Non-Fungible Tokens, or NFTs, are decentralised, which means they get developed and can change ownership several times to many different people. The great thing about NFTs is that they have become the new way to invest, collect and earn, as they can be used with very few limitations.
So many NFTs exist, and more are being produced daily as digital art, music, and various iGaming products. The big question is: Where are these digital assets being stored? And the answer is - On a blockchain, of course!
The Blockchain is like a super-server, storing the digital assets, the development history, and every transaction in the form of connected blocks linked with digital chains. Due to its high level of transparency, it also exists in provably fair games, where players can check that their game results are fully automated and not manipulated by a human.
Decentralised - Like cryptocurrencies?
Both NFTs and cryptos exist in a virtual world, and yes, they are both decentralised; however, there are several differences between them:
NFTs are virtual assets that are all unique with different values, whereas there is more than one Bitcoin, and they all look the same with the same market value.
People buy NFTs to own digitally or as an investment to sell for profit. Cryptos are purchased, usually at a lower value and then sold again when the value increases to make a profit.
NFTs are more likely to remain as digital assets and are generally used to purchase digital goods. However, cryptos are slowly becoming more like fiat currencies and can be used to buy everyday items - including pizza!
NFTs can be purchased with cryptocurrencies, fiat money, or traded for another NFT. Each NFT's price differs, and due to the transparency of blockchain technology, the transaction history will forever be available to future buyers and sellers alike.
NFTs in the iGaming Industry
Because NFTs exist virtually, Game developers have integrated them through game accessories, tools, and avatars. At online casinos, gambling enthusiasts can purchase NFTs that range from slot-themed prizes to assets inspired by the casino house itself!
A great way NFT integration exists in the iGaming industry is through reward systems like VIP access and loyalty programs. Loyal players can receive an NFT reward when playing specified games and interacting with certain promotions.
NFTs have grown exponentially since 2020, and although some gamers might see it as an unnecessarily risky innovation, it has been under their noses for a very long time. Chris Gonsalves, the CEO of Web3 esports platform Community Gaming says:
Although some gaming enthusiasts are sceptical about NFTs, the fact is that they have been buying and collecting them for years. Now NFTs appeal to a wider audience. Today, younger generations spend money to have them as collectables, whereas those who have been playing online games for a long time already spend cash on rare game pieces, skins, and accessories.
The Future According To the Stats
Undoubtedly, NFTs have entered the iGaming industry in full force. Players can expect the non-fungible token on most platforms with crypto games. Online casino customers can expect its growth in many different aspects and areas in the industry as it has become a trend to own virtual property over the last three or four years.
MarketsandMarkets have estimated NFTs to increase to over $13 billion in value by 2027. To achieve this colossal increase, it would have to grow at 35% annually. As technology advances, online shopping, virtual gaming and virtual investments will continue as we move towards a technology-driven future, including NFTs.
On a smaller scale, according to the Dapp Industry Report, in January 2023, NFTs saw the highest trading volumes since June 2022. The NFT market reached $946 million, a 38.5% increase from December.
Ayvar Gabidullin, the Business Development Manager at Slotegrator, is excited for NFTs to keep expanding in the casino industry and has this to say about the future of NFTs:
With online casinos often being early adopters when it comes to new tech and advances, it only makes sense that NFTs would become a part of how the industry functions.
NFTs are still the new kid on the block and, therefore, still unregulated. For now, you can buy an NFT and technically have no obligation to pay out as no regulations exist around this topic on owning a virtual online property. However, the European Union plans to regulate NFTs as they did with cryptocurrencies.
Unfortunately, decentralised finances are closely watched as there are concerns surrounding money laundering and fraud. Because NFTs are stored and processed through blockchain technology, the privacy of the buyers and sellers is kept anonymous. This causes upheaval as transactions are untrackable due to the protection of cryptocurrency's privacy-enhanced technologies.
NFTs are assets, and in the world of tangible assets, the profits from sales are taxable. For now, the profit from NFTs is tax-exempt, as no clear rule on this exists in any country or market.
The iGaming industry is always trying to keep up with trends and stay relevant, as with any business that wants to continue making money. NFTs have entered the online gaming world, but leaving them unregulated for much longer can cause chaos in the highly regulated and licensed community that is the online gambling industry. Markets worldwide must decide how best to regulate this new investment method before the regulation becomes irrelevant.