Illustrative image: When you’re buying virtual property bwith cryptocurrency, you’re actually buying computing power on a server somewhere, and that costs money. (Images: Pixabay) 
A recent conversation with a game developer about his exploits in the metaverse revealed something to me that I had never quite understood.
You see, like most rational adults, I couldn’t understand how and why people would spend money on virtual property.
There’s infinite supply because the developers can just make more space, right?
Apparently not. When you’re buying virtual property, you’re actually buying compute capacity (or computing power) on a server somewhere, and that costs money.
Your NFT is like your house key – and GPS coordinates to let that particular part of the internet know where it is (the interplay between the internet and private blockchains is complex, but I digress).
This transaction is also done via the crypto token associated with that blockchain, which is Solana in this particular case. What is concerning is that the developer quickly swaps to a stablecoin and then moves to an exchange to cash out – because some bills can’t be paid with crypto, yet.
Meanwhile, in the meatspace (that’s what early metaverse enthusiasts called the physical world), the US Federal Housing Finance Agency is considering cryptocurrency when deciding whether someone has enough assets to qualify for a home loan.
So if someone owns R1-million in bitcoin held on Binance, for instance, that might help boost their application.
Why is it considering this? Because the housing market is struggling under high interest rates and including crypto could help more people qualify for loans. It also aligns with a Trump administration push to make the US a global leader in crypto innovation. This is also exactly the kind of thing that is quite catchy for emerging economies that are looking to capitalise on the crypto momentum.
If the idea spreads here, I wonder if that game developer’s crypto earnings could be used to secure a traditional home loan. He could then systematically convert his virtual property gains into rands to pay off the real-world property debt. DM
This story first appeared in our weekly Daily Maverick 168 newspaper, which is available countrywide for R35.
