The use of NFTs by cyber games can explain their utility

Synopsis: NFTs provide the assurance of immutability and guarantee of uniqueness. However, most of the cutting-edge innovation in NFTs are taking place in the gaming space.

Introduction

When a person purchases the non-fungible tokens (NFT) of a work of digital art, he is not buying the artwork itself. He is just purchasing a record on a blockchain ledger that identifies him as the owner of that record, not the artwork with which it is associated.

He is neither entitled to rights over the underlying artwork, nor he can prevent others from copying it.

What are some significant use-cases of NFTs?

Gaming: The non-fungible tokens are being used to attest the titles of in-game digital assets. This feels intuitively more appropriate than simply using them to signify ownership over digital art.

Zed.run, a racing game in which players race digital thoroughbreds on a virtual track. The horses are generated algorithmically from immutable virtual bloodlines and use blockchain technology to validate pedigree.

A number of games such as CryptoKitties and Axie Infinity have been built along these lines, using blockchain to assure players of the novelty of artefacts algorithmically generated within the game environment.

Cryptokitties with rare Cattributes command a very high price among collectors, giving players every incentive to put in the effort necessary to play.

Opportunity to earn: Since play-to-earn game are thriving, players have significant opportunities to earn money within the game ecosystem.

In many countries, people have flocked to the game in large numbers, particularly from among poorer sections of society. For instance: Over 40% of the players active on Axie Infinity today are from the Philippines.

Notion of the ‘metaverse’: Metaverse is a sort of immersive digital environment which is likely to be the next stage in the evolution of the internet. In the metaverse, everything is a digital asset hence, we need a way to establish title over artefacts in the digital environment, where NFTs can play a huge role.

Dispute resolution: Games are self-contained digital environments that operate according to a set of rules of their own device. Disagreements over the ownership of in-game digital assets can escalate very quickly, and they are often beyond the ability of traditional courts to resolve.

In such cases we need a way to establish title over artefacts in the digital environment. NFTs could well be the solution to that problem.

Source: This post is based on the article “The use of NFTs by cyber games can explain their utility” published in Livemint on 29th Sep 2021.