NFT Advantages & Risks in blockchain Gaming

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What are Non-Fungible Tokens?

Non-Fungible Tokens are cryptographic assets on the Blockchain that are distinguished from each other with unique identification codes and metadata. Unlike all the other cryptocurrencies like Ether (ETH), Bitcoin (BTC), and Monero (MXR), Non-Fungible Tokens cannot be exchanged or traded for its equivalent.

Non-Fungible Tokens can be any type of media like art, videos, games, music, etc. The term Non-Fungible refers to a unique and irreplaceable object.

For example: if you had 100 Bitcoins, you could exchange them for other Bitcoins and the value that you have in hand will be the same. However, all Non-Fungible tokens are unique, and when you exchange one for another, the value will not be the same.

In the above example, Bitcoins are Fungible Tokens, which means, they are tradable for each other and have a constant value.

In simple terms:

Have you seen Pokemon cards?

There were many basic Pokemon cards and there were some special cards too. Now the special card is much more valuable than a basic card and owning a special card used to be a big thing. The special card used to come with a heavy price tag and could also be physically stolen too.. 

In this tech age, everything has gone digital. But if there was a special digital card, it could be easily duplicated using the copy and paste feature. Now how can the uniqueness of the special card be preserved in this digital age? 

For this, Non-Fungible Tokens can be used.

The card can be transformed into a Non-Fungible Token, and as a result the card can be stopped from being copied, as the original card will be provably unique due to being recorded on the Blockchain. Now, it is possible to have special cards and art pieces thanks to the Non-Fungible Tokens and Blockchain.

Characteristics of Non-Fungible Tokens

Here are the unique qualities of Non-Fungible Tokens that differentiate them from other Tokens:

  • Rare: Although the developers of Non-Fungible Tokens can create as many Tokens as they want, they often keep them limited so that they can be scarce to increase their value. 
  • Indivisible: Although this is not the case with all Non-Fungible Tokens, they are often indivisible. You cannot break the Non-Fungible Tokens in half, and therefore you will have to buy the full Token.  
  • Unique: This is the most highlighted feature of Non-Fungible Tokens. They can record their uniqueness on their permanent information tab. This tab is like a certificate of authentication.  

NFT Advantages in Gaming for Publishers

A Game Publisher invests a lot of money in the game that he then recovers and profits via in-game purchases, in-game advertisements, etc. The inclusion of NFTs in the game can increase the profits for the publishers and it can also provide various other advantages. Let’s have a look at them:

Earning from Transaction Fees

When an NFT is transferred, the publisher can collect a transaction fee from the seller or directly cut it while the transaction is processed from their game. This way, the publisher will earn every time the NFT changes hands. In some instances, NFTs have been sold for millions, and this will bring a great amount of transaction fee for the publishers. 

Extra App Store and Play Store Earnings

When an app or game gets a particular number of downloads on the app stores, the publisher receives a share of the download cost. The share that the publisher earns depends on the number of downloads, and they will earn more if they get more downloads. NFT can increase the popularity of their game and can attract more users to play their game with the objective to buy or sell NFTs based on the game. 

For Takeovers and Mergers

If a new product is launched on the market, that disrupts the reputation or the popularity of a big company/enterprise, they often tend to buy the new product and merge the product in their catalog to remove the competition and to earn from the same. This can also happen to small startups and small businesses that launch their own NFT game. 

Leveling up the current Game:

The game will get boring if it does not have anything new to offer the user every now and then. The publishers spend huge budgets on their R&D Departments to find new and interesting additions for their game. NFT brings a golden opportunity to the publishers that they can use to scale up their existing games. The addition of an NFT in the game will attract new users to the game, and will also keep the existing users engaged and entertained. 

Attract Venture Capital:

Investors invest in products that show promising results and are sure to be a hit in the future. Smart people do acknowledge the possibilities and the profits that Blockchain and NFTs can bring, and thus having an NFT game can benefit the publishers in attracting venture capital. 

NFT Advantages in Gaming for Gamers


Here are the advantages that NFT brings for the gamers:

Asset Ownership

What do you get in return for a character that is on the highest level in the game except fun? Nothing right!

But this will change with NFTs. With NFTs the gamers will get the ownership of their character as well as of all the assets like rare items or even small items that they can sell to earn money. Collectibles and legendary items can earn great money for the users, and now the gamers can pursue collecting and selling NFTs as a career. 

All the NFT games can now serve as a money-earning platform for the users.

Increase in Security:

As NFTs are backed by Blockchains, it offers a high level of security. The players can stay assured that their assets and money in the game are safe and they do not have to worry about anything. NFTs cannot be replicated and therefore the players can also stay assured that their assets will not be copied or stolen. 

Transparency and Provable Scarcity:

The concept of NFTs is based on the scarcity and rarity of the digital asset. Blockchain technology helps in maintaining transparency in the transactions related to the NFTs. It also states the owner of the NFT and proves that the asset is unique. The uniqueness of the asset attracts high prices for the same. 

Risks Associated with NFT Gaming


NFTs are indeed alluring and have a promising future ahead, however, as the technology is in its early stages and is relatively new to the users, there are certain risks associated with NFTs. Not knowing about these risks or ignoring them can be really fatal for the users. Let’s have a look at the risks associated with the NFTs to be generally aware and safe from them.

You might get scammed:

New users have zero or very low knowledge about NFT and thus they are at the risk of getting scammed. This can be the case in mobile games if the users are buying the NFTs from outside the game. 

There may be fake marketplaces, fake sellers, or unverified sellers, that can scam the users by selling fake NFTs. The new users might not know how to verify if the NFT is a real one or a fake, and in the lure of buying the NFT at a lesser rate, they might get scammed.

Environmental Risk:

Cryptocurrencies are dangerous for the environment. The computers that generate Blockchain data run constantly, and for that they consume a very high capacity.

In fact, it is more environmentally taxing to mine cryptocurrency than mining copper, gold, and platinum. It is also estimated that between January of 2016 and June of 2018, crypto-mining alone contributed between 3 million to 15 million tons of CO2 emissions to our current environmental situation.

Environmentalists around the world slam other industries doing the same, and the Blockchain industry will soon face the same backlash.

The risk of buying phony NFTs:

NFT as an investment is risky as there are many phony NFTs on the internet along with the valuable ones. Just like any other investment, trained eyes are required to find the right ones from the heap of phony NFTs.

This can be hard for the new users, as they have just entered the market, and when they hear about the large sum that they can get with NFTs, they may get blindsided with those figures, and they might invest in the wrong NFTs.

Wash Trading:

NFT Wash Trading is a type of online fraud that is used to artificially pump the price of NFTs in the marketplace. The scammers will create various fake accounts to increase the demand of a certain NFT, which will in turn increase the price of that NFT.

This way, they will trick the buyers to believe that this NFT is valuable and they should buy it. If they invest in such NFTs, they will indeed lose money.

Wrapping Up

NFTs are an emerging technology with the potential of revolutionizing the gaming sector completely. It has already started changing how people used to earn from games, and it showcases a huge potential.

However, as NFTs are still in their early stages, there are certain risks involved, and so the investors should deal with it carefully and responsibly. Through discrete up & downs, NFTs in the gaming sector brings various advantages for publishers and players, and it is going to increase the fun of the gaming experience in many ways.


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