The Future of Non-Fungible Tokens (NFTs) in Crypto-powered Games

Crypto-powered games have been the talk of the town in recent times. Professional gamers play and win huge amounts of cryptocurrency or virtual rewards through such games. Now, blockchain has simplified the in-game transactions of such virtual assets between the gamers. And if we are talking about such assets then we can’t miss out on a technical term that is taking the crypto-gaming industry by storm. It is a Non-Fungible Token (NFT).

In this blog, I will tell you what NFTs are, how they are being used in crypto games and their bright future in this rapidly growing industry.

What are the NFTs?

Any sort of currency that we transact in our daily lives, they are all “fungible”. Being fungible means that an item can be interchanged with other identical items. For example, if you lend someone a $1 note then it will not matter if they return exactly the same note when settling the dues. It could be any other notes of the same denomination. When you play games for money, the reward points (virtual cash) that you score are usually fungible in nature. You may use those points to buy more ‘lives’ or ‘tools’ in a specific game format.

A non-fungible token, on the other hand, is a digital asset that is unique, with a traceable history, and cannot be exchanged for other assets. It is created and stored on blockchain frameworks that facilitate direct, peer-to-peer exchange.

If we talk about their implementation then the Ethereum community has adopted the ERC-721 protocol as a standard for building and implementing them. Illustrious projects like CryptoKitties and CryptoPunks follow the ERC-721 protocol for their NFTs.

NFTs and crypto-powered games

NFTs can transform the manner in which the crypto-games are being played. In fact, they can bring innovative gaming formats into existence. Before we go any further with this article, let me tell you three unique features of NFTs that are making them popular amongst leading game developers:

1. They can be traded by the players even outside the games.
2. The properties of such tokens cannot be altered by the developers in any way.
3. If the game closes down any fine day, the NFTs will still exist. Their properties can be easily used in other games with similar formats.

So the NFTs are basically used as digital collectibles that are permanent in nature and remain unaltered. Their applications in games can be classified into four categories. I have summarised them in the table below:

Information source: Decentraland.org

NFTs can make you digitally rich!

If you are playing a game that involves NFTs, then you may accumulate fame and wealth in the digital community. What do I mean by this statement? Let’s consider a fictitious game that offers diamonds as an NFT. You can collect these diamonds and donate them to a charitable cause. Keep in mind that everything is happening in the digital world, not real. You are now a digital philanthropist in the online community. If you sum it up, you get paid to play games and can use your earnings for the betterment of others.

Challenges and drawbacks of NFTs

In the tech world, every innovation has an underlying challenge or drawback associated with it.  NFTs are not an exception either.

Basically, the framework (ERC-721) on which these NFTs are being developed is entirely new. So it will take time for them to be integrated with crypto-gaming platforms in a flawless manner. Creating, testing and putting them into action is also an expensive affair altogether. Thus, the global community of developers will not be able to adopt it instantaneously.

What’s in store?

The success stories of CryptoKitties and CryptoChunks have proved that virtual assets in games can be tokenized for practical benefits. The transactions between gamers will be standardized once such ideas have been implemented on a global scale. Ultimately, it will pave the way for many such novelties in the years to come.