Earth 2 was launched in December 2020 and ever since had been making raves. In less than a year, the platform has seen massive growth. Quite surprising as they don't spend much on advertising. Now, a lot of people are currently trying to grab a piece of this new investment scheme because it promises huge returns. Some have even dubbed it “the new Bitcoin.” As an investor, careful with his money, you might be wondering, “is earth 2 a good investment?”
To put it straight, Earth 2 is not considered a very sound investment choice at the moment. Therefore, conservative investors are advised to stay away from it. However, aggressive investors, drawn to the thrills of risk-taking, would venture into it with capitals that they can risk losing.
As you read further, I will explain why I feel Earth 2 is not a good investment choice at the moment.
Note that a large piece of this article is only the author's opinion!
What is Earth 2
Earth 2 is a platform where people can access a futuristic gaming concept for the second version of Earth. The game is a digital reflection of the world as we know it. However, this digital Earth is split into 5.1 trillion tiles that you can buy as investments.
Since Earth 2 is a digital game, all the properties you buy on the platform are virtual. These tiles, measuring 10×10 meters, can be traded on the platform among gamers for a profit (or loss). The virtual lands, depicted as tiles, bought by a user increases in value based on the location, earning potential, demand, and time.
It's an actual monopoly game but digital and costs real money. However, at the moment, the accepted method of payment is PayPal.
Earth2 is not a Cryptocurrency
One of the reasons why Earth 2 is popular is because influencers sell it to people as the “next Bitcoin.” However, Earth 2 is not a cryptocurrency. This is clearly against the popular misconception on the internet.
While most people claim it is like Bitcoin, Earth 2 has almost nothing in common with Bitcoin. The content of Earth 2 is not fungible. That means, unlike blockchain where you can replace tokens, the tiles in Earth 2 are unique. Therefore, the tiles do not have a defined value, and their prices can change based on who is valuing them.
In the crypto world, its close comparison is NFTs.
I connected with an Earth 2 user, William Westerlund (who is also a part of the Almvest team), and his ken on the concept was rather enlightening. He wrote:
“Earth 2 is not a cryptocurrency token from what I know. It's a high-risk investment because there's no cap on how much in-game currency they are allowed to print. Therefore, if they were to close the project for any reason, they can do so without paying back the money to the people that put money into the project.”
So, anyone investing in this should be [prepared] to lose all their money. Even if it's not a scam, the chance of the project becoming as mainstream as it needs to be is extremely small and they don't seem to have a huge team or investment.”– William Westerlund
Difference between Bitcoin and Earth 2
Bitcoin is a decentralized network that offers more dynamics compared with Earth 2 in the following ways:
- Bitcoin has a limited supply that is decentralized.
- Transactions with Bitcoin are completed on a peer-to-peer basis or via exchanges.
- Transactions with Bitcoin are stored on blockchain for transparency
- Bitcoin supports value generation through new use cases.
While Earth 2 might have great potential, it is quite unsuitable to compare it to Bitcoin.
Is earth 2 a Ponzi scheme?
At the moment, Earth2 seems like a Ponzi scheme. Judging by the SEC's guide for spotting Ponzi schemes, Earth 2 ticks the following boxes:
Little Risk Investment with Promise of High Returns
According to the SEC, one of the ways to identify a Ponzi Scheme is usually the guarantee that they offer their investors. All investments come with a degree of risk. Usually, the more the risk involved, the higher the profits.
Scams, however, offer you an opportunity to get mouth-watering returns with low risk. Earth 2 seems to be one of those websites that makes big claims about high yield with low risk. This is usually the first way to spot a Ponzi scheme.
The properties you buy on the platform are not registered under any government body. This means you do not have any legal assurance about the performance of the investment. There is no higher body like the SEC or FINRA monitoring the operations of the company and so you are at the mercy of developers.
Earth 2 and its owners do not have licenses to operate as a financial service provider. According to the SEC, this is usually a huge indication of a scam.
According to the SEC, a company that makes it difficult for its investors to access their money is probably a fraud. At the moment, withdrawing money from Earth 2 is not a straightforward process.
Many of their users on Reddit have complained about not being able to sell their properties. Some say, the process of withdrawal comes with several complexities and some have said they ignored their withdrawal request. I spoke with an active user, Jonathan about the withdrawal issues and he agreed that people had complained about withdrawals in the past. According to Jonathan, the team has done well to fix some of these issues, however, there are still some people who cannot withdraw their funds.
The Optimistics of Earth 2
One of the reasons why investment is a game of risk is that you never can tell what might change the world tomorrow. At some point in 2009/2010, some people might have argued that Bitcoin looked like a Ponzi scheme. However, one bitcoin is worth a lot of dollars today.
Earth 2 is still very much at its early stage. Even though there are lots of red flags around the scheme, a few positives surround it. For instance, according to William, the team is constantly giving updates as to what they are doing behind the scenes. That gives some confidence that they plan on doing something great and they are not just about the words.
In his words:
“I have a few dollars on the platform and this is what I think. The developers seem to know what they are doing whenever they reach out to us. I feel the project is in its early stages and so, it is too early to judge if it's a good investment or not. However, if they manage to fulfill all their promises it is likely going to be a big reward for those of us who came early.”William Westerlund
Verdict: is earth 2 a good investment?
Like William has rightly said, it might be too early to judge the profitability and authenticity of Earth 2. However, since it is too early, there is a high chance that you might lose your money to the project if it fails to reach its maximum potential.
If you are considering an ideal investment, I would suggest other safer options. There are many better investment opportunities out there that can get you decent returns. At the moment, it's best to see what becomes of Earth2.
If you plan to invest in the project, I suggest that you invest only an amount that you can risk losing entirely.