While video game stocks may be incredibly popular among traders these days, those looking for the profitable cutting-edge of video game culture may want to hone their attention on blockchain gaming technology. Not only do blockchain-based cryptocurrencies offer great opportunities for virtual economies to become more watertight, but blockchains have helped to birth the NFT.
These non-fungible tokens have found many uses within the video game industry from immortalizing sought-after in-game items to creating entirely new opportunities for games that can become incredibly profitable for their players.
What is a Blockchain, and How Do Games Use Them?
Unless you’ve been living under a rock, chances are you’ve come across the term blockchain before. The most well-known financial blockchain is Bitcoin, a cryptocurrency.
While blockchains can be both private (viewable only by their owners) and public (viewable by everyone), with gaming blockchains existing on both ends of the spectrum, they share the same DNA. The fundamentals of blockchains see them create a ledger that records each and every transaction on the network in a watertight, un-editable format. Essentially creating a black-and-white record of every transaction (or event) which occurred on the blockchain.
The block in blockchain refers to an individual snapshot of this ledger that is added. From an individual block, more information is added through cryptography, meaning that once a block has been made it can never be edited—even if someone would want to do so.
For the financial world, blockchains offer opportunities for finance to become decentralized, absolving the reliance on banks to keep tabs on transactions, while also laying bare all records which may help to circumvent money laundering.
In video games, blockchains see a very similar use case. Yet it is NFTs that truly shine in the world of video game blockchains.
What’s a Gaming NFT?
Like financial transactions or other data, an NFT is a piece of data stored on a blockchain. The key difference is that unlike a bitcoin—which is identical to all other bitcoins in terms of value—an NFT is wholly unique. In-game, this means that an NFT could be a unique in-game item or one of a select number.
While games have dabbled in creating unique items for years, the blockchain structure adds newfound levels of security to the process. Ensuring that the items’ transactions are clearly recorded and can never go astray.
Further still as many of these gaming NFTs are minted on existing blockchains (Ethereum), players are technically able to remove gaming NFTs from the context of the game. Keeping hold of valuable items even if a game were to close its servers.
Blockchain Gaming and NFT-Based Games
With this new technology, a whole new genre of games has come to the fore. Those are NFT games. While not unified by gameplay, each of these games uses NFTs as a central part of their systems, often even allowing these NFTs to gain large amounts of real-world value.
Games like Axie Infinity, Sorare, or the godfather of the genre CryptoKitties place NFTs at their core, seeing players collect, trade, and even create unique NFTs which can even be one of a kind. This imbues each of the NFTs with great value, both within and outside of the ecosystem of the game.
For example, CryptoKitties sees players breed unique cat-like characters to create new ones who inherit the traits of their parent kitties. While this style of breeder game is nothing new, tying the cute kittens to NFTs secures the value, importance, and transaction history of each cat—ensuring that no player could ever find a way to multiply or nefariously take control of a particular kitty.
Games like Axie Infinity step up this formula by offering more engaged combat-heavy gameplay to the delight of many players.
Many of these NFT-based games also find themselves working directly with cryptocurrencies like Ethereum (ETH), due to their frameworks being built directly onto the Ethereum network, and thus their NFTs being minted on the network.
But further afield from NFT games themselves, NFTs offer the opportunity for developers to mint in-game items, imbuing them with secure, long-term value. For example, imagine your rarest MMORPG items or armor sets were minted as NFTs, allowing you to legitimately own them. But it goes even further than that…
A New Avenue for Merch
Beyond games, NFTs have made waves in the world of art and merch. From NBA top shots to the mouth-watering sales from artists like Beeple, NFTs have displayed great potential for merchandising. Presenting a new opportunity for game makers to create gaming NFT-based merch.
Combining this idea with some of the ones we covered earlier, we may see gaming companies end up producing multi-form NFTs which, for example, could be used in-game, displayed in the real world, or even taken from one gaming ecosystem into another. Just imagine owning the rarest item in a given game and being able to display it in multiple different realities. Now the value of gaming NFTs really comes into full focus.
Gaming and technology are intrinsically linked, meaning that innovation often spills over the boundaries of one into the other. NFTs are a prime example of this. But with this type of tokenization still in its infancy, it’s clear that we have a lot to look forward to as NFTs and gaming become even more intertwined.
But if you can’t wait for your most wanted video game item to become an NFT, don’t worry. Whether you’re lusting after a Red Rebel ice pick in Tarkov or perhaps a THICC items case, Eldorado.gg has you covered as a one-stop-shop for any in-game good.
NFTs and Video Games: A Match Made in Heaven?