Why Video Games Absolutely DO NOT Need NFTs - YouTube

Video games don’t need NFTs.

There’s an ever-growing number of game developers and internet personalities begging you to

think otherwise, but the fact remains that no one as yet come up with a compelling use

for NFTs in gaming that can’t already be done by existing technologies cheaper, better,

less-exploitatively or some combination of the three.

So other than “to make more money”, what are NFT advocates saying are the benefits

of using these digital tokens in our digital games?

First, a quick explanation of NFTs and - the technology they rely on - blockchain.

If you are confident you already understand these topics, I’ll leave a timestamp on

screen for you to skip ahead to.

NFT stands for non-fungible token.

“Fungible” essentially means “replaceable”, so non-fungible means not replaceable, and

a token is something which represents a thing, but isn’t that thing.

Let’s use a metaphor as a coupon for a free ice cream.

If both you and your friend have a coupon good for 1 free ice cream, those coupons are

fungible - even though they are physically two separate coupons, they both represent

exactly the same thing.

They can be replaced by each other and nothing changes.

An example of non-fungible coupons would be if you had a coupon for, say, chocolate ice

cream and your friend had a coupon for strawberry ice cream.

Whilst the physical coupons are physically very similar, what they represent is now different

so they are therefore non-fungible coupons.

That’s what the NF in NFT means.

We’ll talk about the T for token in a moment, but first - let’s quickly talk about blockchain.

A blockchain is a long list of information about who owns these ice-cream coupons.

This list is saved and backed up on typically 1,000s of computers.

This makes blockchain a pretty reliable place to store information because even if 1, 2,

or 100s of these computers go offline, the information of the blockchain is usually still

retrievable without issue.

It’s also worth noting that the information stored on a blockchain is entirely public

- anyone at any time can come and take a look at who owns which ice cream coupon.

Because of this, most blockchains are used to record information about ownership and

changes of ownership, referred to as transactions.

So our ice-cream blockchain stores information about who currently holds our ice-cream coupons.

Every time a coupon is traded from one person to another, a bunch of computers connected

to this blockchain have to do some really complex computing to confirm that the trade

is legitimate and only if enough computers agree that the trade is legitimate does the

trade succeed.

This means it is extremely difficult to fake a transaction on the blockchain due to the

fact all these unrelated computers have to agree the transaction is indeed legitimate.

So, when we put these concepts together, we have a long list of information that is reliably

online all the time, that is really hard to put fake information into and therefore is

a pretty great place for us to keep a record of who owns our ice cream coupons.

But the thing with NFTs is  not the non-fungibility, 

nor the blockchain on which they're stored,

but the T for token in NFT, in other words what our coupon actually represents and, spoiler

alert, it’s not an ice cream.

When you buy an NFT, what you actually do is add a record to a blockchain that says

this “wallet address” owns this “token ID”.

A wallet in blockchain terms is an application you can log into to save your purchases such

as NFTs - this is usually through a third-party website.

This token ID that has been stored in the blockchain then typically points to a website

address - i.e. a web page not stored on the 

blockchain - this website address  typically points to metadata about the NFT,  

which is basically some short information  about what the NFT is that has been purchased.

For most NFTs, that metadata file then points to 

another web address - again,  not stored on the blockchain

- and on that web address is what  is most commonly an image file.

If any of these connections gets severed, you can either no longer prove you own the

NFT or the NFT itself is gone.

If you can’t remember the password for your online wallet then you can never login and

prove you’re the one who owns the associated NFT.

If the wallet provider goes offline or gets hacked you can no longer login to prove you

own it or the NFT is transferred to someone else’s wallet.

If the link your NFT points to - or the link within that file which points to the image

- is deleted then your NFT is gone and your token just points at nothing.

Or, one of those links could even be changed to point at something else other than your

original NFT which could be unsavoury or even illegal and your wallet is now verifiably

the owner of that unsavoury file.

And there’s nothing you could do about it.

Because when you buy an NFT you  don’t own the image or really 

have any legal rights at all in this entire

situation.

You have access to a wallet which has a record on the blockchain which points

to

a URL which may point to another URL  which may in turn display an image file.

So to quickly repeat that with  our ice cream coupon metaphor:  

it’s like you have your ice cream  coupon stored in your actual, physical,  

human wallet and you can of course lose  your wallet or you could lose or damage  

the coupon. The coupon itself has a tiny  unique number on it and etched into the stone

wall outside the ice cream parlour is a long list of coupon numbers and next

to those numbers is the name of the flavour that coupon number represents.

And when you go to the ice cream counter, underneath the name of the flavours is not

the actual ice cream, but another piece of paper that briefly describes the ice cream

and then says a location in the freezer where you can finally find the actual ice cream.

This is a physical analogue for the relationship 

between an NFT owner and the  thing their NFT represents.

And it's important to clarify here  that the ice cream parlour controls 

all of this part of the NFT ownership.

They can, at any time and with no repercussions, close the door and not let you in, remove

or change any of the details on the ice cream’s label or, of course, remove or change the

ice cream itself.

And just like an NFT owner does not own the image, at no point do you actually get any

ice cream.

The only thing you can do is stand outside pointing at the wall and wave your coupon

and say “hey look!

I have the chocolate ice cream coupon!”

But anyway, all of this is exactly the same with NFTs in gaming.

If you have an NFT representing an in-game gun in a shooter game, that gun’s stats

can be nerfed into the ground, or the gun's appearance could dramatically change, or the

item could be straight up removed. Just  because you own that gun as an NFT,  

it's doesn't change anything about what  the developer decides to do with that item  

compared to if it were just a regular non-NFT gun.

And every online game has an expiration date.

Eventually that game’s servers will be switched offline and your gun will no longer be accessible.

You’ll still be able to show that you own the NFT on the blockchain, but the in-game  

item - the thing that actually matters  - is gone when the game is gone.

Now that you hopefully understand a bit more about what NFTs are and how they actually

work, you should be in a  better place to understand 

how every benefit NFTs apparently offer video

games can already be done without NFTs and already exist in multiple forms across games

and platforms.

The first argument for NFTs in games is that your proof of owning an in-game item exists

outside of the game itself.

As with pretty much every argument apparently 

in favour of NFTs: this can  already be done and already is

done.

On Steam alone, you can see people’s inventories 

for 100s of games without  entering the game itself.

There’s even non-Steam websites for many of these like backpack.tf or tf2items.com

for Team Fortress 2, or Bungie’s own website for Destiny 2 items.

All of these already existing implementations let you view things like item names, pictures,

attributes, unique information like who crafted an item or that item's unique ID number and so on.

The only thing an NFT would be able to offer is viewing the unique ID number on the blockchain

- any other information would have to be stored and displayed on a third party website.

So, if we need a third party website anyway then what is even the point of the NFT?

NFT advocates would likely argue that the point of the NFT in this instance is that

ownership of the in-game item persists after the game dies.

And whilst this is indeed true that proof  of your ownership of the NFT will exist  

on the blockchain no matter how  long after the game goes offline...  

it is of course completely worthless.

Remember, the only thing actually saved into the blockchain is the item's ID number and

potentially a link to more information  that is hosted on a separate website.

If a game is at a point where developers have chosen to no longer support its in-game servers,

then it’s probably not long before they stop hosting the website that holds information

about the items too.

Sure, you can still access the online wallet  that shows that YOU are the rightful owner  

of item number 69,420, but what that item  does or what it looked like is lost to time.

That is unless someone took some screenshots or a video or view an historic version of the

online stats page on a site like archive.org…

But none of these things require  NFTs to make them possible!

If you want to brag to someone 50 years from now about your Team Fortress inventory you

can record videos, save screenshots and download webpages right now and congratulations, you

have something more valuable than the NFT gamer whose pure NFT solution shows an ID

number that leads to a 404 page-not-found 

or, even worse, that retired  website address has now

been taken over by someone unscrupulous and houses something a lot more questionable than

stats about your virtual gun.

Sort of following on from that, some might argue that the value of the NFT is in the

unique number itself - you are the one and only owner of item 69,420.

And once again, this can exist completely without NFTs and once again, it already does.

In fact, behind the scenes most games are  probably already keeping track of who owns what by

using unique numbers anyway.

Those numbers just aren’t exposed publicly because, well, what’s the point?

Who’s going to care?

That said, there can be value in exposing these numbers for example in the case of limited

or promotional items.

If we look at Team Fortress 2 again, they have multiple versions of this practise:  

numbers in

the item’s name which show when it was crafted like this cosmetic called the Dr Whoa - this

is the only Dr Whoa in the entire game whose name is followed by #3 because it was the

third one ever crafted.

There’s also the Gentle Manne's Service Medal and Golden Wrench which have the same

information in their item descriptions based on the order these limited time promotional

items were obtained by players.

And whilst these unique numbers in this example are only applied to things like the item name

or description label, there is absolutely nothing stopping developers putting these

unique numbers directly on the item’s skin.

There’s plenty of examples of  this out in the wild already, 

like CS:GO skins which you can  apply your own custom stickers to,  

or again in Team Fortress 2 there are items you can straight up upload your

own image files for.

The technology to put unique numbers on in-game skins is right there and nothing to do with

NFTs.

One thing that NFT game items offer is the ability to be traded and sell items without

opening the game that their from.

And as you might have already guessed,  this is already possible without 

NFTs and yes, it does already exist.

The same Steam inventory viewing mechanics we talked about earlier also allows the trading

of items.

This can be done in the Steam desktop client, on the web or in a mobile app.

NFT advocates might argue that the value is 

not in trading one NFT item  for another NFT item, but in

trading NFTs for money, well, digital money.

But, yet again yet again, this exact thing already exists on Steam, where you can sell

your items on the Steam Community Market in exchange for credit in your Steam account.

Whilst this credit is locked to your Steam 

account, there is absolutely no reason Steam couldn’t send

this to your bank account if they wanted to.

There is no technological limitation, there is no problem that NFTs are solving here.

NFT supporters also say the value is in selling your items after you quit playing a game,

well from a technology point of view this is exactly the same as selling your items

whilst still playing the game that we've just described.

If you've ever heard of someone "cashing out" of a game, that act is exactly this process.

In fact, selling game items or even whole accounts has existed for years on third party

platforms and, whilst not available in Steam itself, many Steam game items can be traded

or sold on third party websites.

Marketplace.tf is one such site that lets you trade Team Fortress, Dota 2 and Steam

inventory items for actual money into your PayPal account, and there’s CS:GO skin trading

sites that even let you  trade for crypto currencies 

without NFTs being involved at all.

An expression you hear from NFT fanatics often is “imagine taking a skin from one game

and using it in another game”.

And, as you might have already guessed, you don’t have to imagine this because it is

already entirely possible and exists without NFTs.

One example that comes to mind is between Portal 2 and - a game who you may have noticed

by now that Valve likes to experiment with - Team Fortress 2.

Simply owning one of these cosmetic hats in Team Fortress 2 automatically unlocks the

same hat to wear in Portal 2’s co-op mode.

This is exactly the thing touted as being enabled by NFTs, and it happened all the way

back in 2011.

Now, sure, both these games are made by the same company so making this possible was probably

relatively simple.

But sharing a hat between Team Fortress 2 and say, Fortnite, would be no easier or harder

if it was done with NFTs or without.

Both companies would have to model, texture 

and implement the hat into  their own games and engines,

and both companies will have to program their games to periodically check whether you still

own the item in the other game.

The only thing NFTs bring to this scenario is the in-built security and reliability of

a blockchain database.

But for all the other negatives associated with this technology and the ever increasing

security and reliability of traditional database 

solutions which are available  to game developers these

days, simply communicating directly with each other’s databases periodically is going

to be pretty close.

And besides, the important thing to note here is that sharing items between games is entirely

possible without NFTs.

Play-to-earn is not really an NFT concept,

but is often bundled in with NFTs.

It is the basic idea of earning something of value whilst you play a game.

This can be in-game items  that are NFTs, cryptocurrency, 

or even just in-game items or currency.

For the final time I tiredly say - this is possible without NFTs and… already exists!

We’ve already mentioned TF2 items, CS:GO skins and other Steam inventory supported

games…

All of these are already this play-to-earn concept and have existed for 10 or more years

now.

People have been spending full-time hours levelling up accounts in countless MMOs and

then selling accounts and items they collect 

in order to make a living off it and  that's been happening for decades.

The reason I believe that play-to-earn as 

a concept is so often bundled  with the ever-increasing

chatter around NFTs and cryptocurrencies is because it’s pushed by exactly the same

exploitative people who want you to spend your money on their virtual tokens and in-game

items in thinly-veiled pyramid and pump-and-dump scams.

All of which take place on this decentralised blockchain and are therefore anonymous, legally

ambiguous at best and relatively easy to get away with running scams on.

So to summarise, all of the things people argue NFTs can bring to gaming can be done

- and already are done - without NFTs even existing.

Developers just have to choose to implement these features.

Oftentimes, there’s probably good business, financial or logistical reasons that these

features aren’t more common and again those reasons are not because it’s too difficult

without the benefits of NFT technology.

And to clarify, I’m not debating whether any of these concepts are good ideas or bad

ones, just illustrating how NFTs are not what makes them possible.

Video games don’t need NFTs.