Before now, financial institutions welded so much power. This is majorly because of the centralized and bureaucratic structure of these institutions. However, with the coming of the blockchain technology and the rate at which people embraced it, centralized financial institutions are gradually losing their grip on the economy of many people. Even with decentralization, people thought that cryptocurrencies are the only vehicle to decentralized finance. But no; there’s a new means of completing transactions without recourse to fiat and crypto coins.
Gradually, NFTs are becoming mainstream and people are already re-thinking what forms their store of value should take. Non-Fungible Tokens (NFTs) are seen as digital assets which serve as a store of value in place of fiat and crypto currencies. They are usually linked to works of art such as pictures, drawings, paintings, music etc. They are unique in that they are traceable to the original works of an artist. For example, while there are many copies and duplicates of Madonna of the Rock, the original drawing by Leonardo Da Vinci remains one and unique. The value of NFTs fluctuates, depending on factors such as rarity of the art, demand, popularity of the artist, and price of the underlying cryptocurrency.
The gaming industry is leveraging the blockchain and the associated NFT assets as a means of payment and reward. They are combining current gaming format (free roam, sandboxes, etc.) with the technology that underpins cryptocurrencies. The result is that players can actually own the digital assets they play with. These assets can be sold and resold to other players thereby, producing in-game currencies that can be sold for fiat and other cryptocurrencies.
With NFTs, it is not just the gaming industry that is experiencing a revolution; user experience is also becoming somewhat more interesting. With NFTs and blockchain technology allowing both players and creators to make financial gains, players could begin gaming for much more than just entertainment. Game assets could become valuable personable collectibles, with certain in-game features being more valuable than others.
In the first half of 2021, NFT sales totaled more than $2.5 billion and now sales are totaling around $1.24 billion every quarter. Huge collections like Bored Ape Yacht Club and Cyberkongz make up the bulk of these sales, but there are many new projects driving revenue. They have become so popular that Visa, one of the largest payment processing networks in the world bought into a collection.
Currently, NFTs are serving as characters, weapons, tools, land and other in-game commodities. These are currently being added to decentralized exchanges which are being traded upon. These features may one day be compatible with several gaming platforms. Whilst gaming, players can also earn play-to-earn tokens that are part of a decentralized economy. They can be earned by completing challenges, winning contests, and general trading with other players.
Beyond gaming, NFTs are used to put people into communities without gatekeepers or personal data. Users only need to possess the NFT to become part of the communities. Membership of such communities grants certain rights and privileges. An example of such communities includes the Bored Ape Yacht Club. NFTs are also useful as means of fundraising for charities. They are also impacting the world of music and film, with certain shows only allowed to be watched by NFT holders.
Combining the social utility with the NFT gaming boom is already having a multiplicative effect on growth and innovation. New projects will have more opportunities to shine, and older, solid projects will have the tools they need to move forward. Whether we accept it or not, NFT is already changing the way things are done around the world.