If you have been involved in the NFT ecosystem then you have probably heard about all the great benefits of this novel technology. But what if I told you there is a dark side?
That’s right it is not all sunshine and rainbows. This technology has its flaws and this is especially prevalent in the gaming space.
That is why in this article I will be covering 7 reasons NFTs are bad for gaming. So without further ado, let’s jump right in.
What are gaming NFTs?
Gaming NFTs are like any other form of NFTs. Essentially, they are decentralized contracts that enable scarcity in the digital world. Each NFT is tied to unique metadata that cannot be deleted or changed.
Why are NFTs bad for gaming?
- Outsourcing costs to consumers – gaming companies can ultimately use NFTs as a way to outsource data storage. Instead of a centralized server storing the NFTs they are instead secured by a decentralized network of computers operated by the community. This places the costs of electricity and hardware on the users.
- Exploitation – in an industry riddled with various monetization methods, NFTs will only contribute to this money-sucking strategy. For instance, it will provide a new way of implementing microtransactions. NFTs will allow users to customize their characters in new ways. While this provides new opportunities it can also be seen as just another way for creators to milk money from their fans.
- Little accountability – in the cryptocurrency space NFT gaming projects are often anonymous. Often times companies operate without disclosing their identities. This means they are rarely held accountable and it facilitates nefarious activity.
- Hacks – there is no denying that hacks are rampant in the NFT space. The technology is in its infancy and the technical nature often leads to errors in the code. Ultimately, bugs are exploited. As a result, NFTs are consistently compromised and stolen. On a side note, this is why it is vital to use a hardware wallet. The one that I recommend is the Ledger Nano X. Click here to check out my review.
- Environmentally damaging – as blockchain technology uses energy-intensive hardware it can be a significant burden on the environment. To put it into context, the estimated energy expenditure of the Ethereum network per year is over 0.01 TWh/yr. As gaming NFTs become even more popular it will only contribute more to the problem.
- Self custody – gaming NFTs are stored by the user, they are responsible for storing and securing them. Not only that, but if their collectibles are lost or stolen then they are not likely recovered. This is in contrast to the traditional gaming space whereby if users are scammed they are usually compensated.
- Exclusion – as NFTs are unique assets this can ultimately exclude gamers who are not participating in the collection. For instance, imagine there is an NFT gaming collection with 10,000 items. Each item represents a ticket to an exclusive metaverse. While this creates demand for the token it also excludes fans who cannot participate.
As you can see, NFTs have several factors that make them detrimental to the gaming space. From exploitation to exclusion. That being said, the technology is in its infancy and only time will tell if it’s a blessing or a curse. I hope you found this article useful and thanks for reading it.
Want to learn about NFT utility ideas? Click here to read my previous article.