Since volumes skyrocketed in 2021 across marketplaces, non-fungible tokens (NFTs) have seemed to become a focal point of the art and gaming world.
Love them or hate them, NFT enthusiasts argue that the medium is in the infancy of its evolution. Adopters are beginning to appreciate not only the aesthetics of NFTs, but their potential usefulness.
On this episode of The Scoop, Head of Growth at Parallel NFT Franklin Fitch and artist Dave Krugman joined host Frank Chaparro to discuss how NFTs are radically transforming the relationship between creators and the art market, as well as the gaming industry.
Krugman compared the current state of NFTs to the early days of Instagram, when early adopters had to learn to become comfortable with sharing content without monetizing it. As the network effect of users and creators grew, eventually Instagram gave creators a way to make money on their efforts -- with certain caveats, like follower milestones. According to Krugman, adapting NFTs comes with an even steeper learning curve.
"This is a technology that is fundamentally going to change the way that we connect and operate with each other -- it's a lot," said Krugman, when referencing artists who are anti-NFT.
Fitch noted that NFTs would be particularly disruptive for the video game industry in the realm of creating incentives for gamers such as loot boxes, which are tethered to their ecosystems and have no external value.
Unlike traditional in-game assets, NFTs fundamentally allow an asset to be exchangeable, tied to a marketplace, and to allow for social signaling between players.
"I can have assets that are going to be fluid and move around between different ecosystems." Fitch explained. "So you're kind of disrupting a lot of the power that gaming companies as centralized institutions have historically had over their users with this technology."
By allowing users to own their content and trade over a marketplace instead of within a closed ecosystem, NFTs create a potential for greater flexibility and ownership to experiencing a game as well as add further complexity to a player's experience using an in-game asset. As Fitch noted, "It adds new levels of competitiveness, new levels of participation, re-imaginings of incentives, right? New social layers. I think it's fantastic. And this is the power games."
In this episode, Chaparro, Fitch and Krugman also discuss:
- How NFTs create social signaling as a form of "modern tribalism"
- Energy consumption of NFTs
- The complexities of building a game for Web3
- Why some artists are "Anti-NFT"
- How Parallel is developing infrastructure for game developers
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