Blockchain Gaming and NFT's
Why we chose to LEVERAGE the Non-Fungible Token?
Now that we’ve discussed the defining characteristics of NFTs, we can begin to explore the advantages of deploying these tokens in the context of online gaming.
The gaming industry is generating significant revenue across three primary market segments: mobile, PC, and console gaming, each valued in the hundreds of billions of dollars and projected to grow further. According to a report by Newzoo, the global games market is expected to generate $215 billion in 2024, with mobile gaming representing the largest segment, followed by console and PC gaming. However, despite this robust growth, traditional gaming models have been primarily one-sided in terms of value creation, where players invest in expensive hardware and games, but the in-game purchases offer little value beyond the confines of that game.
In contrast, blockchain-enabled games, many of which are decentralized applications (dApps), aim to transform the gaming landscape by creating an environment where players are able to capture real value from their gameplay.
This is made possible through the use of non-fungible tokens (NFTs), which are unique digital assets that can be tokenized and traded across multiple games or sold for cryptocurrency, providing players with opportunities to generate lasting value from their in-game activities.
The blockchain gaming market is set to expand significantly, with some analysts predicting it could capture 5% of the overall gaming market by 2025.
Non-Fungible Tokens (NFTs) in Gaming
NFTs represent unique digital items that are stored on a blockchain, ensuring the scarcity, authenticity, and ownership of these items. The three key characteristics that distinguish NFTs from other digital tokens are:
Non-Fungibility: Each NFT is unique and not interchangeable with any other token, representing a distinct item, asset, or experience. For example, while cryptocurrencies like Bitcoin (BTC) are interchangeable, NFTs are one-of-a-kind assets.
Rarity: Scarcity plays a crucial role in the desirability of NFTs. Collectible NFTs like CryptoKitties or Rare Pepe can fetch high prices due to their rarity and demand among collectors. The inherent rarity is verified by the blockchain, making it irrefutable and highly valued. For instance, a CryptoKitty named Dragon sold for 600 ETH, which was valued at approximately $170,000 at the time.
Indivisibility: Unlike cryptocurrencies, which can be broken into smaller units, NFTs must be bought, sold, and held as whole units. This indivisibility makes them more like collectibles, such as artwork or rare items, rather than everyday transactions.
The Benefits of Gaming NFTs
Although many NFTs use Ethereum’s ERC-721 token standard, NFTs are also prevalent on several other networks, such as TRON (Blockchain Cuties), EOSIO (EOS Knights), and NEO (Blocklords). The many benefits of decentralized gameplay include:
Ownership: Traditional in-game purchases are one-time, non-transferrable investments that remain locked in a single gaming world. In contrast, using NFTs in gaming environments grants players ownership of their in-game assets instead of game developers. Through blockchain technology, gamers can save in-game purchases, sell them to other players, or move them into other supported games.
Provable Scarcity: Collectors value rarity and authenticity, and the scarcity of in-game NFT purchases is provable through the immutable records embedded in an NFT’s underlying blockchain network. This distributed public ledger validates the number and uniqueness of each NFT as well as its ownership history.
Interoperability: Traditional online games exist on centralized servers. As such, in-game assets exist within proprietary systems that don't communicate with others. In contrast, decentralized games exist on independent blockchains that act as the backend framework for other interconnected games. As a result, game assets represented by NFTs can be designed to be interoperable across different environments. For instance, two games built on the Ethereum network can feasibly support the same in-game assets like vehicles, armor, or even entire characters.
Immutability: When a traditional online game shuts down, users traditionally lose all of their in-game purchases. NFTs, however, exist independently of a specific gaming platform and live on the blockchain itself. As such, in-game purchases can be bought and sold regardless of what happens to the game, and new games can be designed to plug into an existing blockchain protocol. Furthermore, blockchain-enabled game assets cannot be duplicated or tampered with because of the permanent record each NFT generates upon issuance.
Challenges and Opportunities for NFTs in Gaming
While the adoption of NFTs in gaming presents promising opportunities, it also faces hurdles:
Mainstream Adoption: Many gamers and potential users may not be familiar with blockchain technology or the concept of NFTs. A survey by Deloitte in 2023 indicated that 45% of gamers are interested in owning NFT-based assets, showing a growing awareness and interest. However, for NFTs to become truly mainstream, there is a need for education and more intuitive interfaces that simplify blockchain integration.
Speculation Risks: NFTs, due to their perceived value, may attract speculative investors looking to flip in-game assets for profit, rather than using them within the gaming environment. This could distort the intended value proposition of NFTs, turning them into commodities rather than enhancing the gaming experience. The value of NFTs could be driven more by market speculation than their actual use in games.
Partnerships and Innovation: As more traditional gaming companies recognize the potential of blockchain and NFTs, partnerships with established blockchain platforms will likely grow. These collaborations will help streamline NFT integration into games and improve user experience. A notable example is Ubisoft, which has experimented with NFTs through its Quartz platform, enabling players to buy and sell in-game items as NFTs.
NFTs and the Future of the Blockchain Gaming Industry
The potential for blockchain gaming and NFTs is immense, with the opportunity to disrupt not only the gaming industry but also the way digital economies function. As the infrastructure for NFTs improves and more games adopt decentralized technologies, blockchain-powered games are expected to become more mainstream. Newzoo forecasts that blockchain gaming could contribute over $10 billion by 2026.
Players will increasingly be able to retain and use assets across a wide range of games, fueling the growth of new gaming economies.
As more non-blockchain-focused brands experiment with NFTs, the infrastructure for NFTs will continue to evolve, with a focus on making them more user-friendly and appealing to a broader audience.
The growing success of gaming dApps will accelerate these changes, opening up new possibilities for the entire gaming industry.
In summary, NFTs in gaming have the potential to revolutionize the way players interact with in-game assets, offering true ownership, provable scarcity, and interoperability across multiple games but have some 'holes' when it need to represent complicated items.
So, the Bullshit Lab ™ Foundation is leveraging these technologies to create a new correct contracts management, called; "SCT" to allow fair ecosystem for everyone and for every existing item on earth.
Last updated