Crypto Assets and Gaming are two of my favorite topics that I closely follow. When the technology that is the foundation for these crypto assets-(Blockchain) combine with gaming we get use cases like NFT or Non-Fungible Tokens.
Fungible Vs Non-Fungible Tokens
How do we learn anything new? We start with the basics.
Fungible means anything that is freely interchangeable, divisible, something you can use and own.
A Fungible token is thus any token that you can use, own, interchange with another token of the same type, uniform in nature. Fungibility is a trait of any token that allows that token to be uniform, further divisible, and interchangeable. For example, ERC-20 standard tokens are all Fungible tokens.
A Non Fungible Token thus by logic has to be the opposite. A token that is non-interchangeable, indivisible, and distinctive. The trait that allows a token to have all the above mention qualities is the non-fungibility of the token.
To summarize, you can refer to the below image.
Identify the fungible and non-fungible token below.
Unique, Rare, and Indivisible. This is what sets NFT's apart from FT's and this is why NFT's are so important for video games because they are Unique, Rare, and Indivisible. The concept of non-fungibility is noting new. For long we have been enamored by non-fungibility. Ever wondered that the username you wanted is taken by other users. This is non-fungibility at play. A website domain with a very specific name can be worth a lot to the right customer. Again Non-Fungibility.
But with the tokenization of non-fungible assets, we take this to even one step further.
NFT gives us-
Your username can be taken back by the website. NFT's cannot. Blockchain technology ensures that.
You cannot transfer the username. But with NFT that is not the case. You are free to transfer it.
Blockchain technology ensures you get the authentic token and eliminates fraud.
Use-Case of NFT's
In-Game Items/Collectibles. Ever played Diablo III? Remember all the loot you get. Any of the loot can be converted into NFT. The problem with traditional gaming is that they do not allow for the transferability of these items and rarely any game allows you to trade or sell your collected items and those who do as Diablo III Auction House fails miserably. NFT solves this. It allows you to take these assets to other games as well.
Imagine games like Magic The Gathering, Hearthstone with NFT's.
With NFT's this can be avoided. Blizzard banned a player along with his game possessions for voicing his concerns over Chinese govt atrocities being committed in Hong-Kong.
This Blizzard issue highlights one real problem in today's gaming community. Every game provides us with in-game items and we can use it until we are banned from using them. Thus the centralized nature of these items will never allow us to completely own them even if we worked hard to get them in the game.
Another field that is experiencing increasing adoption of NFT's is Art/Digital Art. Artists can have proper copyright for their art and buyers can be sure that the Art they are buying is authentic or the one that they actually want instead of a fake copy. Blockchain takes care of Proof of Ownership. Artists don't have to rely on third parties anymore to protect their work thus eliminating the middleman and ensuring more revenue for the artists.
3. Virtual Assets
Games like Decentraland, Upland, Cryptovoxels based on the blockchain allows you to own a piece of land that offers proof of ownership all because of blockchain and NFT's.
4. Real-World Assets.
Imagine securing your academic records, ownership of real assets like Land, Car, House all via NFT.
This is just the tip of the iceberg. All these use cases bring limitless possibilities with them.
Epic Games makes USD 300 million monthly via microtransactions for Fortnite. And none of these items are truly yours.
Gamers playing Activision games spent over $4 billion on micro transactions in 2017.
Rockstar owner Take-Two makes 58% of its money from microtransactions and DLC
This tells us gaming alone is a vast market for NFT's. And probably the most mainstream as well. Although Blockchain gaming is not on the levels of what Take-Two games are but it is getting there. I am especially excited about this game which has been in development for quite some time and looks very good aesthetically and plays solid as well. It looks a very well polished game with actual gameplay and employs NFT's in it. I will be posting an article for the same game in a day or two.
We have big names coming up or expressing their interest in the market for NFT's. Some of them include-
Ubisoft and their recently launched game Rabbids Tokens.
Nike, Luis Vitton, Formula 1, Vodafone, Samsung, NFL, NBA are all some of the biggest names with plans to employ NFT in some way.
NFT Market Cap
NFT Player Count
NFT's transferred in $ value
The market looks very promising and with the ever-increasing popularity of blockchain, crypto assets, and increasing adoption it is only a matter of time when we start seeing NFT being adopted by mainstream organizations.
Meanwhile, why don't you go and grab some NFT's for yourself and make some money?