What are NFTs?

Ok… So, in our website we say that the game we are building – “Realms of Eternity” will have NFTs incorporated in its economy. Now, I do believe that many of the players out there are not entirely or at all familiar with the NFTs, so I will try to explain the term here so that everyone is on the same page.

General explanation:

NFT is an abbreviation for Non-Fungible Token. Something is fungible when it can be replaced by something else of the same value. For example, if I have a $1 bill in my left hand and another $1 bill in my right hand, each of these have absolutely the same value as the other one – the dollar on the left can buy the same amount of things as the dollar bill on the right, and therefore none of them is more valuable than the other, thus they are “fungible”.  You wouldn’t care if you owned one of the dollar bills instead of the other. Another example of “fungible” items can be let’s say an image of Mona Lisa on your computer. If you copy/paste the image, you would have two pictures of Mona Lisa. Each of the files contain the same information, the same image from the same angle with the same resolution, made by the same photographer. Everything about those two pictures is the same, therefore their value is the same, so each of them can replace the other one. These images are fungible. You don’t care which of them will be your desktop wallpaper.

Non-fungible items are those that cannot be replaced by another item, simply because it doesn’t exist or if it does, it would have a lower value than the original item. To illustrate this, I will use the above example of the digital image of Mona Lisa, but instead of describing it as a “digital image” let’s focus on the physical painting. The physical painting of Mona Lisa is the only one in existence. There are no two paintings of Mona Lisa and so, the physical picture is unique, therefore it cannot be replaced by another image of Mona Lisa. Why? Because there are no more in existence. Since there are no other physical pictures of Mona Lisa, the one that exists is extremely valuable. Actually, the physical picture of Mona Lisa is valued at somewhere around 800-900 million $. A digital copy of the image and all of its duplicates can cost 1$ each or even be given for free to download from the internet. If an artist, not yet recognized by the art community/world, paints a physical picture of Mona Lisa that looks absolutely the same as the original, the original would still cost more than the newly-made painting, because the original one was made by Leonardo da Vinci and the other one was made by “the faceless nobody” (as rude as it may sound). So in this case, the value of the original will come not only from the fact that it is the only one in existence, but also from the sentimental value of “who made it?”. Therefore, the physical picture of Mona Lisa can be called a non-fungible item (NFT).

Another example of NFT would be the lottery tickets. If there are two lottery tickets – ticket A and ticket B, and we know that ticket A has the winning combination of numbers, while ticket B will earn you nothing, then those two tickets are Non-Fungible with one another. Why? Because the value of ticket A is different from the value of ticket B and therefore you would like to have one of them and not the other. If we add ticket C to our explanation, and this ticket will also earn you nothing, just like ticket B, then A and B are non-fungible, but B and C are fungible.

NFTs in video games:

It is common that free-to-play video games offer microtransactions, where the player would spend 5-20$ to buy a skin for his/her character and alternate its look. The skins in these video games are fungible, because if you play with character A and buy orange skin, a player on the opposite side of the globe playing with the same character can also buy the same orange skin, and then the next player can do the same thing, and then the next, and the next. Each of those skins are as valuable as the digital image of Mona Lisa (because there are infinite numbers of them). Now imagine if you could own a skin inside the game, that is as valuable as the physical picture of Mona Lisa. Imagine if you own something in the game that is so expensive! Beautiful, isn’t it?!

This is what Realms of Eternity is being developed to offer – on one hand you get to compose a strategy with your team on how to crack open the skulls of the opposing team, and on the other hand, you will be gathering, buying and selling NFTs.

The nature of NFTs gives two main functionalities – scarcity and true ownership.

Regarding the scarcity: When a skin in the game is a NFT it means that there are very limited numbers of this skin. Let’s say, there is only one skin in the entire game, so this means that only one player can have it. Or there might be 100 copies of this skin, but still the number of copies will be limited to a specific number rather than being infinitely multiplied. This means that only 100 players can have the specific skin. Everyone else will not have it.

Regarding the true ownership: In the classical scenario, where the players buy skins from the company that developed the game, they do not actually “buy the skin”, but rather the privilege to use the skin. After the skin is bought, the company still owns it, you just get to take advantage of it. NFTs give you true ownership. This means that when you buy a NFT skin, you really buy it. You become the actual, legal owner of the skin and can do whatever you want with it, including sell it to another player for a price that you choose.

Some of the main features of the NFTs are the following:

  • Decentralization – If the in-game economy is driven by NFTs this means that the in-game economy is not dictated by the company that owns the game, so the in-game items cannot be made more or less expensive artificially. NFTs make the in-game economy be driven solely by the players, simply because NFTs use blockchain technology (which is a topic for another time). The NFTs in the game are as expensive/valuable as the players choose.
  • True ownership – it was just explained above.
  • Provable Provenance – The history of an item’s ownership is recorded in the blockchain. A single NFT item can gain value, because of its previous owner, which can be checked easily. (If you give me a robe I would probably not care much for it and pay little to get it. But if you give me the robe that Ceaser used to wear (which has provable provenance), I will probably give you a lot of money for it.)
  • Provable scarcity – Because the NFTs use Blockchain, it is very easy for everyone in this blockchain to see how limited the item’s numbers are, and so prove that the thing you own is really one of a kind.
  • Permanence – If a NFT is owned by a player, it can exist forever. This means that the company that made the NFT skin cannot choose to remove it and give you something else in exchange. It is practically impossible.

What can be NFT in games?

Everything! In video games practically everything can be a NFT for as long as this “thing” has a unique value.

With this in mind, character skins are not the only thing that can be NFT. Voice Pack and special effects for spells can also be NFTs. A very rare item in the game like a sword or a piece of armour can be NFT. A potion or a recipe for a profession can be a NFT.

With the development of Realms of Eternity we are trying to make the NFTs accessible to everyone, not just the hard-core players. Additionally, the NFTs can be obtained not only through a purchase, but also through playing. This means that if you choose to sell your NFTs you will earn money and therefore Realms of Eternity is jumping from “Free-to-Play” to “Play-to-Earn”.

Ars longa, Vita brevis.

Post your comment