The harsh criticism of NFTs in gaming is unfair – they are more than micro-transactions

NFTs allow digital objects to be transformed into unique items. The trend is reaching gaming and is facing a lot of headwinds. However, MeinMMO author Maik Schneider sees the development positively and recognizes great potential in the technology behind the NFTs: blockchain.

NFTs (Non-Fungible Tokens) have caused quite a stir in the gaming community. With this technique, unique items can be created from digital objects such as images, lines of code or even goods in a game. This prospect does not go down well with many players.

There is criticism about the environmental aspect because the creation of NFTs consumes a lot of electricity. The close connection with cryptocurrencies also means that NFTs are viewed purely as an investment for the rich and gamblers who enjoy speculation.

Many players fear that the progressive monetization will mutate their favorite hobby into a kind of sideline where everything revolves around profits and the most valuable NFTs.

Overall, I think the currently very harsh criticism of the new technology is exaggerated. Because NFTs are much more than just speculative objects with a prospect of quick profit. They are gaming’s entry into blockchain technology.

Now I come out as a fan of NFTs and blockchain solutions in gaming. NFTs and blockchain have the potential to make gaming and the internet safer for all of us.

Added value of the blockchain: It’s about security

Let’s start with some background on the technology behind NFTs.

It’s about giving digital objects a comprehensible signature that makes the object unique. These can be images or videos, but also purchasable cosmetics in video games, for example.

It’s not just about making a very specific object completely unique. There can also be many copies of the one object, which are then all NFTs. Or only the original is an NFT and it is allowed to make copies of it.

The traceable signature is important. This allows the digital object to be assigned to an unequivocal owner. Blockchain technology is used for this.

With this special type of data storage, a hitherto unattainable level of security against manipulation on the Internet can be achieved.

Roughly speaking, the blocks of a blockchain check each other for errors and a large chain of data is created that builds on one another.

If a link in the chain is defective, the technology recognizes the error and does not allow the new link. All data must match.

Blockchains are generally organized in a decentralized manner. The data is not only on a server, but every authorized participant can download and view the blockchain or parts of it.

So if someone wants to manipulate the system, several blocks have to be changed at the same time. However, since the blocks are also located on countless computers and networks, these blocks would also have to be changed.

These simple principles – mutual checking of the chain and decentralized storage – make the blockchain so innovative. The high tamper resistance is the most advanced aspect of the technology.

In times when hackers can even gain access to our toaster, blockchains have the potential to prevent such digital attacks. The old systems are reaching their limits here.

Blockchain technology became generally known through cryptocurrencies. The system is so secure that entire currencies are based on it. The two largest are “Bitcoin” and “Ether”. The blockchain acts as a kind of central bank of this currency.

And it is precisely this high level of security that makes blockchain technologies such as NFTs so valuable for gaming.

Double speculation leads to understandable distrust

NFTs have been criticized for their proximity to highly speculative cryptocurrencies. Many NFT transactions are currently processed via the Ethereum blockchain, which also runs the cryptocurrency “Ether”.

This has a double speculative character:

• The NFT itself can increase or decrease in value
• The ether tokens that you get with a sale can also go up or down in value

Criticism of this construction is entirely justified. Who wants to have a highly speculative element in their game? This attracts investors who spend funds to profit from the system.

I’ve read a lot of comments from NFT articles on MeinMMO and this close connection between cryptocurrencies is what worries readers. It’s about how your gaming consumption could change – in a negative way.

BavEagle writes on MeinMMO: “Soon gaming will no longer be a leisure hobby, but a part-time job including market analyzes and an hourly check of the stock market price of NFT items”.

QWLU is also worried about what happens when there are more monetary values ​​in a game: “Today you already see AFK bots that only join and level up to farm skins and the like. What will that look like if the stuff even has a bit of value…?”.

And I agree with our readers. Games and systems are currently being developed, with a close intertwining of NFTs and cryptocurrencies. In such games, that is exactly what would happen: risk-taking speculators influence the economy of a game.

But NFTs are so much more than speculative microtransactions and the financial basis for large bot farms.

However, if you separate the thoughts behind NFTs and blockchain from the volatile cryptocurrencies, you have an innovative storage technology that could bring more security and individualism to gaming.

Blockchains and NFTs can do so much more

Blockchain technology has been around for a few years and more and more companies are relying on this storage format – without any cryptocurrencies in tow.

For example, the technology company IBM offers its own blockchain solutions that companies can use to make their accounting more secure and efficient (via IBM.com). It’s not about digging for the next token and making a quick buck.

It’s about safety, transparency and efficiency. Of course, IBM wants to make money from it. But this is not speculation, but a modern offer of a secure and manipulation-free data organization.

Companies build and organize their own blockchain, which then store and clearly display supply chains, for example. Depending on their needs, users can view a specific part of the blockchain.

For example, as consumers, we get information about the production facilities and the route that a good has taken. The key to access is an NFT that we get with the product.

Such blockchains are also not created according to the “proof of work” principle, which drives up the power consumption of the currently largest blockchains (token mining).

These secure systems can be transferred to many applications on the Internet. Then, as blockchain technology becomes more standardized over time, “cross-chain” applications, in which data from one blockchain interacts with another, are more likely to emerge.

However, the real breakthrough of the technology has not yet been achieved. NFTs are the vehicle that could bring about this breakthrough in gaming and beyond.

History repeats itself – comparison to the Internet

Payment flows usually seek the path of greatest profit, and if blockchains also bring financial advantages apart from cryptocurrencies, then it is more worthwhile to rely on the technology.

The current speculative excesses are attracting more attention – across almost all sectors. Entrepreneurs are dealing with blockchain technology and, in addition to fast NFT money, are also discovering the security advantages.

It was very similar at the start of the big internet hype. Companies pumped massive investments into the new market, built server capacities that nobody needed and created the so-called “dotcom bubble”.

The price bubble burst, many values ​​were lost. In Germany, the bitter loss of many private investors through purchases of the “T-Share” was particularly memorable. This “people’s share” reached a high of just over €100 and fell to just under €8.

But the server capacities created by the “dotcom bubble” were still there and made free service offers on the Internet such as MeinMMO possible in the first place. Before that, you actually had to pay for the traffic that visitors brought to a website.

The blockchain is at a similar point with NFTs. The limits of the markets are explored, the possibilities of the technology are tested. New blockchains emerge and disappear, others prevail, possibly even work together.

Whether a crypto bubble bursts or not – knowledge of blockchain technology has spread, and the advantages over old systems in terms of security, efficiency and adaptability are convincing.

Conclusion: Profit is important for new technologies – but so is revaluation

I think the harsh criticism of the NFTs is unfair. The technology is not to blame for exaggerated speculation, it is the people behind it.

There are already countless games that are financed via pay-2-win mechanisms – keyword “freemium”. Few affluent customers pump big bucks into a game that many others enjoy for free – but with less success, or at least with less sparkle.

There are already games in which “Play-2-Earn” plays a major role, i.e. earning money with grinds. In poorer countries, whole families are supplied with such systems.

That’s why I think criticism is important. Your opinions have given pay-2-win mechanics a bad name. Your opinions point the way to the future for developers.

However, it is also important to be open to new technologies.

The Java vulnerability “Log4j” has shown once again how vulnerable our current systems are and that it is time to find new security solutions.

Hackers can use this vulnerability to execute defective program codes – and sometimes it’s child’s play. For some applications, just a message in a chat is enough to run the code.

Spreading blockchain technology would be a big step in the right direction, and NFTs help bring the technology to the public and fund implementation.

Although blockchains were also affected by the vulnerability due to Java-based tools, the chain cannot simply be completely manipulated through access.

Therefore: Remain opinionated, but also fair. NFTs and blockchain are about more than just profit greed and micro-transactions. It is also about a safe and secure Internet.

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