Blockchain and cryptocurrencies succeeded to open their way into many aspects of human beings’ lives, but NFTs went one step further and even entered the “GameFi” world. The main question is, will NFTs’ effects on the gaming industry be long-lasting, or is it just a temporary effect? Stay with us in this article to figure out the answer to this question.
An introduction to the concept of NFT
NFT stands for Non-Fungible Token, and it stands against tokens or assets that are fungible. Imagine you have a 100-dollar bill. This bill has an equal value to all other 100-dollar bills in the world, and you can exchange them for one another. The same is true about Bitcoin. One unit of bitcoin does not differ from another. But this is not the case with NFTs. Each NFT is unique and has specific characteristics. No two people can mint the same NFT at the same time. NFTs have different values. One NFT may be worth thousands of dollars, and another may be worth less than 10 dollars. Besides, after an NFT is minted, its data will be recorded on the blockchain and is accessible to everyone. So, when a person owns an NFT, he/she can easily prove this ownership. This also removes the risk of fraud or manipulation. With these explanations in mind, now we can investigate the role of these digital assets in the gaming industry more easily.
The role of NFTs in the gaming industry
Gaming has always been considered a means of entertainment and leisure activity. It was never considered a way of earning money, but NFTs made this possible. The entrance of NFTs into the world of gaming led to the creation of a new term called “Play-to-Earn (P2E) Games”. Today, users can play their favorite games and earn money at the same time. Previously, players received some in-game assets that were of no value outside of the game. But today, users who play P2E games receive rewards in the form of NFTs, and can then sell these NFTs in real marketplaces and earn real money in return. The money some users make playing P2E games is even higher than the income of some full-time jobs. This is why people in some countries have left their jobs and started playing these games as their first job. In P2E games, all in-game assets including the characters, the warriors, the weapons, and so on are actually NFTs.
Some famous NFT-based games
Some of the most famous P2E NFT-based games include:
CryptoKitties was one of the earliest P2E games that was developed in 2017 and is completely free. CryptoKitties’ players must take care of some cute cats that are actually NFTs in the form of cats. They can also buy their favorite cats, grow them, and sell them. Besides, users can mix different races and generate a new more valuable race. These NFTs have been minted on the Ethereum network and work under the standard of ERC-721.
The Sandbox is one of the most popular NFT-based games that was first developed in 2012 but merged with the NFT technology in 2018. This game has a native token called SAND which is an ERC-20 token itself. The game has other in-game assets in the form of NFTs that can be bought using SAND. The game generally is focused on creating land and pieces of art, and then selling them.
Axie Infinity is another famous P2E game, with the difference that it is not free. To start playing Axie Infinity, you should first buy 3 Axies. Axies are little monsters that you have to grow and take care of in the game. You can also fight with other Axies and increase your score. Different Axies have different prices based on their unique features. Axie Infinity also has two native tokens called AXS and SLP. These two tokens have special roles in the game. Like CryptoKitties, you can mix different Axies and generate new ones with higher values.
How can users earn money through P2E games?
P2E games provide their users with two prominent ways of earning money, namely: “earning rewards”, and “trading NFTs in the games’ native marketplaces”.
Earning rewards is the most common way of making income in P2E games. We previously mentioned that these games reward their users with tokens that have real value. You can then transfer these tokens to a cryptocurrency exchange account, sell them, and earn fiat currency. Another way is to collect in-game NFTs. These two ways are conceptually similar, but the difference is that NFTs have to be sold in NFT marketplaces rather than cryptocurrency exchanges.
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What is the future of NFTs in gaming?
Some years ago, CryptoKitties had a 20-million-dollar market cap, but as time passed, the market cap and daily transactions of this game declined. This raises the question that whether this is going to happen for all blockchain games or not. Many people believe the hype surrounding NFT-based games is a short-living one and will fade in the near future. But this doesn’t seem to be true. Online gaming is now a nearly 60-billion-dollar industry, and it is predicted that it will reach 300 billion dollars by 2025. NFTs getting merged with this industry has the potential to change it to a trillion-dollar industry. It is said that NFT-based gaming will finally surpass Hollywood. As it seems, the future of gaming belongs to NFTs. It’s worth mentioning that the effect of NFTs is not just limited to gaming, and it has reached other industries like music, education, mode and fashion, and so on.
The benefits of NFTs being merged with different industries
The fact that NFTs are being merged with different industries has so many advantages. If we want to refer to some of the most significant benefits, we could refer to:
Helping artists monetize their artworks
A lot of famous social media platforms we have today like Facebook and Instagram have become famous because of the content created by the users. By the way, the users have a little share of the benefits and a significant part of the benefit goes to the owners of these platforms. NFTs help overcome this problem. They help artists take their real positions back, and monetize their artworks by selling them in the form of NFTs.
Ownership in the metaverse
The metaverse is the future of the Internet. It removes the boundary between the digital world and the real world. The idea of the metaverse is so serious that a giant like Facebook changed its name to Meta in 2021. But, in this world, buying is not done through fiat currency, and ownership is not proved through documents. All these processes are done through NFTs. NFTs can be used to buy lands and goods in the metaverse, and to prove the ownership later on. We assume this clearly demonstrates the importance of NFTs.
The copyright issue
Another major benefit of NFTs is that they help to overcome the challenges of copyright more easily. As we previously mentioned, each NFT is unique and its ownership data is recorded on the blockchain. This data is accompanied by a digital signature. You know that the data recorded on the blockchain cannot be manipulated or changed, and it can be tracked by anyone. So, artists can be sure that their ownership over their work is guaranteed and cannot be violated.
The topic of play-to-earn blockchain games is a hot one today, and a lot of people are speaking about these games and their future. NFT-based games literally revolutionized the gaming industry. They helped gamers monetize the time they spend playing games, and they actually let a dream come true. By the way, we again mention that the effect of NFTs is not limited to the gaming industry, and it has a much broader scale. Art and music, finance, digital ownership, and the metaverse are only a few areas that will be affected by NFTs.