News > A Simplified Introduction to Non-Fungible Tokens
Considering the rate at which blockchain and crypto is evolving, it is not surprising that new concepts of tokenisation are beginning to flourish. Take the 2017 smash hit, CryptoKitties, for example. Some of these unique items, called non-fungible tokens (NFT’s), were sold for hundreds of thousands of dollars!
As NFTs will play a critical role in the IGG token economy and with the eventual conversion of GFT into an NFT, we thought it would be pertinent to provide an introduction to this exciting application of blockchain technology.
An NFT represents an asset in the form of a token that can be used to verify proof of ownership and authenticity of that specific asset. These items that are made up of unique information therefore cannot be replaced by another item — even though they may look similar on first glance.
CryptoKitties are an example of NFT’s on the Ethereum blockchain.
The key difference between an NFT and a regular cryptocurrency token is ‘fungibility’. Fungibility is an important aspect to any currency of value, as it provides legitimacy of a crypto’s interchangeability between units. Consider your IG Gold (IGG) tokens, or TRX for that matter, there is no distinction between the IGG “Person A” holds and the IGG “Person B” holds — considering they have the same amount.
As stated, NFTs on the other hand, are unique and therefore not interchangeable. In this instance, artwork is a great example: each will have its own characteristics that differentiate it from the next. Again, NFT’s, unlike fungible tokens are not divisible, so must be sold entirely.
That said, fungible and non-fungible tokens require utility, or in the case of NFTs, a purpose to set the demand otherwise there will be no market.
Creating NFT’s can be expensive and complicated. What’s more, determining certification standards may lead to fragmentation, which in turn creates inconsistency for determining value. Now, we are seeing more and more platforms create a technological layer that unifies and standardises these NFTs.
Due to limited supply, which therefore creates scarcity, the uniqueness of an NFT determines its in-game value. Due to the nature of blockchain, namely its immutability, NFT items cannot be changed, nor can they be stolen or duplicated easily. So, in a decentralised marketplace, gamers are able to trade unique items in the same manner that they would do so with crypto on any given exchange, leading to dynamic in-game trading that is secured by distributed ledger technology, or blockchain.
The fact is that many are willing to spend their money on virtual items in the same manner that they would for any physical item.
As the trend of video game industry’s shift to free-to-play continues, more and more game developers are beginning to generate additional revenue from the sale of in-game items, such as in-game outfits, skins and weapons. According to data and research from Statista, spending on in-game items could even reach $32 bn in 2020!
There are four key motivators to in-game purchases:
Unobstructed play: playing games without the distractions of timers, repetition, protecting achievements, completion, and continuing gameplay.
Social interaction: self-expression, or personalisation, and interaction with other players; transferring gifts or access to special events.
Competition: showcasing achievements to other players.
Economic rationale: motivation for players to purchase a virtual item — costs, special offers, or simply supporting a game. A good example here is Dota 2’s battle passes; the funds generated from these are allocated to Dota’s main event, The International.
When the time is appropriate, we will carry out a token swap that will convert holders’ GFT to a NFT, which will provide unique characteristics and attributes, as well as the additional benefits outlined for holding the GFT. As this article has outlined, the value of these NFT’s will be determined by their scarcity and demand. For now, we will keep this brief, however, we look forward to sharing further information about the NFT perspective of the GFT and wider role of these type of assets within the IGGalaxy.
To keep up to date with developments, please follow us on our various social media channels:
Earlier on, we posted a tweet for a Bitcoin halving competition. Though many of you in the community have been here long enough to know exactly what this is, we recognise there are many of you that don’t. Everyone loves a competition, so we thought we’d take this opportunity to bring those of you that don’t know up to speed so you can take part!
May 8, 2020
The blockchain industry continues to grow, with more and more of us beginning to recognise the profound impact the technology will have. Whilst blockchain technology is still relatively in its primitive stages, it will soon to be an integral extension that will underpin our how we interact with one another. And though we are witnessing blockchain strengthen its foothold in the mainstream arena, we are only really just scratching the surface with what is possible with the technology; the best is still truly yet to come.
February 17, 2020
In case you missed it, TRON will be distributing 50m TRX to TRON Super Representatives (SR). That is currently worth around $982,500! From our understanding, this will be proportional to the blocks produced for the network since the Genesis Block, the block first produced independent of the Ethereum blockchain.
November 14, 2019
Copyright © 2020 Intergalactic Gaming
All rights reserved