NFT-Based Video Game Helps Players Earn Crypto While Playing Online

Mall teenagers grow up dreaming of making a living creating and playing video games. With the rise of online games based on non-fungible tokens, this dream can come true. One of the hottest cryptocurrency trends is playing video games to earn NFTs on platforms like Axie Infinity and Animoca.

What is an NFT?

Non-fungible tokens are digital assets that correlate with digital investing, such as in art, video games, videos, and music. While a traditional art collector might purchase a bronze sculpture, an NFT collector would purchase a digital representation of a sculpture along with any metadata the creator wishes to include in the file, such as a digital signature.

In addition to the work itself, the NFT buyer obtains exclusive rights to the digital work. The blockchain secures these rights by ensuring that no one can change ownership record or insert a new NFT into a blockchain, according to Ethereum.org, the organization that supports the Ethereum network — the most widely used network for NFT.

The market first saw NFTs in 2014, although they have only grown in popularity in recent years.

What is the purpose of an NFT?

NFTs offer a way to monetize digital assets. In other words, they give creators the ability to sell their work without involving a third party. For example, Jack Dorsey – one of the co-founders of Twitter – sold the first tweet he ever wrote as an NFT and made a profit of over $2.9 million.

Are NFTs cryptocurrencies?

No, NFTs are not a cryptocurrency.

NFTs are similar to cryptocurrency only in that they exist on a digital platform and use similar technology. Physical silver and cryptocurrency are considered “fungible” because you can exchange dollars for dollars and tokens for tokens based on a uniform value for each currency.

NFTs do not offer uniform value and cannot be traded in the same way. Each NFT has a unique digital signature.

How do NFTs work on online gaming platforms?

NFTs are a way to decentralize ownership of video games. Instead of big corporations taking all the profits from gamers, gamers are stakeholders within the platforms. NFTs in online games work in two ways. The first is about platform-specific NFTs and the second is about earning NFTs while playing. The latter is called “play to win”.

A game NFT can consist of an avatar, video game skin, skill, or game item used to advance in a particular game. The NFT owner gets exclusive rights to the item, so they can keep it, sell it, or trade it.

Good to know

Gaming platforms that reward players often require an upfront investment to access the network. Some games cost over $1,000 before players can join. It is possible to join with less money, but a lower initial investment also reduces the profit margin of in-game winnings.

Platform specific NFTs

Each NFT has its own set of rules that describe how players can trade and use it. It is important to note that some game NFTs only exist on their platform. For example, someone can create a character or avatar and sell or trade it to another player. The idea is to trade and earn more valuable NFTs over time.

The technology that regulates NFTs is called a smart contract. A smart contract contains the rules for using an NFT in a game. When these requirements are met, the smart contract automatically executes and is stored on the blockchain to establish a value and trading history.

Earning NFTs for playing video games

There are also ways to earn NFTs by playing on certain online gaming platforms like Axie Infinity and Animoca Brands, which has a popular game called The Sandbox. Platforms reward users with tokens and NFTs for playing longer.

NFTs can exist in-game or outside of the game in the general digital realm.

Turn NFTs into cash or cryptocurrency

The question many consumers are asking is: how do you turn an NFT into real dollars or cryptocurrency?

The amount a player earns is based on the perceived value of the asset within their platform. Players can sell and trade in-game assets using the in-game utility token. Players at The Sandbox, for example, transact using SAND tokens, which are available on a number of exchanges. NFTs can also be sold and traded on an online market, auction house or trading platform.

If players sell NFTs for cryptocurrency tokens, they can use the tokens to make purchases from retailers and other businesses that accept that specific cryptocurrency as payment. They can also sell cryptocurrency tokens for real money if needed.

What are the challenges of NFTs?

Currently, NFTs are aimed at a small group of consumers. They are very technical, so they present obstacles for the consumer who is not as tech-savvy. Another hurdle is that the value of an NFT is implicit based on how players and other consumers value it. Consumers run the risk of losing money on long-term NFTs.

There is also a risk that some players will not use NFTs as they intended, within their digital platforms. Selling an NFT outside of its platform for profit can have a negative impact on gaming platforms.

NFTs also raise security concerns. Earlier this year, hackers stole $600 million worth of cryptocurrency from Axie Infinity’s Ronin network. Although NFTs were unaffected and Ronin quickly identified fraudulent transactions, the hack shows that blockchains are not 100% invulnerable – and, given that the game economy is based on NFTs, neither do NFTs.

Final take

Earning NFTs in online games can be a lucrative way to make money, not to mention fun. Knowing more about the rules and regulations before getting involved in NFT trading is the best way to cash in NFTs safely..

NFT Games FAQ

  • What are the best NFT gaming platforms?
    • Popular NFT games include:
      • Alien Worlds
      • Axie Infinity
      • battle runners
      • raging gods
      • gold fever
      • Guardians Guild
      • neon district
      • Exploded Earths
      • The 3D sandbox
  • Are NFTs secure?
    • NFTs are safe if players understand how they work, how to transfer them, and how they can be lost. Here are examples of ways consumers lose NFTs:
      • Transferring an NFT to a digital wallet that does not recognize its value.
      • Being the victim of fraud attempts and transferring the NFT to a scammer.
      • Giving access to the wallet to a malicious smart contract (hacks can be common in the digital space).
      • Losing an NFT to another player under the rules of a particular game.
  • Can you lose money on NFTs?
    • Yes, some NFTs may become less popular. Since the perception of value plays a role in the pricing of an NFT, it is possible to lose money on a particular NFT.
  • What is the future of NFTs?
    • Right now, NFTs exist in their own space. Experts predict that the industry will need to make NFTs more mainstream for consumers to reach their full potential. This may mean tying the value to a cryptocurrency or similar exchangeable token.

Daria Uhlig contributed reporting for this article.

Information is accurate as of May 24, 2022.

This article originally appeared on GOBankingRates.com: NFT-Based Video Game Helps Players Earn Crypto While Gambling Online

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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