WildWorks will soon announce we’re embarking on a new initiative in the blockchain-based gaming space.
If you told me a year ago I’d be typing that sentence EVER, I’d have rolled my eyes to the back of my head. Until recently, I believed not only that technologies like NFTs were irreconcilable with environmental conservation, they’re utterly bereft of any value to gamers. Two things have happened in this space over the past year that changed my outlook and set WildWorks on this path: the tech got (much) greener, and new innovations made it actually useful for gamers. I’ll explain, but first a bit of background.
I mined my first Bitcoin in early 2015. I had a little ASIC USB mining dongle that I plugged into the back of my computer, where it drew 2.5W or so and happily churned away at prime numbers alongside a growing global network of miners. I forgot about it and it stayed plugged in back there for a year, still connected to a wallet and unaware it had joined the long line of experiments I get excited about for a month or two and abandon when something else catches my eye. I have no idea how many coins it managed to mine in that time, because by the time I rediscovered it I’d long since forgotten the wallet password.
Fast forward a few years… Game Developers Conference 2018. The word “blockchain” was buzzing around every hotel lobby in a 6-block radius around Moscone.
“The blockchain is going to revolutionize gaming!”
“How does your project leverage the blockchain?”
“Our studio is totally reconfiguring around the blockchain!”
Nobody could explain how “blockchain” and “gaming” came together in a way that the first word couldn’t be replaced with either “database” or “payment method” with 100% accuracy. It was either a really slow way to save players’ data or a really inconvenient way to take players’ money, neither of which I thought gamers were really clamoring for. So I mentally categorized blockchain gaming with “BS people spread to get funding” and dismissed it. Just because blockchain technology is interesting doesn’t mean it applies everywhere.
Last year, some friends’ projects induced me to delve deeper into the current state of blockchain-driven gaming and the latest innovations in blockchains themselves. In the course of that research, I quickly became aware that there are intelligent, well-intentioned people who are vehemently opposed to all manifestations of cryptocurrency, especially NFTs. I wanted to understand their positions, so I read their forums and articles, asked questions on social media, and mulled over a lot of very thoughtful responses.
I distilled from these conversations a few objections to the use of crypto and NFTs that I believe merit closer examination, and I feel the players who’ve been a part of the online communities WildWorks creates deserve detailed answers to the questions raised by them. I attempt to address these arguments individually below, and I’ll add to this document in the future as new questions or counterpoints come up — and I hope they will. Despite my best efforts, I’m often wrong. I try very hard to remain teachable.
I’m going to save the most important question of all for last: WHY. Why are we embracing NFTs and a blockchain-driven game economy in our new game? If you’re just here for that answer, skip down a ways and save yourself some time.
Here we go:
NFTs are damaging to the environment because of the enormous energy consumption they require
I agree this is true of the dominant blockchain in the NFT space, Ethereum. Ethereum, like Bitcoin, depends on a “proof of work” system that requires ridiculous amounts of computing power to validate transactions, and consequently consumes ridiculous amounts of electricity to power, cool, and secure those computers. Most of that electricity is generated with fossil fuels, and the combined carbon footprint of Bitcoin and Ethereum exceeds that of many developed countries.
However, alternatives to Ethereum have emerged as NFT platforms over the past year and are rapidly gaining market share. Wax, Cardano, Solana, and others are iterating on “proof of stake” validation networks with vastly reduced energy consumption. In fact, transactions on these blockchains can be more efficient than the credit card networks we use to take payments in most of our games now. Coupled with WildWorks’ ongoing efforts to offset and reduce the carbon emissions of game development, we’re determined that our use of the Solana blockchain in our new game will not increase the company’s carbon footprint.
Ethereum is moving towards its own proof of stake validation system, but until that transition is complete and proven to be environmentally sustainable, our use of blockchains will be confined to technologies like Solana.
NFTs contribute to art theft
I have a collection of knock-off copies of games I worked on back in the 90’s, when games were mostly packaged and sold on CD-ROM. Inexpensive CD burners and hacked console encryption made it easy for criminals in other countries to copy our PC and Playstation games, package them to look legit, and sell them for whatever they wanted. It was infuriating, but the core of the problem wasn’t that CD burners had become accessible to everyone.
Art theft is wrong and sleazy and infuriating, and there’s no excuse at all for someone profiting off someone’s else’s work without their explicit permission. That’s not a problem that NFTs created, though — art thieves accept payment in Venmo, DeviantArt points, Patreon subscriptions, or any other medium of exchange.
Consider another area where creative theft is rampant: stand up comedy. Talentless hacks steal the material created by real comedians in their live shows, perform the stolen material on YouTube, then profit off the ad revenue from their channels. YouTube didn’t create that problem — amoral scrubs have always stolen other comics’ material and performed it for money. YouTube just made it much easier to scale the audience and payoff from that theft.
I think the contention here is analogous: that NFTs make it too easy to steal someone’s artwork, tokenize and sell it on an NFT marketplace, and get away with it because it’s too big a pain for indie artists to pursue the thieves. But the root of the problem isn’t NFT technology. It’s that some people suck and are willing to steal to make money, so we need laws and systems in place to protect against this and to catch the people doing it. Like YouTube, the NFT marketplaces are being forced to find ways to comply with takedown requests and deal with thieves using their systems to sell stolen art.
There’s unquestionably a lot of work still to be done in this area, but for me the solution isn’t to condemn NFTs and piously forswear their use. Artists can force this technology and these marketplaces to work for them.
They’ve had to do it with YouTube, SoundCloud, Twitter, podcast distributors, et al; and they’ll have to do it with every new technology that makes it easy for people to self-publish media. But fortunately for artists, the technology behind NFTs actually facilitates this sort of policing. The value of NFTs hinge on their authenticity. NFTs of artwork have no value if they’re known to be appropriated fakes. NFT marketplaces need to make it as easy for artists to submit legitimate takedown notices as they can on other platforms, and those marketplaces must remove the artist’s work and inform NFT purchasers of the fraud — thereby rendering them worthless. The incentives of NFT buyers, sellers, and artists are all naturally aligned against art thieves. This will force the policies and norms to catch up, and it’s already begun.
Artists can choose not to engage with the technology at all, of course. Many won’t, and I respect that choice. My purpose here is to explain why WildWorks has chosen to embrace crypto-gaming, and one reason is a conviction that new technologies can only be made to serve creators if they engage with them and contribute to solutions. So while I respect the choice of certain artists to stay away from NFTs, I don’t understand why some feel justified in condemning those who are trying to make the technology work for them.
Cryptocurrency facilitates money laundering
This is unfortunately true of several cryptocurrencies, and while regulators and law enforcement are making some progress in this arena, it’s not a problem that will ever be completely solved. It hasn’t been solved in the world of paper currency either. More potential solutions exist in the crypto arena than in old fashioned shady accounting, but critics are right to point out the problem remains. The ability to launder or hide money in crypto has democratized the practice, in fact, which before now was mostly the province of very wealthy people who could afford sophisticated accounting schemes.
I acknowledge that more needs to be done to balance privacy and accountability in cryptocurrency. It will never be perfect. Consider, though, that at least the problem is being engaged in crypto circles. Money laundering mechanisms in national currencies remain entrenched because they benefit many of the people who might be capable of fixing them.
Cryptocurrency is inherently insecure
Thousands of new crypto coins are being launched every day, most with little regard for security or scalability. When it comes to these “altcoins,” it would be fair to say that the majority are vulnerable to attack — if they’re not outright frauds already. But those altcoins are no more comparable to established currencies like Ethereum than arcade tokens are to silver dollars — including in the inherent security of their systems.
Not because an attack isn’t theoretically possible — it is. And for smaller altcoins, it’s repeatedly been proven feasible. Bitcoin Gold was famously attacked in 2018 and the perpetrators got away with $18M. But for well-established Proof of Stake currencies like Solana, Cardano, Polkadot, et al, where the attacker would have to command over half the validators on the blockchain, with no endgame other than destroying billions of dollars in their own stake… no, that risk is not sufficient to eschew the future of networked computing and money itself. When it comes to fraud risks inherent to monetary systems, consider this: per official estimates, more USD in counterfeit banknotes is currently in circulation than has been stolen in all documented validation takeover cryptocurrency attacks combined.
NFTs would ruin our existing game community
I agree. That’s why we decided to create a completely new game to explore our ideas around blockchain tech. Drawing upon the scaffolding of Feral, we are launching Cinder with an in-game economy designed from the ground up around player ownership of tokenized content. The Feral community deserves to evolve on its own path, and crypto-gaming isn’t what its members signed up for. Cinder draws upon visual elements and locations Feral players will recognize, but the resemblance ends there. Different universes developing in different directions.
Ok, WHY? Blockchain tech is a gimmick that contributes nothing to art / games / collectibles, so why waste time trying to put it into games?
I’ve always loved this phrase that Lane Merrifield described as a guiding principle when he and Lance Priebe built Club Penguin:
“If it doesn’t matter to a kid, it doesn’t matter.”
I try to think the same way about our games, and I’ve found it’s also a good litmus test for shiny new technologies that are supposed to revolutionize gaming. If it doesn’t matter to a player — if it doesn’t enable them to do or experience something cool they couldn’t before — it doesn’t matter. Until very recently, I had blockchain technology safely penned in that mental corral and it didn’t appear likely to jump the fence.
Until it did. Two things happened that changed my mind.
First, as already discussed, efficient Proof of Stake blockchains emerged that made the technology’s environmental impact comparable to other online payment networks. Before this happened, I felt blockchain tech wasn’t worth considering for games due to its carbon footprint.
Second… smart contracts and real game utility. I’ll explain.
I made the point earlier that many issues with NFTs parallel those that artists faced when YouTube and music streamers first launched. But the utility was more obvious then — after all, YouTube enabled anyone to start a TV channel and reach the whole world. Soundcloud enabled anyone to start a record label, also with global reach.
I see blockchains enabling the same sort of access and reach for game players.
Game creators will benefit too, but let’s focus on players for a moment. Consider a platform like Roblox. They provide a platform for users to make and distribute games, and in exchange for providing that platform, they take 75% of the revenue generated from their users’ work. They don’t create gameplay experiences themselves, they aren’t the ones whose creative output is actually engaging players, but they get 75% of what creators earn because they control the platform and own their users’ output. If I make a really cool avatar in Roblox and someone wants to buy it from me, I can’t sell it to them without the platform’s intervention. I can only make money from my creative output in the ways they permit, and their platform is the only place my work can be sold.
NFTs have the ability to totally flip the table and put control in the hands of players and creators.
I’ve always been blown away by the amazing avatars, Sanctuaries, Masterpieces, etc. that players create in Animal Jam and Feral. They have no ownership or control over them, though. They can’t prove they were the true originators of a cool new look. They can’t sell the things they create for real currency or trade outside the game. But what if they could?
If you’re really good at creating beautiful game avatars and want to sell them, you’ll be able to tokenize your creations in Cinder and sell or trade them at will. We’ll enable you to easily create smart service contracts on the blockchain, so you can hire yourself out as a designer of mini worlds, avatars, and other stuff. You’ll be able to prove that you were the original creator of your designs, and your ownership in many respects will extend outside the game world. You could even choose to receive ongoing royalties from your creations, even after you sell them. We will give players ownership over the creative contributions they make to the game world: that’s the essence of the “create-to-earn” economy of Cinder.
From the developer’s point of view, I can attest that theft of in-game items is a huge problem for all MMOs. Whether through hacking servers, stealing user passwords, or simply conning gullible players into bad trades, any game that enables item trading struggles with protecting players from bad actors. That’s a problem that blockchain technology can largely solve, however. If the origin and ownership of in-game items is tracked on a blockchain, item trades are infinitely more secure and they can be precisely tracked. Overall account security is vastly improved as well. Hackers can’t steal your inventory by guessing your login and 2FA info — they would have to gain control of your crypto wallet as well, which is much more difficult.
Provable ownership and control for players through tokenization. That’s the innovation made possible by blockchain smart contracts that convinced me the technology really can benefit gamers, and that the benefit is significant enough to make grappling with the problems of blockchains worthwhile. More benefits will emerge as the technology matures and becomes easier to use, but the exciting thing I see in the near term is a revolution in player-generated content. I hope that Cinder will be a leader of that revolution, and that we’ll contribute positively to the evolution of blockchains as they grow.
The Big Picture
I believe that cryptocurrency and decentralized finance have the potential to do a lot of good in the world. One example: basic banking services are always more expensive and less accessible for the poor, and foreign remittances are one aspect that cryptocurrency can completely upend. Remittances — the practice of expats sending money home to family members in less prosperous countries — accounts for $550 Billion in currency movement annually. Remittances comprise a significant percentage of GDP in countries like El Salvador, Kyrgyzstan, and Nepal. In Somalia they represent over a third of their GDP.
Those transfers are expensive and dangerous for the people making them, though. Companies like Western Union and Moneygram take advantage of desperate customers with exorbitant fees and exchange rate shenanigans that enable them to skim upwards of 10% from every transaction. Recipients must come to physical storefronts to receive their money, which become watering holes for criminals preying on the people forced to visit them and leave with cash.
Environmentally sustainable cryptocurrencies are immune to inflation in local economies, can be transferred instantly and safely between mobile phones with no intermediaries, and transaction fees are negligible: the full amount sent actually gets to the recipient. If all remittances were sent this way, savings of over $50 Billion per year would stay with the people who need it most.
That’s one example. Obviously there are many more; usurious middlemen and structural inequities seem to crowd every facet of currency movement.
However, I also acknowledge that most blockchain projects have hardly lived up to this potential. In fact, many are doing a lot of real damage, from greenhouse gas emissions to rampant scams and theft.
Yet condemning blockchain technologies wholesale in 2021 is like condemning the world wide web in 1995: yes, it must be conceded (then and now) that much of what’s on there is garbage. Yes, there are thieves and grifters and bad art, and it lacks regulatory guardrails. The VC valuations being thrown around are nuts and investors who can’t do technical diligence are going to get burned. And where’s the actual utility in all this? Or, as the question was being asked in 1995, why would anybody need an encyclopedia on this web thingy when you can just buy one in a bookstore?
25 years later, despite its many lingering defects, the utility of the web is self-evident. It has democratized information to a degree unimaginable when I entered high school. It hasn’t brought about the techno-utopia its biggest boosters were promising in 1995, though. It’s disrupted or destroyed entire industries, with very real costs to very real humans. But on the whole most serious people would agree that the net benefit to humanity of the web has been tremendous, and even those who disagree are using the web to do so.
25 years from now, blockchain tech will be as ubiquitous and enmeshed in our lives as the web is today. It too will disrupt or destroy entire industries (several of which, like banking, won’t be widely mourned). It will solve some of the lingering problems of the web, but it won’t bring about a techno-utopia. It could level the playing field for poor countries and marginalized people in many arenas though, and be a tremendous net benefit to humanity.
The ubiquity is coming whether or not we choose to be early adopters. We can seize the opportunity to make fairness, environmental protection, and security among the primary pillars supporting the growth of blockchain technologies, or we can shun crypto and everyone involved and hope it doesn’t all wind up controlled by morally bankrupt companies like Facebook.
I choose to engage, but I hope those of you who disagree with this decision will continue to share your thoughts with a presumption of good faith on both sides. Your concerns about cryptocurrencies and NFTs are legit. I share some of them myself, and I don’t know yet how they’ll all be resolved. But I’m confident WildWorks can contribute to those solutions better from the inside than the outside.