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What are tokens?
Crypto tokens play a central role in blockchain games, as they often act as a means of payment.
But you also have a new kind of token that is starting to become very popular: the non-fungible token (NFT).
In general, you can think of a token as a digital asset that you can send to others and exchange for money.
Let’s talk about the two most popular tokens:
- Fungible tokens (FTs). The standard token as you know it.
- Non-fungible tokens (NFTs). The hip, new variety.
What are fungible tokens (FTs)?
A fungible token is the most standard cryptotoken. You can compare it to chips in a casino.
For example, the casino has a limited number of chips in circulation that they keep a good record of.
The visitors use these chips to play, and the visitors understand that these chips also have value, because they can simply exchange them back for their trusted currency afterwards.
The chips in a casino are fungible. Fungible means that one 5$ chip is identical to another 5$ chip.
Nobody cares which 5$ chip you have and there is absolutely no point in exchanging them.
The fungible concept will become clearer after the clarification of what it is not.
What are non-fungible tokens (NFTs)?
NFTs thus stand for non-fungible tokens.
Building on the previous example, the chips in a casino could easily be made non-fungible.
We can do this by giving each chip its own ID tag. This way, you can precisely distinguish one 5$ chip from another 5$ chip.
As a result, no two chips are the same and this is central to the meaning of NFT.
In addition, an NFT can also contain more data such as an image or video (often in the form of digital art!).
NFTs are an important part of blockchain games, so important that people sometimes refer to them as NFT games.
NFTs will usually have to be purchased during a game in order to earn fungible tokens, which you can then sell for real money.
Both fungible tokens and non-fungible tokens can be stored in your wallet and sent to others.
The value of tokens
Tokens also have a certain value. Their value is determined by supply and demand. In other words, both the scarcity of the token and the buyer numbers determine the value of such a token.
Some tokens of games can multiply in value up to 100 times due to the huge demand that arises when a game starts to become successful.
This is also one of the reasons why some people then manage to earn so much.
How big is the play-2-earn market?
What are play-2-earn blockchain games?
- What are P2E blockchain games?
- How do P2E blockchain games work?
- What are tokens?
- How big is the P2E market?
How to make money with P2E blockchain games?