Who needs a job if you can just play games or create art and make a living.
Axie Infinity players are now making around $30 million a week.
That’s right, over 4 million dollars a day is going to the pockets of amateur players playing this blockchain based game (check out the recent stats here)!
But gamers are not the only ones taking advantage of the NFT revolution.
Artists are also having the time of their life.
The value of the digital art sold on the Art Blocks platform rached over $200 million this week alone! This translates to over $5 billion a year! In 2020 the total art market sales were close to $50 billion. One, new digital art platforms doing 1/10 of the volume of the whole art market is just something incredible.
What is more, this is just the beginning and these numbers will pale in comparison to what’s coming in the next few years.
How is this possible and what are the ways to take advantage of this new trend even if you’re not a gamer or an artist?
Let me tell you!
Right now, as you read these words, the reality for artists and gamers is rapidly changing. The rise of blockchain-based Non Fungible Tokens (NFTs) is especially touching the lives of these two groups but its implications will have global reach and consequences. The implementation of NFTs is vital because:
- It allows artists to get access and exposure to global markets and liquidity and protects their ownership rights
- Gamers can take ownership of their in-game characters and objects, making money while they play, even if they only do it for fun
Blockchain-fueled globalization of art and gaming is already a huge deal for many people living in third world countries. The Axie Infinity game that I’ve mentioned earlier is right now the main income source for thousands of people living in the Philippines and Venezuela.
OK, so what are these magical, world-changing NFTs?
According to Wikipedia, a non-fungible token (NFT) is a unit of data stored on a digital ledger, called a blockchain, that certifies a digital asset to be unique and therefore not interchangeable. NFTs can be used to represent items such as photos, videos, audio, domain names, event tickets, in-game items or even social networks handles. Basically NFTs represent unique objects, also these from the digital world. By implementing blockchain technology they facilitate seamless trade and allow for immutable record of ownership rights and history. Their most important features include:
- Programmability: being digital, NFTs are fully programmable which means their structure and features are only bounded by our imagination and computer code. This opens the doors for so much innovation.
- Tradeability: anyone in the world can trade NFTs on globally accessible markets. This is huge, both for artists and gamers.
- Interoperability: because all NFTs are based on the same coding standards they can be accessible on many different platforms and marketplaces. Anyone can buy and store them using any of the major cryptocurrency wallets.
- Scarcity/Immutability: the developers can hardcode any properties into NFTs, making sure that there will only be a certain number of an item or that it will have very specific properties. These hard coded features cannot be changed, thus the scarcity and all the properties of these digital items are set in stone and known for all market participants.
- Liquidity: anyone in the world can access NFT marketplaces. A kid in Africa can create a digital painting, upload it to a platform and get exposure to millions of potential buyers from around the world. Because NFTs allow for partial ownership, art galleries are already tokenizing expensive paintings and selling them, in parts, to multiple investors. You can now own a piece of Rembrandt or Da Vinci!
This liquidity aspect of NFTs is a huge deal for the world of art so it should not come as a surprise that the big players in this space are already using this technology.
The famous auction house Christie’s did their first NFT auction in March this year, it was a huge success and brough almost $70 million.
I can see the tokenization of physical art being an important innovation for all the art galleries in the world that suffered due to lockdowns. Struggling for money, they are now able to tokenize their exhibitions, sell parts of the art while keeping it inhouse and acting as a custody provider. This is a win-win, making all the involved parties happy.
Another interesting trend that you should be aware of is the development of virtual art galleries that display NFTs. These digital art galleries will be an interesting addition to the virtual worlds that are built as you read these words. There are already many of them in development (like Decentraland) and this trend will be also speeding up. NFTs are a big building block of these worlds and can be also used to represent land ownership. Yes, you can make money buying, selling and owning land in the digital world.
Probably the most important factor in regard to NFTs in art is the fact that now anyone can create a digital piece and put it in front of millions of pairs of eyes. This globalization of art will change the lives of millions of people (both, artists and investors). Some of the first NFT collections are already getting crazy valuations. At the time of writing, the famous CryptoPunks collection is worth almost a billion dollars!
This space is still very young and its growth is just mind-boggling. Here are some links I gathered for you, in case you want to research further:
https://www.cryptovoxels.com/ – Virtual art world
https://trade.theart.exchange/nft – Art trading platform
https://boredapeyachtclub.com/#/home – One of many digital NFT collections
https://www.cryptoslam.io/ – A platform that gathers together a lot of different NFT marketplaces
Blockchain implementation in the world of art will be a huge thing, but…
This is nothing in comparison to how big will the NFTs in gaming be.
Gaming has been steadily growing as an industry and in 2020 was valued at around $174 billion (the art market was around $50 billion at the same time).
Blockchain technology and NFTs are changing the whole revenue model in the gaming industry, allowing the regular players to participate in profits earlier only intended for the game developers. To understand how this is happening let’s quickly look at the evolution of the gaming industry revenue model. First we had to pay for the games to be able to play them. This model is called pay to play and we all know it pretty well. The next big step in the evolution of the gaming economy was the model called free to play, pioneered by Korean billionaire Kim Jung-ju. This model is still very popular today. Even though the games in this model are free to play, the gaming studios make tons of money on them. You can play the game for free but if you want access to some ‘cool’ equipment or upgrades, you actually have to pay to get them. These are usually fairly cheap but if you take under consideration the number of players who buy them we are talking about hundreds of millions of dollars. The game called Fortnite is a great example of a free-to-play game – the studio responsible for developing it, Epic Games made $2,4 billion in 2018 just by selling skins to their players. The issue with this model is that the players do not own the stuff they pay for. They can use it in the game but can’t sell it later. And this is where blockchain comes in, introducing the new step in the gaming economy evolution. Thanks to NFTs we are transitioning from a closed economy that only rewards gaming studios to an open market economy benefiting the players. If you’re a fan of computer games you should be getting excited because you will love this new economic model. It is called play to earn and it’s the biggest innovation that gaming has ever seen! Now you can actually own your gaming character and anything you get in the game. Equipment, weapons, digital parts and play cards are now yours. In this model you can actually sell and make money by trading on open NFT marketplaces. Now, when you spend hours playing a game and building your character there, you’re investing your time into something that has a real value. This is what thousands of people in the Philippines are doing right now playing Axie Infinity. They make a living playing the game and selling their built-up heroes to other people who do not have time to develop their characters.
Consider this, Axie Infinity, a simple game with a pretty limited world (no offence Axie, I love your game) allows it’s players to make $30 million a week and is valued at $4,5 billion. One simple game being such a wealth building tool… You can only imagine when the big studios understand the power of blockchain in gaming and join the race to build the first $100 billion game, this will be amazing for all the players around the world. As of today there are probably hundreds of NFT-based games being developed by smaller teams, and I am sure there will be many winners amongst them that will benefit the players the most. If you want to learn more about this trend, here’s an article that talks about it in more detail and a website dedicated to this new kind of games.
But what if you’re not an artist nor a gamer?
You can still benefit from the NFTs as an investor or speculator.
Ohh yes, one can make a lot of money investing in these NFTs.
Buying popular art collection NFTs, game tokens, legacy card decks or just the tokens of the NFT marketplaces are all great options. You can even invest in an NFT index funds!
When I first wrote about Axie Infinity in 2020 their token was worth less than 50 cents, now it sells for over $70, 150 times more. This means that if you’ve invested $1000 dollars a year ago, now it would be worth over $150,000!
This CryptoPunk was first sold in 2017 for $2,127, the last buyer paid for it $7,580,000 in march 2021. This is over 3,5 thousand times more…
The paradigm shift is unfolding in front of us. This is just the beginning, and it will be very interesting to see these digital worlds of art and gaming develop and interact. As the usage of virtual and augmented realities increase this will only speed up the process of implementation of digital economies and NFTs. We can all have great fun while participating in this process.
A word of caution here – blockchain and NFTs are highly speculative spaces that experience volatile cycles. Make sure to do your own research before committing any money to them and only invest what you can afford to lose. It might be best just to stick to playing NFT-based games at the beginning as it carries no risk. The only thing you can lose in this case is your time.
If you are seriously considering investing or speculating in this space I encourage you to join a group that specialises in this kind of work. You can also get the best insights and news from the world of blockchain in our free Telegram group, link just below this article.
Thanks for reading!
Written by Piotr Borowiec
I help you to understand how blockchain works, guide you to first profits & share tips about how to create passive income by investing in crypto!