Understanding What Makes Virtual Items Valuable

Understanding What Makes Virtual Items Valuable

Why do virtual items have value? This is a question I’ve heard asked countless times by people who don’t understand why someone would spend $20,000. virtual land or $2,000 for a set of virtual armor. For these people, spending real money on intangibles may sound ridiculous, but for someone who grew up playing video games with algorithmic scarcity, it makes some sense. Let me explain…

famine

Scarcity is undoubtedly an important factor in assigning value to virtual items. For example, while Diamonds were some of the least used raw materials in the Minecraft video game, they were also the most valuable.

Diamonds were often used by players as a store of value in online multiplayer games. Minecraft servers who treat them like treasure and hoard them in secret chests. It was sometimes used as a bartering tool when players traded diamonds for other scarce in-game items. I call this period in Minecraft’s history the “age of the diamond standard.”

Diamond Mining (Left) and Diamond Armor (Right) in Minecraft

In the age of the diamond standard, Minecraft diamonds were also difficult to obtain. This is another major reason why they are of such great value to gamers. To get started with diamond mining, you first had to spend hours acquiring the materials needed to make diamond mining tools. Only after you have the right tools diamond mining expedition; and even then, you would have to spend hours mining enough raw diamonds to produce a full set of diamond armor.

Benefit

Minecraft diamonds were also valuable because they had great in-game uses. A player with 24 diamonds can use them to craft a full set of diamond armor, one of the most sought after. in-game items in the age of the diamond standard. Diamond armor was not only the most durable armor type, but also gave players the highest degree of protection against hostile beings.

Wearing diamond armor and using diamond weapons statistically increased your chances of survival. If you managed to survive, you could protect your in-game fortune. You can even increase your productivity in the game by using diamond tools. Like investing in the real world, putting your (diamond) savings to work was a surefire way to pool your wealth in Minecraft.

Player Wearing Rune Armor (Left) and Fishing “Swords” (Right) in Runescape

Like diamond armor in Minecraft, a full set of rune armor has taken the cake as one of the most requested in-game items in Runescape. In middle school, I would forego after-school playtime to hunt swordfish, or “swords,” with my friends on the island of Karamja in Old School Runescape (OSRS).

After hundreds of hours of sword hunting and countless trips to the Grand Exchange, I’ve finally gathered enough. in-game currency to buy my dream set. Thanks to my new rune armor, I could finally kill some of the most menacing and powerful enemies in the game and reap rewards with coins, the local currency of the Runescape universe.

The virtual economies of Runescape and Minecraft had a lot in common. Virtual items effectively served as stores of value, as they were algorithmically scarce and difficult to procure. I had swords in Runescape. I had diamonds in Minecraft. In both games, I’ve spent an embarrassing amount of time and energy capturing value and storing it in these virtual assets. these species value capture mechanisms It is also available on modern metaverse platforms such as Decentraland.

Value Capture

golf craft is one of a handful of new and promising play-to-win games that allow players to extract, store and trade value in Decentraland. In Golfcraft, players complete virtual mini golf courses to earn gold coins, the currency of the Golfcraft ecosystem. Coins are both scarce and difficult to obtain. They also have in-game utilities, making them a good store of value.

Golfcraft Game (Left) and Community Designed Golfcraft Wearables (Right)

Tokens can be reinvested into the game for a chance to win tickets by playing competitively. Tickets can be used to purchase Golfcraft wearables. Some Golfcraft wearables increase power-ups, which helps players gain more XP and coins for the time they spend playing. In this sense, the wearables in Golfcraft serve a similar purpose to the armors in Minecraft and Runescape. They are purchased by players using in-game currency (tickets), and composite in-game wealth. Diamonds have a similar but slightly different function.

Golfcraft players are given random diamonds just for playing the game. Players must spend diamonds to upgrade their club’s attributes: strength, control and aim. Upgraded clubs are more valuable in the secondary market because they provide more benefits to in-game players.

Value Extraction

The main difference between games earned by playing like Golfcraft and older games like Runescape is that they leverage technologies that allow players to easily move value off-platform. Because golf craft wearables and clubs live on-chain as NFTs, they can easily be transferred to third-party markets such as: Offshore and sold to MANA, Decentraland’s local currency. Players can then exchange MANA for FIAT currencies such as US dollars, which have more benefits in the physical world.

This was one of the most critical features in Runescape that was missing from games like Minecraft. Players would spend hundreds of hours grinding to craft in-game assets like diamonds and armor. These items effectively served as in-game store of value. scarcity and utility, but their values ​​were not easily transferable to the real world. These items were not good mediums of exchange outside of their virtual world.

Historically, players have been constrained by the rules of siled metaverse platforms that lack interoperability with each other. Now, thanks to blockchain technologies like NFTs and cryptocurrencies, players are finally extract real world value from virtual assets.

Third-party marketplaces like OpenSea allow players to purchase Golfcraft clubs and purchase them themselves. It is only a matter of time before players can derive value and benefit from these clubs in meta-universes outside of Decentraland.

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*All investment/financial opinions expressed by NFT Plazas are taken from the personal research and experience of our site moderators and are intended as educational material only. Individuals are required to thoroughly research any product before making any investment.

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