What's happening with in-game NFTs?
Can NFTs really revolutionise computer games and our economy?
Coo! It’s Crypto Owl and I’m surprising you with this special Saturday visit.
On the Weekend Meniu we have:
🕛 Estimated read time: 6 minutes & 12 seconds
🥞 LAZY BRUNCH: In-game NFTs
IN-GAME NFTs
Let’s start with the basics. What are in-game NFTs?
I may sound like Dwight K. Schrute from The Office, but - question first: have you ever played any computer games? Like, any.
Probably you have, but if not - try it, it’s kinda fun. And it's a good way to escape reality too.
Anyway, think of any asset in a game. It could be a gun of your character, clothes or even skin, right? If you want to change those assets in a game, you usually have to play enough to get rewards, to enter new levels and as you do that, you can buy any asset for your character, using “currency” of the game.
Similar is with in-game NFTs. But every asset you own in a game… it actually belongs to you. Just like anything you buy in reality. It's just you buy this stuff in the game, on the Metaverse.
When you buy an in-game asset that is NFT, all the information about this purchase is recorded on the blockchain (you can buy land, pets, clothes, aaanything). So basically you have a digital receipt which assures your ownership. As you buy in-game NFT, you can just keep it while its price (hopefully) rises, or you can trade it, sell it and, long story short, make money.
So, you play and make profits. That’s why those games are called play-to-earn.
Usually every play-to-earn game has its own currency. One of the most popular Metaverse games where you can buy NFTs are Axie Infinity, the Sandbox, Decentraland and others.
As you now know the basics, let’s fly on further.
Why is it important to talk about in-game NFTs?
Because they are a part of our future and maybe even part of our economy. Metaverse is building up and evolving, and as you’ve just read, there are already existing games where you can buy in-game assets as NFTs. And that’s just the beginning.
Was there any inspiration?
In 2012, Steam Community Market was introduced in order to create safer in-game exchanges for games like World of Warcraft or Team Fortress 2. These games created communities which, in turn, created entire markets for trading powerful or unique items that could be used in the game.
However, due to the lack of regulations, such markets quickly got notorious for the number of scammers who abused people’s trust and used the unregulated nature of such exchanges to get away with what they’ve stolen.
So, what changes Steam has introduced?
It is believed that Steam has laid out the blueprint for NFTs by making it clear that people can actually pay thousands for a digital asset.
However, all games that are in-tied with Steam are centralized. Players’ in-game property is tied to their Steam accounts, and these accounts are fully dependent on the functionality of Steam’s servers. They can ban them. And after such a ban, all the purchases would be lost. This does not apply to the blockchain-based property.
Then why is it still not reality?
It's the technical side of it. Firstly, Metaverse is still being created and it will take time. A lot of time… Also, in order for game items to be portable between different games, a lot of technical stuff has to be regulated and synchronized in harmony.
Different games, different gaming platforms, devices, computers would have to correspond to a certain level of centralization. Some argue that this is only possible to a certain degree. But such an interconnected system requires that they would all have to contribute to one, united digital ecosystem. Efficient structures would have to be built that would allow games to check-in directly with the external blockchain to verify that a particular player owns an item. The data would be transferred and the game engine would be able to load the image of the item that the player owns in the digital ecosystem of interconnected games. Sounds complicated? Well, because it is.
Moreover…
Every game has its own concept art and every character or item design is usually subject to copyright. So this is also something that would require a universal solution. And finally, apart from all of this, developers should think about games’ artistic integrity… eh, sounds like a lot of difficult work. But hopefully it will bring eye-appealing results for all of us.
We are witnessing important things
The digital and the physical worlds are merging. And as time goes by, people will want more ways to express themselves. The demand for the ability to be recognizable in every online sphere will only keep on growing. We’re entering a new age and the question about in-game item interoperability based on NFTs isn’t about ‘Is this going to happen?’, but ‘When is this going to happen?’
EXTRA: IN-GAME NTFs MARKET RIGHT NOW
Hmmm. Actually, there is just the same situation as in the whole crypto market. Bitcoin is like a guide star for every other altcoin. If Bitcoin falls, the rest follows. NFTs are not an exception, and their priced dropped down. Greatly. And In May alone, demand for NFTs fell 92% and it’s very likely to continue to be on a huge “discount” until the bear market stabalises or a new promising NFT application arrises. Yet it will probably take some time, but we’ll keep our eye open and will let you know if we spot anything noteworthy.
CHILL TIME ON THE SOFA
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Disclaimer: This newsletter is strictly educational. None of this information is intended to be financial advice. Always do your own research and act responsibly with your profits.