Aug 22,2022
Why Non-Fungible Tokens Are More Than Just a Buzzword in Gaming
The digital gaming market is booming. According to data compiled by Newzoo, the worldwide video game market exceeded $138 billion in value in 2018, with the market continuing to grow at double-digit percentage rates. It’s no surprise, then, that gaming has become one of the first real adoption cases for blockchain technology. From CryptoKitties to Etherbots and Beyond New York, virtual games involving animals or characters have been highly popular. Non-fungible tokens are an essential element for those games. Let’s explore what these tokens are and why they matter so much in gaming.

What Are Non-Fungible Tokens?

Non-fungible tokens (NFTs) are a specific type of digital token that is designed to be unique and non-interchangeable. NFTs are a type of token that is designed to represent something that isn’t easily interchangeable. So while cryptocurrencies like bitcoin are fungible, meaning one token is identical to the next, NFTs are not interchangeable. They are unique, either because they are indivisible or because they are associated with a particular owner. Unlike fungible tokens which can be exchanged for any other token of the same type, unique tokens come with built-in metadata that ensures each token has a specific and distinguishable value. Tokens can represent virtual goods, such as in-game items and collectibles, physical assets like real estate, or even rights to a service.

Why Are NFTs So Important for Gaming?

One of the earliest and most popular use cases for blockchain technology was gaming. Digital collectibles, or “crypto-kitties,” combined the excitement of collecting unique digital assets with the security and transparency of the blockchain. Gaming is a massive market with a huge potential for growth, and blockchain-based tokens can have many benefits for games. The digital gaming market is expected to reach $180 billion by 2022. Tokenization of in-game items can provide a wide range of benefits to both gamers and developers. Gamers can benefit from a more secure system that allows them to prove ownership of their digital assets and resell them if they desire. Using non-fungible tokens instead of digital assets that are currently stored on centralized servers can protect gamers’ items from being hacked or stolen. Developers can also benefit from using NFTs by being able to create limited edition items, transfer items among players, and integrate an item marketplace.