Property Rights in the Metaverse and Virtual Worlds: The Law of Digital Real Estate

1. Introduction

With the advancement of technology, the concept of the metaverse and investments in digital real estate within virtual worlds are rapidly increasing. Users can buy, sell, and trade digital plots, buildings, and other assets on blockchain-based platforms. However, this new form of digital ownership raises many novel legal questions within existing legal systems.

2. What is Digital Real Estate?

Digital real estate refers to digital plots, structures, and other assets owned in the metaverse and similar virtual platforms, verified by blockchain technology. These assets are secured through NFT (Non-Fungible Token) technology, which guarantees ownership rights and uniqueness.

3. Legal Dimension of Property Rights

• Definition and Protection of Ownership: Unlike traditional real estate ownership, digital real estate is considered a non-physical right recorded and transferable on the blockchain. The provisions of the Turkish Civil Code relating to immovable property do not directly apply.
• Copyrights and Licenses: Intellectual property rights, usage licenses, and compliance with platform rules are necessary in creating and using digital assets.
• Contracts and Terms of Use: The terms of use provided by metaverse platforms define users’ rights and obligations. These agreements often include limited ownership and usage rights.

4. Legal Issues and Risks

• Recognition of Ownership: Digital real estate ownership is not yet fully recognized by national legal systems, complicating the protection of rights and dispute resolution.
• Fraud and Cybersecurity: Risks include fake NFTs, irregularities during property transfers, and cyber-attacks.
• Taxation: Tax obligations related to the buying, selling, and income generated from digital assets remain unclear. Tax authorities are working on regulatory measures.

5. Future Outlook and Legal Regulations

Regulatory developments in digital real estate in Turkey and globally are still in early stages. However, new legal norms adapting to technology and specialized legislation are on the agenda. International cooperation and the establishment of blockchain technology standards will be important.

6. Conclusion

Property rights in the metaverse and virtual worlds are rapidly gaining importance as a new form of ownership in the digital age. When investing in digital real estate, existing legal risks and uncertainties must be considered, and support from specialized legal advisors is recommended.