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| Chyung Eun-ju |
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| Joel Cho |
Although Lee's pledges don't seem to be plausible and he doesn't seem to quite grasp the various facets of digitization, digital land is something several South Koreans (especially the so-called MZ Generation born between the early 1980s and early 2000s) are looking into as soaring home prices and income inequality grow.
For instance, a 30-year-old Korean engineer, Shaun, is planning to design a building to host K-pop live performances and drama screenings on the parcels of land he bought for millions of won in Decentraland, a blockchain-based virtual world.
In Decentraland there are a limited number of digital land parcels that are offered in the form of non-fungible tokens (NFTs) and can be purchased through MANA, a fungible token based on Ethereum. In 2017, you could buy land parcels in Decentraland for $20 but now, with the growth and popularity of cryptocurrency, land parcels have consequently risen in value, being currently sold for thousands of dollars.
According to data disclosed on Sept. 1 this year, Decentraland has 7,067 active Korean users, which is second only to the United States, consolidating once again the popularity that the metaverse has among the Korean community.
But the question remains ― why are people paying a lot of money for one 16 x 16 square meter lot of digital land in Decentraland?
The truth is that the metaverse is not an alternative reality anymore, it has paved its way into becoming a part of life, an extension to the physical world we live in. We are a generation that has been exposed to digital communication since a young age, and most of our time is spent on our devices.
With various markets like entertainment, art and fashion adopting and adapting to the metaverse, it is not so inconceivable that real estate is hopping on the same ride. Several Korean entrepreneurs already own land in "Earth 2," a gaming platform that's not quite considered a metaverse since users cannot log on to interact with the virtual world but a virtual version of Earth where people can purchase, bid and own virtual land just like owning land on real physical Earth.
These entrepreneurs, when buying virtual land on this platform, are actually investing in an idea they believe will build a profitable commercial business.
In fact, Shane Isaac, the chief executive of Earth 2, told Reuters that Koreans were the most active users and spent around $9.1 million (the United States came second at $7.5 million), which can be partially attributed to the frustrating real estate prices and regulations in the physical Korea.
There's no doubt that Korea is an emerging key player in the metaverse, as the government seems to be supportive of technological development in it. The Ministry of Science and ICT created a "metaverse alliance" in May 2021 for the development of virtual and augmented reality platforms ― an alliance of 500 firms which include Samsung, Hyundai Motor, SK Telecom and KT.
The country has the fourth-largest gaming market which is expected to exceed 18 trillion won ($15 billion), and Korean game companies are already planning to expand into the metaverse using their game characters and intellectual properties. Nexon, a popular Korean game company, intends to launch new metaverse content through its leading game "MapleStory." Netmarble, another famous game company, made a subsidiary metaverse entertainment company that provides a virtual reality platform for virtual K-pop idols.
Koreans have a saying that emphasizes the importance of real estate as a life-long investment, but now that physical real estate is becoming more and more unattainable for most and faces the obstacle of various conflicting policies, the race to own digital land is expediting. It seems like an exciting new chance to invest in real estate, as the world becomes more and more digital each day.
Presidential candidate Lee said he would make the digital transformation inclusive but as of this moment this seems to be an extremely difficult task, as the value of digital assets is experiencing tremendous growth. There will be polarization among the people who use the metaverse and those who don't.
Even now, there's a division among people who use online services and offline services; those who are more comfortable with physical and traditional spaces and those who prefer an online space. As digitization develops, it seems that the obvious path will be a divide among online and offline users and, once solidified, overcoming this bridge might be the next challenge we will be bound to face.
Chyung Eun-ju (ejchyung@snu.ac.kr) is studying for a master's degree in marketing at Seoul National University. Her research focuses on digital assets and the metaverse. Joel Cho (joelywcho@gmail.com) is a practicing lawyer specializing in IP and digital law.
