Myth about blockchain, NFTs, and game monetization

There are many myth and misconceptions surrounding blockchain, NFTs, and thus play-and-earn game monetization. Here are four common myths and information to dispel them.

Myth 1: Blockchain and NFTs are eco-disastrous

A common misconception about blockchain and NFTs stemming from the first two widely adopted blockchains, Bitcoin and Ethereum. These use energy-intensive Proof-of-Work protocols that harm the environment. And since Bitcoin cannot support NFTs, it is irrelevant to discussions about play-and-earn games.

Most blockchain activity now occurs on newer chains that use a Proof-of-Stake protocol that is far more energy efficient than traditional ecommerce or gaming servers. There are roughly 25 million daily blockchain transactions, most of which are Proof-of-Stake, with Ethereum accounting for only about 200,000. (less than 1 percent ). So long as you use a Proof-of-Stake blockchain like WAX, you can be sure that your game will use less energy and emit less CO2 than running similar functions on your own servers or in the cloud.

Myth 2: Blockchain and NFTs are scams

For example, like any other technology used for storing, processing, and communicating information (e.g. the internet), blockchain can be used by unscrupulous individuals to commit fraud. But that doesn’t make blockchain or anything else a scam.

Instead, let’s look at how NFTs and blockchain can be used to monetize games. An NFT is a key that allows a player to use an item, service, or benefit in-game.

Because it’s a blockchain-based NFT, the player can sell/trade ownership and in-game rights for real money. So you’re basically giving players another option for what to do with their digital in-game items. It’s not a scam to give players more options without taking anything away.

Myth 3: Creating real-money trading systems in-game is easier.

This myth spread by people (especially gamers) who don’t understand how a real money marketplace works. Creating a system to facilitate a real-money transaction between two third parties may appear simple on a technical level, but those who believe this myth are unaware of the significant legal and regulatory issues involved (e.g. players).

Many jurisdictionsMany jurisdictions require special licenses and systems to comply with KYC, AML, and tax reporting regulations. The majority of game companies lack the expertise or resources to meet these regulatory requirements.

Enabling players to sell in-game items on third-party marketplaces instead of in-game marketplaces removes the game publisher/developer from the transactional role and shifts the burden of meeting regulatory requirements to the marketplace operator.

Mayth 4: Play-and-earn is only for money-hungry gamers and isn’t sustainable.

People in countries like the Philippines, Venezuela, Brazil, and India are earning a living by playing play-and-earn games. You think, “why would anyone want to play something like this except to make money?” and “this has no connection or relevance to ‘real games’.” Play-and-earn has been around for decades, in the form of gold farming and skin trading.

It’s not like these activities haven’t existed for decades (even in games that forbid trading of in-game items) because players are looking to make money. Like any other economy, a play-and-earn economy requires an equilibrium between sellers and buyers. These “farmers” sell gold or skins to real players, risking being scammed or banned.

In addition to giving game developers more visibility into previously opaque areas of their economies, Play-and-earn allows them to earn additional revenue from that activity while giving players a more secure, transparent process for making these transactions.

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