By Shubham Gupta
The world of gaming is evolving rapidly, and so is how gamers can own and trade in-game items. Non-fungible tokens (NFTs) are the latest innovation in this space, allowing gamers to buy, sell, and trade unique digital assets using blockchain technology.
Many argue that NFTs are nothing more than so-called “Monkey Art” taking a dig at BAYC, but I beg to differ. We are yet to see the ChatGPT moment for web3. As and when Metaverse becomes a reality and gains mainstream popularity and adoption, it’s likely that a lot of users will enjoy having a limitless life in that virtual world. And when it thrives, more people would want to stand out in the crowd similar to the once having blue verification ticks popular on social media platforms like Instagram and TikTok where users spend hours scrolling through user-generated content.
Similarly, to stand out in the metaverse we would own different forms of assets like cars, properties, or other things that we love to own and collect in real life. These NFTs would act as an ownership certificate, social proof, and status symbol similar to how our assets work in real life. NFTs are hence the asset class of the Web3 Revolution.
One of the most significant advantages of NFTs in gaming is their decentralization, which allows gamers to own their virtual assets rather than the game developer. This means that players can transfer their assets between games and platforms, providing them with more control and ownership of their in-game items. Additionally, NFTs can be used to reward gamers for their creativity, such as creating custom skins or game mods, which can foster a more creative and diverse gaming community.
The major benefit of NFTs is that they can create a new revenue stream for game developers. By selling unique digital items, such as skins or other virtual goods, game developers can encourage players to spend more money on the game, thereby increasing revenue. NFTs also facilitate cross-game item trading, allowing players to use their assets in different games and creating a new level of interoperability between games, which can further increase player engagement and spending.
NFTs can also be a status symbol in the virtual world, just as owning expensive cars or luxury homes is in the real world. People are likely to spend more time in the metaverse as it grows in popularity, and having unique and rare digital items may become an important part of one’s online identity. Despite the potential benefits, there are also several drawbacks to using NFTs gaming. The energy consumption required to support the blockchain gaming infrastructure is significantly higher than that of traditional gaming.
One of the concerns is the potential for scams or fraudulent activities in the NFT market. The unregulated nature of NFTs and the lack of common knowledge of web3 also means a lot of unsolicited negative players in the economy which destroy common faith NFTs can also create exclusivity and inequality within the gaming community. Only those who can afford to purchase rare or valuable NFTs will have access to certain in-game items or experiences, leading to a sense of exclusivity and inequality. This could potentially lead to a less inclusive and diverse gaming community.
Finally, the legal status of NFTs is currently unclear in many jurisdictions. This can lead to regulatory uncertainty and potential legal issues, as the laws governing the sale and ownership of NFTs are still evolving.
The author is co-founder, STAN