Bitcoin · Cryptocurrency · decentraland · decentralnd · ethereum · Games

Proof of work in Crypto Games


Many of the early Non Fungible Tokens are based on digital trading cards and while some have an interesting creation story and a cult following, they don’t have verifiably high, sunk energy costs that we see in more complex games. This complexity is an easy signal to verify for gamers. Complexity isn’t enough though, must also be fun.

Projects, that require significant:

  1. Development and design time by skilled individuals who;
  2. Haven’t been pre-paid but;
  3. Eventually get paid by end users for their creations;

Will be the first widely successful NFT projects. Neon District and Decentraland are probably the most promising at this stage but are yet to hit number 3 in this list. There is significant opportunity cost for a skilled game developer at this stage as centralised platforms compete for their time. Evidence that they are migrating to an open platform to build applications is worth watching. It has been limited so far.


Easy to Verify

Interactive worlds have an advantage in that they are the easiest thing for an average person to quickly verify as complicated and time consuming to build. Most gamers are familiar with the size and difficulty of creating something like Fortnite. When they enter a complex game like Red Dead Redemption, the advances in attention to detail are widely shared. They know intuitively that skilled labor has been sunk into it. It is of course important for the game to be fun too, but purchasing skins for a game that feels well developed feels safer than buying another digital trading card that has no users.

Status Symbol as a Service

Decentraland have created simple builder tools to allow the average person to create a basic layout for their plot. This is a great way to ensure the land doesn’t remain bare. The contest created 30,000 parcels. Let’s say an average of 10 minutes was spent on each parcel, thats 500 hours of development. And let’s say only 30% of that is really attractive or unique. That’s still 150ish hours of creative input for almost no return.

More complex 3D designs, will signal that a highly skilled developer has been involved and the land will in theory be more valuable. Other methods of signalling may develop such as appearances from artists like Marshmello in Fortnite. A good way to show high status in Decentraland is to ‘waste’ money on developing on a large land track. So Imagine flying over a plot of 10×10 parcels of land and just seeing a logo in the middle. The owner has shown they can waste land just to show off they can. A bit like having large gardens on an estate.

Many early trading card NFT’s are looking to use narrative alone to create ‘legendary’ and ‘epic’ scarcity but storytelling can only do so much. Users want to enjoy the game experience but also to know that if they invest time, other skilled users have risked their time adding to the project as well. Early adopters take this risk alone and the Total Skilled Development Time, that hasn’t been financed through an easy money, grows. Once the basic mechanics work, and these early adopters get paid for their content, this is the main growth metric to watch.


Feedback welcome.


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