What are NFTs and their relationship with the video game industry?

Non-fungible tokens, or NFTs, are digital assets characterized by their uniqueness. To better understand their meaning, it is necessary to know two fundamental concepts, which are: fungible assets and non-fungible assets. The former are interchangeable and substitutable, and have a value based on their number, measure or weight, while the latter are not substitutable for others of the same kind, quality or quantity.

A fungible good is money. We can use as an example a 20-dollar bill, which, when used or consumed, is exhausted, and can be replaced by any other 20-dollar bill.

In this context, an example of a non-fungible good is a work of art, since it is not consumed when used and also cannot be substituted, since it is unique, is not equivalent to another, and therefore cannot be exchanged.

It should be noted that no NFT is the same as another, since they are characterized by their exclusivity and authenticity, there is no possibility of them being duplicated and they cover a wide range of items ranging from works of art and digital fashion items to video games.

Gaming industry

A disadvantage of the traditional purchase of gaming assets is that these assets are usually owned by the video game developer, so if the company were to close for any reason, users would lose the virtual assets for which they have already paid.

On the other hand, if the video game assets were NFTs, they would guarantee the user that their purchase is not subject to the company’s decisions, but that they already have the property regardless of what happens to it.

Undoubtedly, NFTs will gain more and more strength in the gaming industry, hand in hand with the metaverse that will drive the purchase of digital products and that will undoubtedly mark the future of the video game industry.

Applied technologies

NFTs are acquired through cryptocurrencies. While Ethereum is one of the most widely used for such transactions, WAX is used for purchases related to video games and virtual characters.

In this way, non-fungible tokens work through blockchain technology, the same technology used by cryptocurrencies, which operate through a decentralized network of computers, with blocks linked and reinforced through cryptography.

NFTs go hand in hand with a digital certificate of unalterable authenticity and the essential idea of buying them is that, their value will increase over time, and then they can be sold at a higher cost, since it is a unique asset.

A growing market

The NFTs industry encompassed a $237 million market in 2020, representing a 299% growth compared to 2019, according to a report by L’Atelier BNP Paribas and Nonfungible.com.

Transactions conducted in the NFT market have exceeded $200 million in early 2021 alone.

These figures indicate that the NFT market is booming and will continue to expand in the coming years.