Decentraland, the open standards-based social VR world project which sold virtual land plots worth USD $25 million in Ethereum last August, is experiencing a virtual land grab that's become so fierce since I wrote about in February, Bloomberg News has taken notice:
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... 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.
Since I was Linden Lab's fresh-faced embedded journalist when Second Life land plots were first put up for real money sale in 2004, some points of correction -- both for Bloomberg and (perhaps) Decentraland:
Back then, Second Life land was actually quite limited at the time, since user activity was based around its early "mainland" continents.
Even more key -- and I hope the Decentraland team is reading this:
By 2004 and the start of land sales, Second Life already had a small but close knit, Burning Man-type early community of virtual world users, fostered since its early Alpha launch in 2002. So much so, that when the first island was sold for real cash, it was inundated by anti-corporate protesters. But this is probably why virtual island sales ultimately became so successful -- there was an existing, highly active in-world community before the land speculation took place. To judge by Decentraland user activity on its Reddit, the vast majority has little to do with virtual world social events or collaborative projects that marked Second Life's rise, but land speculation. Virtual world land as a revenue stream only makes sense if the virtual world community for that land is already well in place. Because while "If you build it they will come" might work in classic 80s movies, it hasn't provably worked with virtual worlds.