“Buy land”, American humourist Mark Twain once wrote. “They’re not making it anymore.”

In the evolving metaverse, however, they’re making land at a dizzying pace – and investors are jumping in with both feet.

Aiming to secure a solid tenancy inside fast-evolving virtual worlds, investors are happily spending real money on virtual land grabs as they race to outbid each other for prime ‘real estate’ inside metaverses like Uphoria and Sandbox.

Forget promotional experiments like the Australian Open metaverse: one Sandbox investor recently spent $5.7 million ($US4.3 million) to secure a plot of virtual land, while a property in the Decentraland metaverse was sold for $3.24m ($US2.43m) to an investor planning to host virtual fashion shows for metaverse avatars.

All told, punters spent over $667m ($US501m) on metaverse space last year alone, and this is expected to double during 2022 with ventures such as Sandbox’s new ‘land sale’.

Even that projection could prove conservative, however, given that last week’s release of $400m ($US300m) worth of metaverse real estate by Yuga Labs – better known for creating the Bored Ape Yacht Club NFT – proved so popular that it raised $379m ($US285m) and crashed the entire Ethereum blockchain.

Returns like that suggest the stakes for the new metaverse are much higher than for Second Life, an early 3D world that was slammed as a failure a decade ago.

With a populace now addicted to social media, comfortable with cryptocurrency and NFTs, trained for virtual worlds on Minecraft, and empowered with powerful devices that make immersive 3D video easily accessible, could today’s metaverse ventures succeed where Second Life and copycats like Sansar once struggled?

Financial-industry bellwethers think so, with Citi recently predicting the metaverse economy could grow to be worth as much as $17 trillion ($US13t) by 2030.

Gartner, for its part, believes that a quarter of people will spend at least an hour in the metaverse every day by 2026 – with 30 per cent of the world’s businesses offering products and services in metaverse environments.

“From attending virtual classrooms to buying digital land and constructing virtual homes, vendors are already building ways for users to replicate their lives in digital worlds,” said Gartner research vice president Marty Resnick – while warning that “it is still too early to know which investments will be viable in the long term.”

Inflating the bubble – but who has the pin?

Even as investors rush into the metaverse, some wonder whether we’re spending ourselves into yet another tech bubble.

Noting that there are 160 companies currently building their own versions of the metaverse – including Second Life, which has joined the metaverse explosion with virtual event spaces, virtual meetings, and a claimed annual GDP of $866m ($US650m) – one fintech CEO is ringing alarm bells.

The “unbelievable amount of time and money pouring into uncharted territory”, warns Tim Frost, founder and CEO of fintech Yield App, is going to bite investors who are “‘FOMO’ing’ into areas they don’t necessarily understand.”

“When a trend like this explodes,” he said, “people tend to lose their heads” and funnel their money into new areas where they are easy prey for scammers – as happened with initial coin offering (ICO) scams years ago.

“Just as with token ICOs in 2017/18,” he said, “thousands of investors are going to get burnt as they thoughtlessly pile into” metaverse ventures that “capitalise on greed and ignorance.”

Early ventures are proving that the metaverse still has a long way to go: although Facebook’s rebranding as Meta has won it the lion’s share of the attention around the metaverse, for example, founder Mark Zuckerberg’s curiously uninspiring vision of virtual work had many asking the question “why?”

Other firms see a more practical use for the metaverse, with efforts underway to enable the creation of digital twins that enable safe training and simulation in industrial environments.

Meanwhile, on the other side of the tracks edgier metaverse ventures are fuelling familiar moral outrage as unrestricted red-light districts sidestep evolving government regulations to drop users into unmoderated virtual spaces rife with sexual harassment, criminal activity, racism, and grooming.

With many warning that technology is killing our shared reality – and social media is destroying democracy – the metaverse is certain to hit its share of speedbumps as it either bumbles its way to widespread acceptance, or falls short of expectations.

Privacy, for example, will take on a whole new dimension as metaverse pioneers work to monetise their efforts by selling personalised advertising that can be subtly integrated into the metaverse or blasted at users.

“Providers will endeavour to adopt a privacy by design approach to appease regulators,” GlobalData associate analyst Emma Taylor explained, “but unfortunately the metaverse will still be a fertile ground for data privacy violations.”

That said, she added, tech and gaming giants’ massive metaverse investments and merger and acquisition activity – which are driving efforts to build an ‘open metaverse‘ that links myriad individual worlds – are putting very real weight behind a “still largely conceptual” metaverse.

Calling the metaverse “an all encompassing platform used to access every developing technology, simultaneously and in one place,” Taylor said, this year “there are many companies that will be involved at every stage of the value chain.”

“Even though the metaverse may not be realised in its true form for several years, the numbers are just too big to ignore.”