The DeanBeat: The NFT debate at the GamesBeat Summit Summit in 2022

The DeanBeat: The NFT debate at the GamesBeat Summit Summit in 2022 ...

Our GamesBeat Summit event in 2022 has ended, and I learned so much throughout the three days of the event. However, almost every talk or its accompanying Q&A session at the event focused on the topic of using non-fungible tokens in games.

The NFT Debate, which was previously described, was very interesting at the conclusion of the first day on Tuesday. NFTs are being used to authenticate unique digital items in games, and NFTs are dependent on the security and transparency of the blockchain.

David Kim, a pro-NFT debater, was the head of game publishing at Wax Studios, which was founded by the founders of the Wax blockchain protocol. He was also the cofounder of Vlambeer, which produced nuclear Throne and ridiculous fishing. Jon Radoff, the CEO of Beamable, moderated the debate. Both had a sense of the technology, and the reasons.

Kim stated that he is passionate about blockchain technology, but that he does not support every blockchain implementation so far. And Ismail said that blockchain might be beneficial in games one day, but that they were not there yet.

I believe there is a lot of misconception right now among the general public about what blockchain and NFTs are, because what they see is the use case and thinking that the technology is for rather than understanding theunderlying technology and all the potential use cases, according to Kim.

Defining NFTs and blockchain

Moreover, Kim noted that blockchain is a decentralized database for anyone who can access it. This opens up a slew of possibilities over what they currently see in web 2, where all data is centralized and controlled by individual entities. Moreover, when people think of Bored Apes or the idea of a JPEG with a license of ownership. That is not what an NFT is. It is true that a blockchain is the storage unit of information that can be used for any purpose, just like any other

Ismail said that my view on the blockchain isn''t as straight. I think blockchain might be of interest someday. I don''t think the idea of a decentralized database existed, because there is no way to trust information in a decentralized database.

Ismail has been added, like for any useful application, in software, or anywhere, you need some sort of authority somebody who can moderate it, somebody who can make sure its safe, somebody who can make sure its reliable, or somebody who can handle legal issues or financial issues.

He said that you may make sure that its being implemented according to the laws of law in all parts of the globe.

Ismail said that even if I am a game developer, I want to include a decentralized database or the content from a decentralized database, or I am on a website, and I cant trust that whats on there, if its safe for me or illegal for me in a fair manner? I think the most obvious blockchain application for internal use is to be involved in companies doing asset management or production line management.

Ismail said that he had agreed on what technology is a digital ledger that can save information, according to Ismail.

We both agree that it is not just the Bored Ape thing. Ismail claims that the whole thing is probably the most cynical.

Radoff asked the audience if he had a Bored Ape. There were no people who raised a hand among the 130 or so people there.

People always forget that blockchain is structured so that it is both decentralized and you can trust the data, according to Kim. That is the main difference. Right now, blockchain has the potential to alleviate legal problems. For example, you may also choose and choose what data your project has.

Ismail responded, Were conflating two uses of the word trust. I can trust that the blockchain information is indeed the correct data. Im not sure if it works for me. If I load everything from a database, you don''t have to. That''s the whole point. You need to pick and select what you load in.

Ismail said that at the time, they were building a central authority. So then the decentralization isn''t all that.

Kim said, "The data is there. Right? People have the ability to control what data is available. But as you think about the real world economy, the world economy is decentralized. You may sell it in a variety of ways in a variety of ways. On the internet, it''s not really possible to do that.

He noted that you may take physical items and sell them on eBay. However, he was also refering to digital information or digital goods.

Kim said that if you own an item in a game and you want to sell it to somebody else, you can really do it except by a centralized system. So, if I own a car, I can sell the car to somebody else in a wide variety of ways, because the whole economy is essentially decentralized. So, blockchain allows people to sell things in a decentralized way, which gives them the choice.

Ismail asked how many people choose to have.

Kim said she is unsure who will sell it, what they''ll sell it for, and where she will sell it.

Ismail had responded, but there is nothing technologically necessary to prevent that.

(This was where I didn''t have much sympathy for game developers or game platforms. If they are capable of doing this for gamers, why haven''t they actually done it already? I think the blockchain would be able to do more for gamers than they actually desire.)

Kim said: "It''s a legal matter, not a technological issue."

Ismail asked, how does blockchain work?

MMO history

Kim said that we should take a look back at the last 20 years of game industry history, since weve had massively multiplayer online games. These multiplayer games have digital items that people want to buy and sell. They have been doing it for two decades, without the permission of the game makers.

Kim said that MMO companies have told him they estimate the gray market economy for digital goods sold outside their games via private arrangement or gold farming is three times the size of the actual game economy.

Right? It''s all gray market [sales], right? You have to meet someone where you can transfer money, and then you also have to agree to meet in-game so you can transfer the item. The risks of being ripped off are enormous. And, therefore, the game operators are concerned that much of the economic impact is happening.

Kim said that the blockchain could help you with these [prohibited or unlawful] transactions happening and make them aboveboard on a blockchain.

The game operator is a completely open source. They can see all the data and then manage their economy appropriately. Well, now, the question becomes, yes, why should you just do that? Why cant you with the game operator just allow it? Kim said.

Money transmitter licenses

Kim said that there is a possibility of acquiring a money transmitter license. If you want to be a middleman between two parties who are transferring money between them, then you must get a money transmitter license. It is extremely difficult to get in the United States, and it requires a separate license in each state. This process is quite ineffective for a game company to try and do this on their own.

Based on my experiences on Tilia and Forte, I know this is correct. Both were licensed as soon as possible.

Kim said, The blockchain allows you to essentially take an item. When you refer to an in-game item, but instead of the item itself, it is basically a key, which is digital access to that item in the game. So, if you had a Steam Key, except its for an individual item, you may sell it anywhere. And for them, it''s economical to do this, because they''re not doing transactions for another game. They''re probably doing transactions for a variety of purposes.

Kim explains that certain game companies want to compete in marketplaces so that it won''t happen on the side. But that brings me back to why blockchain is now, because you can do it with a database? Ismail asked.

If you do it with a database, then somebody has to operate that database, according to Kim. The blockchain is decentralized, and no one entity controls or owns it. That means that they will pay all of the extra rent.

Ismail said, If youre still doing this, you''re still going to be dependent on a centralized facility to manage, manage, and deal with the transaction?

Kim responded, "It''s not" the truth. The blockchain isn''t a central organization. You may choose. If you look at the majority of blockchains, you can go to OpenSea, Rarible, or whatever. The Wax blockchain has a total of tens of thousands of marketplaces. You may go to and list, rather than going to Amazon, right?

Again, the technology is just asset management. It''s just data. If I have the middleware to connect with that database, what is the real benefit to me as a game developer there? If I just have a database or a blockchain that has been licensed to transfer money, then I dont care what I mean for the user.

Kim said that all of these kinds of databases must be handled by a central authority, a company. Think of it in the same manner.

Ismail said that youre is still dependent on a central authority for that license because I dont have that license, I do not have the money transfer license.

Kim replied, but you have to choose from a variety of authorities, who are the owners of the license you can choose from, rather than being stuck with one.

According to Radoff, blockchain technologies are built on it, which people may gain access if they choose to participate in the economy.

The costs of blockchain games

Radoff said it was evident that the subject is polarized, and he asked Ismail why.

Ismail said that a significant portion of it is related to whether people believe it would benefit from the investment. And this is a rapidly developing technology, and there may in the future be applications. But I believe the benefits are unclear right now. And the benefits are greater, as David said, for a lot of people. Right now, many people expect pump and dump schemes and other scams, and those might not be representative of the entire space, but they are a reputational issue with blockchain.

Ismail added that, as a result of the NFT, many people don''t think it is a significant benefit. I still deal with a game developer who has an API that works best for your system, right? I think it''s great. So, how do they integrate their things, whether there''s a RESTful API or not. I''m just going to select the one that works best for my system, right? If there are seven providers that are using the same database, it''s great.

He noted that the cost includes environmental concerns, and that they are likely to be discussed in a million ways.

Im seeing lots of pump and dumps. Im seeing this disturbing discussion about decentralization, even if all NFT seems to be centralized around OpenSea. And if that goes down, 90% of the NFT-related apps stop working because everybody builds on the same thing because that one works.

On top of that, Ismail said he sees gold farming happening and exploiting people in the developing world in play-to-earn games (like Axie Infinity).

Ismail said that a lot of people are seeing a repeat of the early stages of the free-to-play period, where a lot of people were just concerned about where the outcome would go. I think that in some ways free to play has had huge effects on how we design games and how we build games. Some people might argue that it was not the greatest outcome.

Radoff, a free-to-play game manufacturer, said that his experience is similar to those discussed a decade ago, and that he feels like reliving it.

According to Ismail, there is a real disadvantage outside of just well try and if it works, it will. I think a lot of people are just kind of tired and worried about this these experiments, and also about the direction for the game, because free-to-play worked out. I think that in your case, it definitely worked out. However, I think a lot of people are concerned that the games industry might be oriented towards play to earn.

Radoff said he wants to return to play to earn. However, he asked Kim to talk about the benefits for game developers.

The greatest benefit that game developers are seeing is that a lot of people who are making more traditional games realize that if they fail to implement some sort of legislation, the gray markets will appear. So their choice is whether or not to implement a system that will allow people to do this. Except that central authority does not exist at the moment. However, it might not be the easiest UI and UX at the moment. So that is the main benefit that most businesses are seeing.

Kim said that the majority of her environmental concerns are caused by Bitcoin and Ethereum.

Bitcoin is even capable of having NFTs on it anyway. So it has absolutely zero value to gaming. Ethereum does not have a lot of value because its capacity is too small. By the way, Ethereum only accounts for less than 5% of all blockchain transactions every day. So, you are talking about, a small portion of what blockchain is currently.

Ethereum isn''t capable of doing enough transactions quickly enough to accommodate a game, which is why most games utilize a Layer 2 solution or alternative blockchains, according to Kim.

The reason they have significantly higher capacity is that they do not use proof of work, which means they''re significantly less environmentally friendly. So what people perceive right now, in terms of what has been so far, are the simplest implementations. This technology is actually only widespread for a year now.

Kim said that the technology has been available for games for six months, and that you cannot build exceptional games in that time frame.

Play to earn and exploitation

Radoff introduced play-to-earn games like Axie Infinity. It was horrifying. I find it fascinating. I am a game developer, and I understand how people play games, and how people will always ensure that everything is done in progress. And they outsource it to more vulnerable people who are in very difficult situations, and then you get this weird replication of capitalism in our video games.

He said that you create an extrinsic interest in obtaining money. And Ismail believes that making money is a bad reason to play games.

Ismail said that play is sacred. It''s the playfulness of a game. It''s either going to save the world immediately, or it''s going to create these terrible scenarios. In some play-to-earn games, you have already seen it.

Ismail said that blockchain games are a play process and that it is a safe place for games to be played. He is concerned about the social impact of blockchain games, the mental and ethical implications, and how its not sustainable as gamers continue to find ways to exploit games, as they did with the Diablo III marketplace.

Kim said, I mean, youre not wrong. So players will always find ways to be successful in games. And interestingly, what people right now understand as play to earn, were kind of actually I think, starting to see that die out. It was a good start. It was an initial implementation that could be accomplished quickly. This is why one one you had the issue of rapid asset price valuation inflation, right, which was never intended by these game designers. It just happened because they didnt echilibr the economy correctly initially.

Kim said that exploitation of guilds led to Yield Guild Games. (My own note here is that Yield Guild Games focuses on guild members'' rights and provides them with the option of owning rather than simply farming.)

This is why a lot of these games began to be developed, allowing players to learn how to maximize their return as quickly as possible, resulting in these games becoming unviable essentially. So what I think is going to happen is youre going to see the current crop of play, which is basically farming and mining gamified, is going to die.

As I talked to developers all the time, I said, "What you know is" and "what you need to do is tap the pike. Blockchain is going to be expanded in many ways. It is amazing how many different applications people find. These are truly games, but you have to actually sit there and play them. These are actually games.

Kim noted that players will compete in these games and acquire ownership of the items in the game.

Ismail said: I''m not seeing what NFT/ blockchain is adding here. Because if we as an industry agree to do that, we can do it.

Kim said she will need a middleman, but Ismail said middlemen already exist among the platforms. (Again, Kim addressed this point earlier.) Ismail said he should be taken too seriously.

If someone uploads something illegal to the game, Ismail said the developer may select what data from the chain it actually acknowledges. Ismail said, We cann''t even recognize genitals in Roblox. This is an unsolved issue.

Kim noted that the only games you will recognize are the ones that the game minted.

Then Ismail asked what was the advantage? Kim said that you may take the NFT out of the game and sell it to someone on a secondary market where it may be used to earn real money.

Kim said that you as the game developer don''t need to deal with money transmitter licenses, know-your-customer (KYC) and [anti-money-laundering laws] AML.

According to Ismail, the same thing would happen if the game developer hired someone who has the license.

Kim said that no one is there to do that. And he said that with blockchain, consumers will get a choice of secondary market services. If you go through a centralized service like Amazon, and you are a game operator, you are subject to Amazon''s terms and fees.

Kim predicts that the services will benefit from competition on the blockchain.

Kim said that they will dictate what the terms are.

The player side

Kim said that while people think of blockchain and NFTs, they automatically think of it as a games key. I think what would need to happen to try and separate some of this is game companies should not go out and say, Alright, now were going to have this capability that will allow you to buy and sell items together.''

He referenced Fortnite, where you can''t trade items in the game. However, if you Google fortnight skins, you will notice a bunch of sites that are selling Fortnite skins for real money because they are just selling the entire account.

People will select a strategy to do this right now, according to Kim. They dislike the idea of NFT and blockchain because they have all of these negative perceptions that have nothing to do with blockchain games.

Ismail claims that the negative perceptions among players are there for a reason.

I think there may be future implications or applications. For the time being, im listening to you that blockchain is bound to the same regulations as money, because eventually, it will be, and if the greatest advantage is that it is now unregulated, I''m not sure if I want to invest a lot of future into that. Thats kind of where I am.

Radoff said he believed we didn''t get to a total agreement or solution in the talk, but found it helpful to hear the heated debate.

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