With NFTs, digital objects can be transformed into unique items. The trend is reaching gaming and encountering a lot of resistance. MeinMMO author Maik Schneider, however, views the development positively and sees great potential in the technology behind NFTs: blockchain.
NFTs (Non-Fungible Tokens) have stirred up quite a bit of dust in the gaming community. With this technology, unique items can be created from digital objects such as images, lines of code, or goods in a game. This prospect does not appeal to many players.
There is criticism regarding the environmental aspect because the creation of NFTs consumes a lot of power. The close link to cryptocurrencies also leads to NFTs being seen as purely investment assets for the rich and speculative gamblers.
Many players fear that their beloved hobby may mutate into a kind of side job due to the increasing monetization, focused entirely on profits and the most valuable NFTs.
Overall, I consider the current harsh criticism of the new technology to be exaggerated. Because NFTs are much more than just speculative objects with the prospect of quick profit. They represent gaming’s entry into blockchain technology.
Now I openly admit that I am a fan of NFTs and blockchain solutions in gaming. NFTs and blockchain have the potential to make games and the internet as a whole safer for all of us.
Before his career as an author, Maik completed commercial training and studied economics. He has been following blockchain technology with great interest from the beginning.
Value of Blockchain: It’s About Security
Let’s start with some background information on the technology behind NFTs.
It’s about giving digital objects a verifiable signature that makes the object unique. This can be images or videos, but also purchasable cosmetics in video games.
It’s not just about making a specific object completely unique. There can also be many copies of one object, all of which are NFTs. Or only the original is an NFT, and copies of it can be created.
The important thing is the verifiable signature. This allows the digital object to be attributed to a clearly identifiable owner. Blockchain technology is used for this purpose.
This particular type of data storage allows for an unprecedented level of protection against tampering on the internet.
Roughly speaking, the blocks of a blockchain check each other for errors, creating a large chain of data that builds upon one another.
If a link in the chain is faulty, the technology recognizes the error and does not accept the new link. All data must correlate with one another.
Furthermore, blockchains are generally organized in a decentralized manner. The data is not only stored on one server, but any authorized participant can download and view the blockchain or parts of it.
If someone wants to manipulate the system, multiple blocks must be changed. However, since the blocks are stored on countless computers and networks, those blocks would also need to be altered.
These simple principles – mutual checking of the chain and decentralized storage – make blockchain so innovative. The high resistance to tampering is the most advanced aspect of the technology.
In times when hackers can even gain access to our toaster, blockchains have the potential to prevent such digital intrusions. The old systems have reached their limits here.
The blockchain technology became widely known through cryptocurrencies. The system is so secure that entire currencies are based on it. The two largest are “Bitcoin” and “Ether.” The blockchain serves as a sort of central bank for these currencies.
And it is exactly this high level of security that makes blockchain technologies like NFTs so valuable for gaming.
Double speculation leads to understandable distrust
NFTs are criticized due to their proximity to highly speculative cryptocurrencies. Currently, many NFT transactions are conducted via the Ethereum blockchain, which simultaneously supports the cryptocurrency “Ether.”
This has a double speculative nature:
- The NFT itself can gain or lose value
- The Ether tokens received from a sale can also increase or decrease in value
Criticism of this structure is certainly justified. Who would want to have a highly speculative element in their game? This attracts investors who invest resources to extract profit from the system.
I have read many comments on NFT articles on MeinMMO, and particularly this close connection to cryptocurrencies concerns readers. It’s about how personal gaming consumption could change – negatively.
BavEagle writes on MeinMMO: “Soon gaming won’t be a leisure hobby anymore, but a side job including market analysis and hourly checks of NFT item prices.”
QWLU is also concerned about what might happen when more monetary value is present in a game: “Today you already see AFK bots that just join and level up to farm skins and similar items. What will it look like when those items even have a bit of value…?”
And I agree with our readers. Currently, games and systems are being developed with a close interrelation of NFTs and cryptocurrencies. In such games, exactly that would happen: Risk-taking speculators would influence the economy of a game.
But NFTs are so much more than speculative microtransactions and the financial basis for large bot farms.
However, if one separates the thoughts behind NFTs and blockchain from the volatile cryptocurrencies, then one has an innovative storage technique that could bring more security and individuality to gaming.
Blockchains and NFTs can do so much more
Blockchain technology has been around for a few years now, and more and more companies are relying on this storage format – completely without cryptocurrencies in tow.
For instance, the technology company IBM offers its own blockchain solutions, which enable businesses to make their accounting safer and more efficient (via IBM.com). This isn’t about mining the next token and making quick money.
It’s about security, transparency, and efficiency. Of course, IBM wants to profit from it. But this is not speculation; it’s a modern offer for secure and tamper-free data organization.
Companies build and organize their own blockchain that can store and clearly display supply chains. Depending on needs, users can view a certain part of the blockchain.
As consumers, we can get information about production sites and the path a good has taken. The key for access is an NFT we receive along with the product.
Such blockchains are also not created based on the “Proof of Work” principle, which drives up the power consumption of the currently largest blockchains (token mining).
These secure systems can be transferred to many applications on the internet. The more blockchain technology becomes standardized over time, the more “cross-chain” applications will emerge, where data from one blockchain interacts with another.
The real breakthrough of the technology has yet to be achieved. NFTs are the vehicle by which this breakthrough could occur in gaming and beyond.
History repeats itself – comparison to the internet
Payment flows typically seek the path of greatest profit, and if blockchains can also bring financial advantages apart from cryptocurrencies, it’s worth investing in the technology.
The current speculative excesses lead to more attention – across nearly all industries. Entrepreneurs are dealing with blockchain technology and discovering, beyond quick NFT money, the security advantages.
It was quite similar at the start of the internet hype. Companies pumped massive investments into the new market, built server capacities that no one needed, and created the so-called “Dotcom Bubble.”
The price bubble burst, many values were lost. In Germany, the significant loss of many private investors through purchases of the “T-Share” is particularly remembered. This “people’s share” reached a peak of just over €100 before collapsing to nearly €8.
However, the server capacities created during the “Dotcom Bubble” were still there and made free services on the internet like MeinMMO possible. Before, one had to actually pay for the traffic generated by visitors to a website.
Blockchain with NFTs stands at a similar point now. The boundaries of the markets are being tested, and the possibilities of the technology are being explored. New blockchains are emerging and disappearing, while others are establishing themselves and even collaborating.
Whether a crypto bubble will burst or not, the knowledge about blockchain technology has spread, and the advantages over old systems in terms of security, efficiency, and adaptability are convincing.
Conclusion: Profit is important for new technologies – but reassessment is as well
I think the harsh criticism of NFTs is unfair. The technology is not responsible for exaggerated speculation, it’s the people behind it.
There are already countless games that finance themselves through pay-to-win mechanics – keyword “freemium.” A few affluent customers pump a lot of money into a game that many others enjoy for free – but with less success or at least less sparkle.
There are already games where play-to-earn plays a significant role, meaning earning money through grinding. In poorer countries, entire families rely on such systems.
That is why I consider criticism to be important. Your opinions have led to pay-to-win mechanics having a bad reputation. Your opinions guide developers on the path to the future.
However, it is also important to be open to new technologies.
The Java vulnerability “Log4j” has shown us once again how vulnerable our current systems are and that it is time to find new security solutions.
This vulnerability allows hackers to execute malicious code – sometimes quite easily. In some applications, it’s sufficient to send a message in a chat to execute the code.
A spread of blockchain technology would be a significant step in the right direction, and NFTs help bring the technology closer to the public and finance the implementation.
Although blockchains were also affected by the vulnerability, the chain cannot simply be fully manipulated through one access point.
Therefore: Stay opinionated, but also fair. With NFTs and blockchain, it’s about more than just profit greed and microtransactions. It’s also about a secure and protected internet.
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