MORE new now, it’s riskier and there is more of a chance of something going wrong.
The third negative is it’s NOT easy to get started. Let’s be honest, people are insanely LAZY.
Figuring out how to get MANA, funding your wallet, and buying high gas prices make it challenging for new people to join.
Conclusion
In the long term, I’m bullish on Decentraland, but it’s VERY risky. So many things can go wrong! Also, Decentraland is going to have some competition.
Every time I think of NFT’s and buying virtual land I think of the story of the moon. Dennis Hope thought he found a loophole that nobody owned the moon.
He claimed ownership of the moon as well as many other planets and started selling the land. He even sold land to former President Bush, Ronal Reagan, Jimmy Carter, and 675 other celebrities.
Very funny story and you can read more about it by clicking on the link HERE. One more funny story is about people selling imaginary friends and ghosts on Ebay (It’s true)!
Some of these imaginary friends sell for lots of money. Here is a list of some I have found. The world is crazy, so if imaginary friends and land on planets can sell – virtual land does have a chance.
I hope this blog post on the pros and cons of investing in Decentraland was helpful. Bye for now.