Virtual items have had perceived value pretty much ever since gaming went online and gamers could see what virtual "stuff" they had compared with other players.
With the emergence of blockchain technology, virtual items like rare game assets have had their value proposition drastically increased when they are created on the blockchain as non-fungible tokens (aka NFTs).
Core Properties of Blockchain
Properties bestowed by blockchain will revolutionize the monetization and promotion potential of game assets.
What are these properties, and how can they benefit game items, gamers, and game developers?
Transparency; Immutability; Security; and Decentralization.
That might sound like a game of buzzword bingo, but each of these core aspects of blockchain benefits game items—and the gamers who own them—in unique ways.
Scarcity has always been a function of calculating the value of anything; it's one of the fundamental principles of supply and demand.
With blockchain, because assets are created on a distributed public database, the supply (and ownership) can always be openly and transparently tracked.
If rarity is claimed, it can easily be investigated and confirmed with blockchain explorers like EnjinX.
History and provenance have likewise long been a criteria in determining what an item is worth, and blockchain adds this to the digital world.
The Ethereum blockchain cannot be tampered with, as its records have to be confirmed by the vast decentralized network of independent computers.
Thus, each tokenized asset has a trackable history and can gain value from factors like prominent owners, use in significant gaming events, and past purchase prices.
It could be argued that because there are no single points of failure, Ethereum is the safest database in the world, covering the storage, transfer, and management of virtual assets.
If one game server goes down, you could lose anything, but that's not the case when one computer on the blockchain drops out.
In the traditional system, your gaming assets are stored on a centralized server owned by the game company.
They provide you access to your assets, rather than real ownership—and this access can be lost or revoked at any time for a variety of reasons.
With blockchain, you own assets directly on your personal blockchain address. As long as you keep the private keys required to transact from this address safe, nobody can take them away.
The best way to do this is by using a cryptocurrency wallet to act as an interface with your blockchain address. The Enjin Wallet, for example, is optimized for blockchain gaming assets.
The Benefits of Ethereum
All of the above properties add value, but specific technological features of Ethereum help to provide even more value in monetization potential.
Game developers can use the smart contracts of cryptocurrencies like Enjin Coin (ENJ) and token standards like ERC-1155 (optimized for the creation of both fungible and non-fungible tokens) to change the way items generate revenue. These include:
- Trading Fees: Developers can benefit from automatically receiving a portion of every asset sale/trade; for example, getting 5 ENJ when Player A sells to Player B, 5 ENJ when Player B sells it to Player C, and so forth.
- Melt Fees: Developers can also benefit from automatically receiving a percentage of the cryptocurrency retrieved when an asset is melted (destroyed). For example, if a player melts an item backed by 50 ENJ, and the melt fee is 50%, the developer will receive 25 ENJ.
- Asset Rentals: Going away on holiday? Stopped playing a specific game? Put your assets up for rent and have them automatically returned to you when the rental period is finished.
Transparency. Immutability. Security. Decentralization.
Four words that could well change the world of gaming forever and give gaming assets unimagined potential for monetization and promotional use.
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