The rise of cryptocurrency and blockchain has given rise to unprecedented opportunities which previously belonged exclusively to an elite circle of financiers and world movers. The latest product that has been churned out of these revolutionary developments is the NFT, which is short for non-fungible token. While it was the art world that boomed at the earliest stages of NFTs, other arenas are starting to join the fray. Today, there are all kinds of NFTs in the market, NFTs by celebrities, NFTs by college athletes, even NFTs by fast-food chains. And the gaming industry has, well, gamely jumped in.
And now you’re thinking if you want in too. Read on to find out more about NFT games.
How NFT games use blockchain
The Witcher 3, Grand Theft Auto V, Red Dead Redemption are but some of the most popular video games that gamers spend countless hours on yet have nothing to show for their efforts at the end of the day, save for dry eyes and numb fingers. When you play a video game, you buy, sell, trade, level up, and do whatever it takes to up your score and win. But once you stop playing, all that means nothing to you because, in reality, nothing belongs to you. But blockchain in NFT games changes all of that for the world’s 2.5 billion gamers.
With blockchain technology, you can prove ownership of your specific game assets. Blockchain is a way of recording information on a digital ledger that makes it difficult or impossible to change it. The transactions are distributed across an entire network of computer systems on the blockchain. To change it will require the approval of all those involved in the blockchain. This makes the technology uniquely secure. Being decentralized, the blockchain is also available for every player to see and use.
NFT games use blockchain technology to “tokenize” specific game assets to prove unerasable ownership. Tokenization simply means turning something of value, such as an artwork, a bank account number, or any created content or property (virtual or real-world) into a string of digital characters or codes in the blockchain, thereby converting them into tangible and immutable assets that can be bought, sold, or traded.
NFTs are built on blockchain technology. An NFT is non-fungible. That means it can’t be interchanged with anything exactly like it. For instance, a bitcoin is the same as any other bitcoin and is, therefore, a fungible item. On the other hand, if your trading card is tokenized into an NFT, even if there are multiple sets made of the same card, that one trading card in your possession has metadata like no other. Each NFT card’s information, such as proof of current ownership and history of ownership will be distinct, making each card one-of-a-kind. And this creates provable scarcity—and value. Over time and as more people join in, the demand for the items in limited supply will drive up their prices.
NFT games spelled out
NFT games are more than just the crypto-collectibles in your digital wallet. In-game assets can include everything in the game, all its characters, rules, player interactions, mechanisms, and even digital items that you find in the game. All these assets are built on cryptos, which means that each one has an equivalent crypto value. You can then trade these in-game assets with other gamers to gain profits.
It’s the gaming tokens though that seems to have the most potential for scaling up in value because of their functionality. Unlike, for instance, digital skins which serve a more cosmetic purpose, gaming tokens can be used to create or upgrade weapons, give birth to creatures with rare attributes, and can be acquired by achieving quests or reaching certain levels within the game. Thus, they’re the more popular NFT in-game assets because of their many use cases.
Since NFT games can only work out if they are in a structured environment, their developers come up with Smart contracts that establish the rules for using the NFTs, like how and which tokens are swapped or purchased and so on. These Smart contracts are likewise stored in the blockchain. Each NFT game has its own rules.
How to earn in NFT games
Wherever there is value, there are monetization opportunities. And NFT technology has opened up the world of Game-Fi or the marriage of the gaming and finance industries. Here’s how you can cash in on the NFT trend in the gaming industry.
1.Monetize your gaming hours
Just like when you play a typical video game, you still need to buy the NFT game and collect the NFT assets (either by investing time and/ or money within a game) you need to play and win. These include such things as gear, weapons, cards, skins, etc. You can also get more in-game tokens through a play-to-earn model.
But unlike your average computer game, when you participate in an NFT game, you can own those items or tokens that come in limited quantities and which are, therefore, unique by themselves.
You can hold these in your inventory or in your NFT wallet. The longer you play, the more chances you have of earning tokens that you can sell later on.
Depending on the developer, these NFT in-game assets can also hold value outside of the games they were initially created for. For instance, you can take them out of the game and use them on other platforms or games. This feature makes your NFT assets more attractive to potential buyers as they can be used elsewhere.
You can also easily quit playing anytime and just decide to sell whatever assets you’ve collected in a marketplace, where you can earn real-world dollars.
2. How non-gamers can participate
If gaming isn’t your particular strength or interest, you can still make money over NFT items. It’s all about watching out for opportunities, such as when a developer releases items or weapons before these items become available for playing in the game. Other times, new items are dropped in the marketplace even before a game is released. If you can get in early on these NFT drops, you can speculate which ones to buy and collect for selling later on.
Certain games also allow sponsoring scholars. You can sponsor a scholar by providing the crypto capital for a player to join a game. Typical arrangements are a 70-30 or 50-50 split between the investor and the player.
A few watch-outs
As with any other investment, there are also risks involved with NFT games. You can plunk in a lot of time and effort in a game to earn tokens, only for that game to lose its hype—and value— over time. Axie Infinity had so much noise at the start that a lot of investors jumped in. However, the ruckus seems to have settled down quite a bit, especially with newer games slated for release in the coming months.
You can also make the mistake of transferring your crypto that doesn’t support your NFT token standard, be tricked by a scammer into sending them your NFts, give wallet access to a malicious Smart contract, or simply lose your NFT as part of the rules of the game.
Just like any investment, watch out for scammers, only trust reputable gaming sites or companies, and learn the rules of the game.
The NFT game market is still in its infancy stage. Have the early-gamer advantage by taking the time and effort to understand how NFT games work as soon as possible. Once you’re comfortable with the ins and outs of NFT games, when that big NFT game break comes along, you can readily grab the opportunity for massive monetary rewards.