NFT Gaming: The Play-to-Earn Model

By Euvouria LLC

In the last decade, cryptocurrency (crypto) has become a worldwide phenomenon, garnering the attention of those interested in technology—and that have money to spend. Although many people who aren’t keenly aware of crypto are often led to believe that it has only been around for a few years, it has been around since the mid-90s, with some people stating that the concepts for crypto stem back as far as the late 80s.
Without getting too much into the history of crypto, the first iteration of crypto was something called Digicash; however, it never really took off. After many attempts (albeit with nearly all of them failing throughout the 90s) Satoshi Nakamoto developed the crypto that we all know (and love) today, Bitcoin.
Part of the success of Bitcoin, and the reason that it was able to be developed was because of a technology called blockchain. Blockchain can most simply be thought of as a hyper-secure online ledger system that can store digital data. An explanation as to how blockchain works can be found in Appendix A. It is highly suggested that this explanation is reviewed before diving into further chapters of this document to ensure a full understanding of the technology and functions discussed.
Nevertheless, blockchain is the technology that has laid the foundation for crypto and allowed Bitcoin to become the global phenomenon that it is today. Not only this, but the growth of blockchain technology has allowed for new cryptos to be developed, and for other decentralized blockchain apps to be explored. That is, the fundamental functions of blockchain being a secure, decentralized platform have allowed various applications to be developed using blockchain as the secure ‘building blocks’, and for crypto to be used as the financial extension of any digital, decentralized application or software.
One such application of these decentralized apps (DApps) that has gained tremendous momentum in the last few years is video gaming. Traditionally, video games have been developed as standalone software, often either being played on handheld devices, consoles, or on computers via online hosting platforms. In the most basic form, this involves a large amount of coding, planning, and designing to make video games into what people know and play today.
However, with more growth and increasing understanding of the various applications of blockchain technologies, there has been tremendous interest in merging blockchain with traditional video games to make DApps known as NFT Games or Crypto-Games. Definitions of “NFTs”, “NFT Games” and “Crypto Games” will be given in subsequent chapters of this document, as well as in the “Terms and Glossary” at the beginning of this document.
Nevertheless, as many traditional video games have been merged with crypto and blockchain technologies, there has emerged an entirely new video game and income generation model, Play to Earn. This will be discussed in later chapters of this document. The key difference between NFT games and traditional video games is that (as the model would suggest) people can play NFT games to earn money. More specifically, they can earn cryptocurrencies while playing these games.
As the core focus of this document, the following chapters will delve into what exactly NFT and Crypto games are, how they function, the technology that allows them to function, the model this has given rise to, and nearly every other aspect of these games—including popular games that are playable today. To understand all this information, the following chapters will also discuss what NFTs are, how the market for NFTs work, and how people can make money not only with NFTs but playing NFT games.

• Language: English
• Publisher: Euvouria
• Release date: Jan 23, 2022
• ISBN: 9798406509159

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Contents

Chapter 1 Overview

Chapter 2 Technology powering NFT Games

An Introduction to Blockchain

Components of Blockchain Technology

History of Blockchain

Blockchain Applications

Understanding NFTs

History of NFTs

How NFTs work?

NFTs and Blockchains

NFTs and Cryptocurrency

Putting Blockchain, NFTs and Crypto together

Chapter 3

Revisiting NFTs – the Fundamentals

What are NFTs?

What can be an NFT?

How NFTs are transferred

Making Money with NFTs

NFTs in Gaming - Creating a new Model

Chapter 4 Understanding Play-to-Earn & NFT Games

What is the Play-to-Earn Model?

In-Game Assets

In-game Currency

Marketplaces

What are P2E Games?

The History of NFT Games and the P2E Model

The Developments and Growth of the P2E Gaming Model

How P2E Fuels the Future Success of NFT Gaming

The Impact of P2E

Chapter 5 NFT Gaming Insights

Preliminary Insights: How Big are NFT Games?

Video Game Mass Popularity

NFT Game Mass Popularity

The Impact of Video Games on NFT games

Key User Demographics – Who Plays these Games?

How do Players actaully earn Rewards?

Earning Tokens

Streaming

Buy and sell NFT Assets

Earn and sell NFT Assets

The Steps to turn In-game Assets into Money

The Use of Tokens and Crypto in NFT Games - What's the Difference?

Third-party vs. In-game Marketplaces

Scalability of NFT Games

Where will they go from here?

The Impact of NFT Games of Nation's Youth

Chapter 6 The top NFT Games Today

Largest NFT Games

By Revenue

By Usership

By Number of NFT Transactions

By Growth

By Earning Potential

The Most Popular Games - What makes them the best?

Chapter 7 Case Study

Axie Infinity

Introduction

Earning Potential

Beginner’s Guide

Gameplay, Earning Tokens and Making Money

Chapter 8 The Future of NFT Gaming

Creating Jobs ... or Not?

Are NFT Gaming Jobs Sustainable?

Advantages and Disadvantages

What Does a Future with NFT Gaming look like?

References

Appendices

Appendix A – Blockchain explanation

Table of Figures

Figure 1: How blockchain consensus works

Figure 2: Cryptopunks

Figure 3: Cryptokitties

Figure 4: Examples of NFT Marketplaces

Figure 5: Examples of video game assets

Figure 7: Nintendo, PlayStation and Xbox consoles

Figure 8: NFT Gaming demographics

Figure 9: AXIE Coin trade page

Figure 10: Axie Infinity marketplace

Figure 11: Tokens vs. coins

Figure 12: Marketplaces

Figure 13: Change in interest in NFT games

Figure 14: Largest NFT games, by revenue

Figure 15: Largest NFT games, by user

Figure 16: Largest NFT games, by transaction & transaction volume ($)

Figure 17: Largest NFT games, by growth

Figure 18: Largest NFT games, by earnings potential

Figure 19: Profitability of players in certain NFT games

Figure 21: Axie Infinity starter team homepage example

Figure 24: Setting up Axie

Figure 23: Axie marketplace

Figure 25: Axie classes

Figure 26: Class strengths and weaknesses

Figure 27: Axie Adventure mode

Figure 28: Pros and cons of NFT gaming jobs

Chapter

1

Overview

In the last decade, cryptocurrency (crypto) has become a worldwide phenomenon, garnering the attention of those interested in technology—and that have money to spend. Although many people who aren’t keenly aware of crypto are often led to believe that it has only been around for a few years, it has been around since the mid-90s, with some people stating that the concepts for crypto stem back as far as the late 80s.

Without getting too much into the history of crypto, the first iteration of crypto was something called Digicash; however, it never really took off. After many attempts (albeit with nearly all of them failing throughout the 90s) Satoshi Nakamoto developed the crypto that we all know (and love) today, Bitcoin.

Part of the success of Bitcoin, and the reason that it was able to be developed was because of a technology called blockchain. Blockchain can most simply be thought of as a hyper-secure online ledger system that can store digital data. An explanation as to how blockchain works can be found in Appendix A. It is highly suggested that this explanation is reviews before diving into further chapters of this document to ensure a full understanding of the technology and functions discussed.

Nevertheless, blockchain is the technology that has laid the foundation for crypto and allowed Bitcoin to become the global phenomenon that it is today. Not only this, but the growth of blockchain technology has allows for new cryptocurrencies to be developed, and for other decentralized blockchain applications to be explored. That is, the fundamental functions of blockchain being a secure, decentralized platform have allowed various applications to be developed using blockchain as the secure ‘building blocks’, and for crypto to be used as the financial extension of any digital, decentralized application or software.

One such application of these decentralized applications (DApps) that has gained tremendous momentum in the last few years is video gaming. Traditionally, video games have been developed as a standalone software, often either being played handheld devices, consoles, or on computers via online hosting platforms. In the most basic form, this involves a large amount of coding, planning, and designing to make video games into what people know and play today.

However, with more growth and increasing understanding into the various applications of blockchain technologies, there has been tremendous interest in merging blockchain with traditional video games to make DApps known as NFT Games or Crypto Games. Definitions of NFTs, NFT Games and Crypto Games will be given in subsequent chapters of this document, as well as in the Terms and Glossary at the beginning of this document.

Nevertheless, as many traditional video games have been merged with crypto and blockchain technologies, there has emerged an entirely new video game and income generation model, Play to Earn. This will be discussed in later chapters of this document. The key different between NFT games and traditional video games is that (as the model would suggest) people can play NFT games to earn money. More specifically, they can earn cryptocurrencies while playing these games.

As the core focus of this document, the following chapters will delve into what exactly NFT and Crypto games are, how they function, the technology that allows them to function, the model this has given rise to, and nearly every other aspect of these games—including popular games that are playable today. To understand all this information, the following chapters will also discuss what NFTs are, how the market for NFTs work, and how people can make money not only with NFTs but playing NFT games.

In any case, this document serves to provide insight into the vast and technical world of NFT gaming and seeks to provide a simple understanding as to what NFT Games are, and how people can cash in on the Play to Earn model themselves.

Chapter

2

Technology powering

NFT Games

To effectively understand what NFT Games are, and how they generate people money, this chapter will briefly discuss the fundamental technologies that support NFT gaming. More specifically, this chapter will provide an understanding—like Appendix A—as to what blockchain is, and how it works. Additionally, this chapter will provide an introduction and brief history to NFTs, and how they work today. The last sections of this chapter will discuss how NFTs, blockchain, and crypto all come together to make NFT Gaming, and the play-to-earn model possible.

An Introduction to Blockchain

As alluded to previously, blockchain is the one of the core technologies that has allowed both crypto and NFTs function. Appendix A provides an overview as to how blockchain functions with respect to crypto. This illustration explains that when a new transaction (say, for example, a purchase using Bitcoin) occurs, it is recorded on that currency’s blockchain server. Then, the server network confirms this transaction to be a legitimate transaction and sorts the transaction using a series of complex hash codes into a block. Each block contains several unique transactions that have their own hash number identification; and each block is given a unique root hash to identify that individual block. Then, the blocks are sorted into a chain for security purposes, and to organize transactions.

One piece of information not discussed in Appendix A is that along this chain, each block’s root hash is based on the hash of the blocks before it. This means that if there is a change to even a single transaction within a block—such as via a scam or hack—then the entire chain from that point on is altered; and these alterations can be seen by the server hosts. This is another key function of blockchain