What is an NFT?
NFT stands for “non-fungible token,” which is a unique digital item stored on a blockchain. NFTs can represent almost anything and serve as a digital record of ownership. Unlike dollar bills, which are all interchangeable, NFTs are unique.
How are NFTs connected to blockchain technology?
NFTs live on a blockchain: a digitally distributed ledger that records transactions and information across a decentralized network. It’s a public record verified by its community of users (read: people’s computers) rather than a central entity like a bank.
Blockchain technology can be used with any digital creation, and this is where the NFT comes in. An NFT is a digital token of ownership that’s tied to a specific digital creation. An image, video, a music track, software–anything digital–now can have a secure, trusted, and transparent record of ownership. This gives digital items the same “provable scarcity” as a piece of fine art with impeccable authenticity and provenance. But unlike a piece of fine art, an NFT’s credentials are public and immutable.
NFTs use smart contracts, which are automated computer programs that enforce their own coded rules. Smart contracts use a coded, automated system that executes a rule once a set of criteria is met. Buying and selling NFTs using OpenSea is powered by a smart contract protocol, Seaport.
Smart contracts, and the blockchain at large, allow users to track and validate NFT ownership.
What are the advantages of using blockchains for gaming NFTs?
Interoperability refers to the ability of different systems or components to work together and communicate with each other. Blockchains enable the transfer of NFTs between various games or platforms that support them, enabling greater accessibility, flexibility, and utility in the gaming industry. This utility can come in the form of cross-game use, meaning that NFTs like tools, weapons, skins, or other items can be used in multiple games.
Blockchains are decentralized systems, meaning that they are not controlled by a single entity. This can help to ensure fairness and transparency in the distribution and ownership of NFTs. Famously, Vitalik Buterin created the Ethereum blockchain after his World of Warcraft character was stripped of its powers. This experience showed him “what horrors centralized services can bring.” To many gamers, the concept of a single entity controlling their hard-earned game history is a scary prospect. Decentralization offers gamers a layer of protection and transparency through trustless and permissionless transactions.
The use of smart contracts on a blockchain can facilitate the verification of NFT ownership and facilitate transactions in a transparent and secure manner.
Once an NFT is recorded on a blockchain, the record cannot be altered or deleted. This ensures the authenticity and ownership of the NFT.
Where are NFTs stored?
NFTs are stored on a blockchain. Many different blockchains support NFTs, and OpenSea is compatible with a variety of them. NFTs are managed on the blockchain through smart contracts, which are self-executing contracts with the terms of the agreement between buyer and seller being directly written into lines of code. To buy an NFT, you need a crypto wallet. After buying an NFT, you’ll use your wallet to access your NFT as well.
What defines a gaming NFT?
A gaming NFT is an NFT associated with any digital item from the realm of online gaming and the metaverse: in-game items, characters, skins, customizations, maps, modes, tickets, collectibles–any digital creation that one would use in a gaming environment. It is a unique, blockchain-based item representing a specific item or element within a game.
For example, if you unlocked a tool while playing an NFT-supported game, you could mint that in-game item and take ownership of it. This ownership is verifiable, so your tool can typically be sold, collected, and used just like a real-world item.
Today, purchases or acquisitions made within a game go away the instant the game does. Your “ownership” is contingent on the game developers maintaining the game. Ostensibly, they could choose to take an item away or decommission items you own, causing you to lose them. Additionally, gamers are unable to resell items outside of the closed ecosystem of a given game. With gaming NFTs, digital items can be given provable ownership. Digital items and memorabilia can also have provable scarcity, which gives them a similar supply and demand dynamic to their real-world counterparts.
Another benefit of gaming NFTs is the potential of a new era of “interoperability,” or how things from one game or gaming universe can be used in another. Today, a game and all its items are siloed, which means they exist only within that game. You can’t use a weapon from Halo in the Call of Duty universe or play FIFA as Mario. But if more games leverage blockchain technology as an interoperable ledger for proof of ownership and standardize their systems for how to render and display items, NFTs could eventually allow in-game items from one game to be operable in more games.
Some of this work is dependent on blockchain technology, while some of it is dependent on how the games of the future are built. Organizations like Metaverse Standards are working to provide cooperation between organizations and companies to foster the development of an open and inclusive metaverse.
The sheer quantity of digital items created by both game developers and the billions of fans that play their games dwarfs many other areas of digital items, making gaming NFTs a growing application of blockchain technology.
What are popular types of gaming NFTs?
There are many different types of gaming NFTs, and their popularity can vary depending on the specific game or platform. Some of the most common types of gaming NFTs include:
These are virtual items that can be used within a specific game, such as weapons, armor, or other equipment. An example of this is Decentraland Wearables, items of clothing or accessories that can be worn in Decentraland, an Ethereum-powered virtual world.