The Transition From Dumb NFTs To Smart NFTs
An NFT — a Non-Fungible Token, is a fascinating crypto application. Remove the fungible aspect of crypto that often makes them rival national currencies, and you have an NFT. An NFT is a digital token used to represent ownership of unique items. They are transferable but cannot be interchanged. The concept has exploded in 2021, with over $200 million in trading volumes seen for crypto art on NFTs in March 2021. And with blockchain gaming taking similar strides in popularity, perhaps it’s important we take a closer look at NFTs.
A cryptocurrency like Ethereum is fungible. If it is traded for another Ethereum, we will have another Ethereum same in value. An NFT, however, is non-fungible. If you have traded an NFT, you will have a different item since NFTs don’t hold the same value amongst each other. This unique property allows NFT to have only one official owner at a time. An NFT is essentially a certificate of ownership for a digital asset and is used to prove ownership of a digital item, including art, music, or in-game items.
How NFTs work
As a concept, NFTs aren’t new. They are units of data stored on a blockchain digital ledger — a consequence of the blockchain technology that enables developers to store extra information, making them unique in nature. The ownership of NFTs can be managed through a unique ID and metadata that no other token can replicate. They rely on the blockchain — the tool is used to create the NFT — and can be traded in NFT marketplaces like OpenSea.
Since we’re talking about a blockchain application — it’s important to note that the data on these NFTs is typically immutable, recorded permanently on the blockchain. While this is great — it marks their authenticity — it’s also time NFTs themselves got an upgrade.
Smart NFTs are NFTs that have properties in their metadata that can be changed or altered. These NFTs, along with their metadata, reside on a blockchain. Metadata is the data that provides information about other data on the NFT record. In the case of NFT, it describes the NFT’s essential properties, including its name, description, and anything else its creator feels is important. This data acts as the primary data that defines the NFT and cannot be changed or modified in the future. This unmodifiable metadata is called Static Data. The metadata that can be modified or changed is called Dynamic Data.
Now how does this help a rising new industry such as blockchain gaming?
Regular NFTs don’t truly give gamers the freedom to send or receive their in-game items due to game developer’s complete centralization of in-game items. The gamers also bear the risk of in-game items being manipulated or totally shut down by the game developers. It is challenging and time-consuming to create a whole marketplace and inventory for in-game items.
In-game items play a major role in any video game, enabling players to own collectibles and digital assets. However, they are not easily transferable or exchangeable. Brands like Altura function as smart contract platforms that enable game developers to mint, distribute and transact Smart NFTs representing in-game items. This provides the gamers with true ownership of their in-game items and accelerates the adoption of NFTs. These smart NFTs can also be transferred and distributed.
Smart NFT platforms like Altura bridge this gap by providing true ownership to gamers for their in-game items and the game developers plenty of opportunities to monetize on their product by minting and distributing Smart NFTs representing in-game items.
Loot Boxes are virtual products that can be redeemed to receive random in-game items. The authenticity of this randomness or the odds of receiving a certain item is in question because of the game developers centralized control of loot boxes. With smart NFTs, when the user initiates an in-game function to open a loot box, Altura calls for a Verifiable Random Function (VRF) for randomness.
The VRF delivers random numbers to the loot box smart contracts and cryptographic proof. The VRF ensures the tamper-proof integrity of the Verifiable Random Function process. The Loot Box is then opened, and random NFT, which no one can predict, is provided to the user. This NFT is unpredictable to anyone, including the Smart NFT provider, VRF provider, and game developers.
The typical way of generating revenue through Smart NFTs is through transaction fees. Every time a transaction or transfer is complete, the Smart NFT provider takes a small fee. Game developers can also generate revenue by providing in-game items or loot boxes that have an infinite supply. Additionally, the developer can pre-define a fee they are entitled to receive whenever a transaction is made.
Altura is the next-generation gaming NFT platform, with a goal of providing gamers with true ownership of their in-game items and accelerating the adoption of Smart NFTs. Alura token, the native currency of the Altura digital-asset marketplace, and is used to buy and sell NFTs.