Comment by HeadsUpHigh | Hacker News Reader

Comment by HeadsUpHigh | Hacker News Reader

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>but in the particular case of just one game, the value of the token is linked to a single, central authority (the company producing the game) and implementing transactions on an open blockchain seems somewhat superfluous.

I don't understand your angle here. Instead of buying a game on steam, you buy a token. You convert e.g. a stablecoin to the game token and you can trade that token on the 2nd hand market later.

>Another aspect is that when the central authority is also the sole issuer of tokens, no counteracting forces exist to drive a meaningful market dynamic.No matter how much price pressure exists from users, the authority can always act to restrict issuance or increase issuance to force a particular price, and over the long term in the absence of that authority (due to bankruptcy, obsolescence, ..) the value of all issued tokens drifts towards zero.

That depends on the monetary policy for the token which might not be possible to change later on( at least in some blockchains it is set in stone for trust reasons). So you can't just arbitrarily print more or less unless you set it up in such a way in the first place which is transparent. Also I don't understand how the value of tokens drifts towards zero since they live IN THE BLOCKCHAIN and the smart contracts are working regardless of the gamedev existing or not. So you have a digital second hand market essentially.

> I don't understand how the value of tokens drifts towards zero

This is the software industry after all.

Take for example a multi-player game with purchasable trinkets. Player "invests" in a copy of the game at $50 and 20 trinkets originally costing $1 each. Platform the game is designed for becomes obsolete (say, an app targetting Windows 3.1 or Android 2.1), or the company goes bust and turns off the infrastructure supporting multiplayer functionality. Perhaps having issued all the tokens it can, the company simply loses interest in continuing to pay for that infrastructure.

What happens to the value of the issued tokens? Well we know what happens, much as we know what happened to the millions of 3.5" and 5.25" floppy disks containing licensed software written for Windows 3.1 that were manufactured in the 90s.

The only way to preserve the value of the "investment" is if the token is supported in perpetuity by a functioning market that must by necessity not be dependent on a single piece of software (game), OS platform, vendor or centralized authority of any sort.

Glad you understand!

You really don't understand the value proposition here. If a MP game goes defunct, as they do constantly the game will lose it's value, regardless if you bought it on steam or as a token on an NFT exchange. It doesn't matter. Same with any in-app purchases of items costumes or whatever. NFTs for games aren't trying to provide you will value in perpetuity.

So then what is the point of doing it via NFT? If all value is tied to the behaviour of a single central counterparty, the use of NFT is utterly redundant.

I understand this may come as a shock, but the entire point of blockchains is to solve a specific detail in the original Bitcoin design - mutual agreement on the content of a distributed linearized log in the absence of any authority. For almost every application where centralization (indirect or otherwise) continues to exist, they are deeply inefficient from a technical perspective and suffer from deep usability issues from a user perspective. So you end up with the majority of the userbase thinking they're "doing blockchain" but their only experience of it is some centralized eBay for JPEG clone site who also happen to be managing their wallet, in order to trade tokens tied to an asset (in this case) dependent on the future viability of yet another central counterparty (the game producer). This is called snake oil.

Where is the value?

The value is in reselling the game when you are done with it. Instead of buying it on steam and then being stuck with it, you resell your token( which is the equivalent of having bought the game on steam) to the 2nd hand market. Same as you did with old games but digital.

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