NFTs have boomed in popularity across the past few years, particularly in 2021. These unique tokens are frequently used to trade art and other objects of value, and their impact could change our approach to many aspects of life online. One area that they have transformed in their own way is that of gaming. With Axie Infinity and Cryptokitties leading the way in this sector, how can NFT games affect the world of gaming and our activities online as a whole?
How Do Crypto Games Work?
Many games allow you to put real money into them for some form of advantage in the game. This can be done in several different ways. Some games allow you to put real currency in, which is then transformed into the in-game currency and can be used as you see fit. This could be to purchase skins and customization options to transform avatars. They certainly look impressive, and they can add a lot of prestige to a character, but they don’t in any way add function to a character. They are purely cosmetic.
The other option we can frequently see in “freemium” games, so-called because you can in theory play the game entirely for free. However, to get the most out of the game and the best equipment, you need to be prepared to pay a little extra. Those who do decide to indulge in the extra cost will be upgraded to VIP status and will gain more benefits to help them play the game.
So, how does this tie into crypto? It is quite simple – instead of using a fiat currency to fund your game, you instead use crypto. In-game assets that you choose to buy are also crypto but are tokenized as NFTs so they can be accurately tracked. Though this might appear to be a very different system to those that use fiat and custom currencies, the basis is the same.
How Do Games like Axie Infinity and Crypto Kitties Work?
Axie Infinity and Crypto Kitties are two of the most popular NFT games by far. They are Play-to-Earn games, which means that you spend crypto to get NFTs that you can then improve and trade as you see fit, allowing you to essentially improve your hand and make it more valuable.
In Axie Infinity, you do this with Axies – Pokémon-like creatures – and Crypto Kitties lets you do so with cats. No two tokens in either of these games are the same, so you can breed and sell to get more unique ones as you see fit. These games also don’t take a cut of the transaction when trading, so you can keep the profits yourself.
When selling these NFTs back to the community or to another player, you will then get crypto back that will go to your wallet. This can be reinvested in the game, or used as a wider part of the metaverse crypto if you wish to take it and use it elsewhere. It is a flexible way to play your favorite games that could result in a fun way for you to trade both NFTs and crypto.
Will These Games Be a Success in the Future?
These games are slowly rising in popularity, and they could form a key part of the gaming landscape just like mobile and console gaming is two other popular spheres. However, there are some things that will impact the market as a whole.
The first is the fact that these games are subject to the shifts of their respective cryptocurrencies. Both Axie Infinity and Crypto Kitties use Ethereum, with transactions taking place in ether or ETH and recorded on the Ethereum blockchain. The value of the NFT will not change while you hold it, but if you want to sell it for fiat currency, you are going to see fluctuations. Therefore, it is vital that players are aware of the Ethereum market when trading these games. Others will use other cryptocurrencies, so if you want to try trading NFTs through these streams, you need to learn about the crypto being used at the heart of them.
Secondly, there is a question of supply and demand. These are, ultimately, like digital trading cards. There are some that are rarer than others, and these will obviously be more in demand than the more common ones. At the same time, they will only be valuable for as long as people determine that they have value. If interest fades and you are not able to find a buyer when trying to sell, you are going to be stuck. This also works at the other end – as demand goes up, so might the entry price. This could make it more difficult for people to get off the starting blocks and start collecting NFTs.
This is a very interesting way to make use of NFTs, and it makes them a lot more accessible than some of the auctions and other buying methods we are typically seeing. It would be fantastic to see NFT games such as Axie Infinity and Cryptocurrencies continue to grow in popularity if they can teach the fundamentals of NFT trading in a safe manner.
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