NFTs: Forget apes and penguins — Let’s talk diapers, hardware and museums

Though the likes of Bored Apes and Pudgy Penguins take the headlines, and the potential for decentralized finance (DeFi) and play-to-earn gaming is undeniably grand and exciting, the marketing potential for nonfungible tokens (NFTs) deserves equal attention. It boils down to this: With NFTs, virtually anything can be gamified to promote desired marketing outcomes.

Gamification — defined by Gabe Zichermann, author of The Gamification Revolution, as a “process of using game thinking and game dynamics to engage audiences and solve problems” — is not new to sales and marketing. What is new are the mechanisms by which you can engage and motivate prospects and customers. And, gosh, they are exciting. To illustrate the point, here are five example use-cases of NFTs for marketers.

Co-marketing to in-market segments

Let’s say you’re one of the approximately 40 million people in the United States who move each year. As a “new mover,” you are highly coveted by a slew of brands that are keen to meet your highly-predictable needs.

In the past, if Sherwin Williams (paint), Simplisafe (home security), Spectrum (cable), Stanley Black & Decker (hardware), Sony (electronics) and Pottery Barn (furniture) wanted to get together as one to market to you at your time of abundant need, it would be virtually impossible. After all, differing internal systems, an entrenched hesitancy to share data, dissimilar promotional structures and loyalty program designs, overlapping points of distribution and other roadblocks invariably create insurmountable gridlock.

Now, imagine those brands teaming together to create a Move Me NFT or something similar. Consumers purchasing these would create revenue for all the participating brands and put our New Mover into a virtual community where they can tour neighborhoods, attend a house-warming party in the Metaverse with a celebrity, enter to win digital real estate, hang their digital art and, of course, learn about how each brands’ products/services can help them along with an “exclusive and generous” discount.

Moreover, you could offer our hyper-coveting consumer Bitcoin (BTC), Ether (ETH) or other coin rewards as incentives for buying from two or more of the Move Me brands — funded from the NFT revenue pool or contributions from the program participants on a relative scale.

Name your segment: The possibilities are virtually endless.

Related: Why are major global brands experimenting with NFTs in the Metaverse?

Cross-brand loyalty marketing

Suppose you’re a brand with multiple consumer packaged goods (CPGs) products in your portfolios such as diapers, detergent, oral care, over-the-counter medicines and skincare. Your goal: To create a mechanism for rewarding customers for buying across your portfolio, more of the time.

Most attempts at something like this in the past have been colossal failures. The combination of a burdensome proof-of-purchase mechanism and lack of a truly behaviorally-motivational cross-currency have doomed the efforts.

But, what if their customers could create a My [insert brand name here] wallet and link it to their store cards such as Food Lion’s MVP Program, Kroger Plus or CVS ExtraCare, for example. Now, proof-of-purchase can be effortless cross-brand. Armed with transaction data and a broader customer profile, any of the participating brands can airdrop NFT rewards (an offer to add their newborn’s picture to collectible art, for instance), metaverse experiences and even currency. Even the retailer can get in on the action.

While getting small sums back in fiat currency or dollars-off a future purchase can be traditionally underwhelming for the effort of engaging, the addition of crypto with its swapability and potential to accumulate value can become a true game-changer. Think value perception.

Related: The biggest consumer brands that engaged with crypto in 2021

Experiential marketing

Imagine this: You’re home on your computer in Manchester dreaming of a trip to Manhattan. So, you take a virtual tour of the city’s iconic destinations and also visit specific stores, restaurants, clubs, theaters and more that are promoted within the tour in an effort to have you add them to your itinerary.

As you visit each destination, you can collect NFTs, which could serve as digital souvenirs to dial up the excitement for your trip while also gaining you priority access, unique experiences, special offers and more.

Let’s say you’ve added the Museum of Modern Art to your itinerary. Your NFT could get you access to an exclusive auction of NFTs of iconic NYC art and perhaps even entry to a “hidden exhibit” at the museum. Oh, and crypto opens up a whole new fundraising mechanism for nonprofits like MOMA.

Show your NFT to the restaurants on your list and you get a surprise amuse-bouche or the opportunity to order a “hidden” menu item. I could go on and on. The opportunities to promote tourism are vast.

New product launches

Now, consider the automobile manufacturer that has no issues connecting with someone who’s in-market for a new car, as they’re already everywhere this customer is searching, but has a much higher hill to climb in exciting existing customers not in-market to upgrade to a significant model-year update.

If that manufacturer, however, nurtures its community of customers to express its shared passion for the brand, affinity to their current product and the binding interest and excitement of NFTs, all that can change.

Picture a dynamic NFT drop to this community that teases the new model at first, then adds additional looks and features over a set time period to drive engagement. At each juncture, there are additional opportunities to see a virtual demonstration of those features and, of course, request a test drive.

At the dealership, the NFT brings with it “exclusive offers” and, based on content the consumer has watched, enables the dealer to provide a more focused and customized test drive experience. And, of course, the NFT becomes a collectible — particularly if the customer chooses to actually purchase the product.

Team-building for sales

When it comes to the annual sales kickoff meeting, what can be more underwhelming than a “Steve Balmeresque” speech that goes off the rails, interminable stock-photo littered slide decks and talks of meeting an annual “stretch” target which is, in actuality, a euphemism for lotsa luck buddy.

Now, imagine every member of your team selecting from a gallery of NFTs the one that they think embodies their approach to driving success in the upcoming year. Then, having members choose (or be chosen on) teams based on their likemindedness or compatibility.

Teams could be revealed at your kickoff meeting (live or virtual). Each team would then be given a series of challenges designed to immerse themselves in the strategy that has been set and the dynamics of their marketplace, among others. These, along with meeting set goals baked into smart contracts, could reward members with crypto, other NFTs, or any other “currency” you want to consider. And, the NFTs themselves become badges of achievement with varying degrees of rarity.

Related: We haven’t even begun to tap into the potential of NFTs

The concept can be taken further by making it evergreen, allowing trading, making airdrop “bonuses” and more. To see another example of the concept in action, check out what Enjin did for Microsoft to engage its developer community.

But, first things first

Technology and consumer adoption are still in their relative infancy, of course. But, things are moving very fast, driven by huge injections of investment capital, a literal “land grab” among major players and the transcendent powers of FOMO.

In the meantime, a massive consumer education campaign supported by the entire industry is in order. Not just in how to buy, sell and exchange crypto and NFTs, but – perhaps more importantly – how to do so safely. Because, let’s face it: if you think the scams, phishing, hacking and other nefarious actors are sophisticated and evil now (and they are) it’s only going to get worse the more mainstream the multiverse becomes.

Yes, fortune favors the brave. But, let’s face it, trust and confidence are essential pillars of possibility.

So, the next time you shrug off as “insane” that a Beeple collage sold for $69.3 million, think instead of what the technology holds for the future. Think big. Test aggressively. And, educate, educate, educate.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Rich Feldman currently leads marketing for Finario, an enterprise capital planning SaaS provider. Prior, he was chief marketing officer at PrimaHealth Credit and was an agency owner/partner and chief strategy officer at Doner CX (part of the MDC Partners Network), where he led the CRM, analytics, digital media and other strategic areas of the business. Rich has lectured on strategy at the New York University Master’s Program in marketing, at Syracuse University and is an adjunct professor at Western Connecticut University — where he is an advisery board member of the Ancell School of Business. He is also the author of the book, Deconstructing Creative Strategy.

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BTC price falls to $34K as Bitcoin RSI reaches most ‘oversold’ since March 2020 crash

Bitcoin (BTC) refused to stem recent losses during Jan. 22 as predictions of a flight to $33,000 and lower looked increasingly likely to become a reality.

BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView.

Open interest “still not flushed”

Data from Cointelegraph Markets Pro and TradingView followed BTC/USD as it fell through $35,000 during the first half of Saturday.

With few silver linings available for the bulls, lower weekend volume was poised to deliver some classic erratic moves after Bitcoin lost $40,000 support on Friday.

While some, including El Salvador, made the most of the new lower levels, others voiced concern that despite the drop, pressure still remained on bulls.

“Crazy part is open interest still hasn’t flushed,” trader and analyst William Clemente summarized, one of many market participants noting that derivatives traders are still attempting to fight the trend.

“After all this carnage and absolute state of panic funding somehow isn’t giga negative, futs aren’t backwarded and OI barely went down. Interesting times. And with ‘interesting’ I mean poverty,” popular Twitter account Byzantine General additionally quipped.

Bitcoin futures funding rates chart (Binance). Source: Coinglass.

RSI sinks towards March 2020 COVID lows

A source of slight relief came in the form of Bitcoin’s relative strength index (RSI) on the day, this dipping to its lowest levels since March 2020.

Related: Here’s 3 ways the relative strength index (RSI) can be used as a sell signal

At that time, BTC/USD crashed to $3,600 before staging a comeback that would last well into the following year.

Daily RSI stood at just 20 Saturday, already well below even the classic “oversold” zone.

BTC/USD 1-day candle chart (Bitstamp) with RSI. Source: TradingView.

“A bit more reliable than Bitcoin alone -> total market capitalization is at next level of support, while the daily RSI hits the lowest level since March 2020,” Cointelegraph contributor Michaël van de Poppe commented on the situation.

“Equities sentiment is also on the lowest level since March 2020. Says it all.”

Equities markets had taken a hit towards the end of the week, with tech stocks particularly in the line of fire and crypto once again showing the extent of its positive correlation.

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How to use UniSwap: A step-by-step beginner’s guide

The Uniswap decentralized exchange (DEX) is the most popular DEX built on the Ethereum blockchain. For users wondering, “What is Uniswap?,” this article provides an overview of what it is and how it works as well as several ways users can get started using the Uniswap DEX.

With Uniswap, users can swap crypto tokens without having to rely on an intermediary. Not having to rely on a third party leads to next to no economic rents being collected. Instead, Uniswap relies on smart contracts to execute trades. Smart contracts are algorithms that self-execute once certain preset conditions are met.

How does Uniswap work?

Because Uniswap is an open-source protocol, many DEXs with the suffix “swap” have been released into the market. These protocols are essentially copies of the original Uniswap source code. Where they differ is in the graphical user interface (GUI) as well as in offer differentiation and positioning.

The most famous—and most controversial—of these copycats is Sushiswap. Upon copying Uniswap’s source code, it proceeded to launch a vampire attack. A vampire attack is where a DeFi protocol offers various incentives to liquidity providers. A vampire attack aims to draw liquidity away from the target protocol.

How did Sushiswap achieve a successful vampire attack? The platform launched an aggressive marketing campaign. They also made it easy for Uniswap liquidity providers to switch over. Finally, they offered insanely lucrative rewards to make it worth their while.

Another less controversial example is Pancakeswap. This DEX lives on the Binance Smart Chain. Pancakeswap offers nonfungible tokens (NFTs) and provides yield farming opportunities, which Uniswap does not.

Uniswap, though, is the first DEX to rely on an automated market maker (AMM) model, rejecting the traditional open book model. The open book model is not as DEX-friendly due to, among other factors, liquidity issues. In contrast, the AMM model uses a liquidity pool with a constant product market maker model, and thus relies on the Constant Product Formula:

It’s worth noting that in version 1 or v1 of Uniswap, liquidity pool providers were at risk of impermanent loss. In other words, it’s best to view v1 as a minimum viable product that was released for beta (or even alpha) testing.

With each iteration, Uniswap presented considerable improvements for users. For instance, v2 introduced oracles and airdropped UNI tokens. UNI tokens are the official governance token of the Uniswap DEX. Uniswap users received these airdropped tokens if they used the platform before September 2020.

For v3, the most notable improvement came in the form of concentrated liquidity. This novel form of liquidity allowed liquidity providers to set the conditions for which they would receive their fees.

Moreover, v3 of Uniswap was released on the Optimistic Ethereum network. Optimism is a layer two scaling solution that is vastly superior to Ethereum’s layer one. Its major benefits include reduced slippage and high gas fees as well as near-instant transaction speeds.

So how do you buy coins at Uniswap? Before diving into how to use Uniswap, it’s important to answer the question: Is it safe to use Uniswap? Are smart contracts, blockchain technology and Decentralized Finance (DeFi) secure? These are the technologies Uniswap is built on.

The Ethereum blockchain is extremely secure, unless there are vulnerabilities open for exploitation. For instance, Uniswap suffered a bug exploit in the past with a reentrancy attack, but the bug has since been addressed (thus making Uniswap stronger in the long run). And since then, liquidity and trading volume have only surged, and considerably so.

Now let’s take a look at how people can use the platform.

How to use Uniswap?

Users who want to learn how to trade on Uniswap have many options at their disposal. This section covers how to use Uniswap with mobile and the Trust Wallet as well as the Coinbase wallet.

But first, the steps on how to use the Uniswap protocol with Metamask are discussed. Afterward, this section presents the steps for the two-mobile friendly approaches.

Keep in mind, Metamask is just as user-friendly on mobile. Yet, as a web wallet that functions as a browser extension, its usability experience is impeccable on Desktop, with next to no competitors. This is the reason why, for Metamask, this article focuses on the desktop experience.

How to use Uniswap with Metamask?

Steps to use Uniswap with Metamask are listed in the figure below:

How to use Uniswap with Coinbase?

The Coinbase approach might be less intimidating for U.S. citizens who are already familiar with the platform. First-time users should start the steps below after successfully opening a Coinbase account. Those who already have an account can start with Step 1.

How to use Uniswap with Trust Wallet?

Trust Wallet is one of the most popular mobile wallets, and there’s a reason for that. Trust Wallet is easy to use, friendly and offers a range of tools for users. Below are the steps for using Uniswap with Trust Wallet.

One critical deterrent for new Uniswap users is the exorbitant Uniswap fees. Because Uniswap lives on the Ethereum blockchain, it relies on ETH for gas fees. Due to Ethereum’s design, greater congestion leads to higher gas fees because it fuels a bidding war between users competing to have their transactions inserted first into the next block.

To circumvent failed transactions, please consider going into the Settings on Uniswap. (Users can do so by clicking the gear icon.) Before executing a transaction, users should adjust the slippage tolerance to roughly 12%.

The slippage tolerance is simply the difference in price from when a transfer is confirmed to the price sellers are willing to accept. Adjusting slippage tolerance ensures that user transactions will be front run. Front running increases the chances that the transaction will be included in the next block.

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NFTs and DeFi overturn a banker’s generational curse of poverty in 2 years

Brenda Gentry, a former USAA mortgage underwriter from Texas, believes that the cryptocurrency ecosystem offers a fighting chance to overcome the generational curse of poverty. 

Gentry, a.k.a. MsCryptoMom, left her decade-long job as a banker to pursue a full-time crypto career as her initial investments from early 2020 confirmed the “unprecedented opportunities offered by crypto.” She currently runs Gentry Media Productions, a firm that advises decentralized finance (DeFi) and nonfungible token (NFT) projects — generating up to 20 ether (ETH) each month, nearly $50,000 at the time of writing.

Speaking to Cointelegraph, Gentry recollected the moment she first bought crypto:

“It was early 2020 during the lockdown. I bought Bitcoin, Ethereum and Link on Coinbase. When I started, I almost gave up multiple times. I just want to help others have a more streamlined way to get into crypto.”

With this early investment, Gentry also dedicated her time to learning about DeFi, which eventually led her to invest in altcoins. Acknowledging the big learning curve into crypto, the entrepreneur provides educational content through her website, adding:

“I’m also hosting seminars to educate the general public about navigating in this space and things to look out for when searching for good NFT projects or DeFi tokens, and also how to quickly detect scams or rug pulls.”

Gentry’s younger daughter and business partner Imani told Cointelegraph about the rising interest in crypto within her friend circle. She said:

“A trend that was interesting for me to watch was people following trends — every one making their own projects & 10k collections because they saw the outcome.”

What may come as a surprise to many, Gentry did not have a Plan B, but only the moral support of her family, before committing to restart her career as the new owner of Bundlesbets, a DeFi platform dedicated to sports betting. “My husband and daughters encouraged me to pursue my dreams full time and I’m happy I did,” she added.

“I don’t want anyone to be left behind.” Giving back to the community, Gentry intends to help accelerate breaking down the generational curses of poverty around the world. This year, she plans to visit her home country Kenya and equip her nonprofit organization Educate a Child “with knowledge about this new asset class and the opportunities that blockchain technology affords.”

For people wanting to follow suit, Gentry advises researching this space first before jumping in. According to her, one must understand the bad side of crypto to avoid getting scammed, a concern most relevant for new investors:

“When it comes to investing in crypto, the opportunity to gain financial freedom is well worth the cost to watch a few educational crypto YouTube videos or read a book on this topic.”

The 19-year-old Imani believes that crypto will be the future reality. Addressing the younger generation, she concluded:

“Take time to learn and get involved in the space, and even teach your parents, siblings and others, as blockchain technology and cryptocurrencies are disruptive technologies that will require a major paradigm shift in the way we currently think about centralized finance and fiat money.”

Related: An Indonesian 22-year-old makes $1M by selling NFT selfies on OpenSea

Sultan Gustaf Al Ghozali, an Indonesian college student, reportedly made a million dollars by selling NFT versions of his selfies on the OpenSea NFT marketplace.

As Cointelegraph reported, some of Ghozali’s selfie NFTs sold for 0.9 ETH, worth roughly $3,000. Ghozali’s collection subsequently reached a total trade volume of 317 ETH, equivalent to more than $1 million.

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El Salvador buys its cheapest 410 Bitcoin as prices reach $36k

The Central American country of El Salvador has added 410 Bitcoin (BTC) to its central reserve as BTC prices trade below $37,000, a price last seen on July 26th, 2021. 

The fresh addition to El Salvador’s BTC reserve was announced by President Nayib Bukele, who confirmed that the purchase of 410 BTC was made against $15 million, placing the price at approximately $36,585 per BTC.

El Salvador adopted BTC as a legal tender on Sept. 7, 2021, as a means to overcome catastrophic inflation amid the weakening spending power of the nation. Fast forward to today, the country has strategically accumulated 1,801 BTC over the past four months, especially when the market sees a momentary price fall.

The latest purchase is currently the cheapest acquisition for El Salvador ever since the country adopted BTC as a legal tender.

With BTC trading just above the $36,000 mark and the resultant sell-off, Bukele believes that “some guys are selling really cheap,” supporting his long-term vision of mainstream Bitcoin adoption.

Bitcoin price movement. Source: TradingView.

As evidenced above by data from Cointelegraph Markets Pro and TradingView, BTC experienced a steady rise in prices from mid-July, which resulted in an all-time high of almost $69k in the first week of November. However, the next three months saw a steep decline in market prices as investors redirected BTC profits into buying other tokens.

Related: Nations to adopt Bitcoin, crypto users to reach 1B by 2023: Report

A new report from Crypto.com predicts that the global crypto market will host one billion users by the end of 2022 as more developing nations mimic El Salvador’s move to mainstream BTC adoption.

Monthly growth of crypto owners. Source: Crypto.com.

As Cointelegraph reported, Crypto.com estimates that “If we extrapolate a similar rate of increase in 2022, we are on track to reach 1 billion crypto users by the end of 2022.” The report concludes that a combination of developing nations following El Salvador and a “friendlier stance” towards the crypto industry means that “nations can no longer afford to ignore the growing push towards crypto by the public.”

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Blockchain and the evolution of business models in the game industry

The first computer games were developed in the late 20th century with the sole purpose of entertaining their audience. One of the first goals was to distract players from their routine work and provide them access to a fantasy world. Very soon, games began to compete for users’ time against traditional forms of entertainment, such as movies, circuses, theater performances, zoos, etc.

Planet Earth entered the new millennium with a population of over 6 billion people, and the forecast is that this number will reach 8 billion as early as 2023. If we assume that computer games will cease to be an alternative to work and become complementary to it, there will be 4 billion gamers in the world by then.

Not surprisingly, the traditional boundaries between games, media, sports and communication are rapidly disappearing, creating new business partnerships and causing more and more mergers and acquisitions around the world.

The still-active virtual world Second Life, which represented a first attempt at a portal to the metaverse with its own in-platform virtual currency, was an important example of this process between 2003 and 2006, during its most rapid period of growth. Players in many countries quit their jobs and dedicated 100% of their time to the virtual world.

But why is the use of blockchain in games causing a real revolution in the gaming industry? That is what this article seeks to answer.

The gaming markets

According to data from mid-2021, there were 3.2 billion people playing computer games, and as a report by Newzoo states, the global gaming revenues in 2021 were about $180.3 billion — 20% more than before the pandemic began in 2019.

Digital distribution channels are responsible for most of this revenue. Mobile games act as the main growth engine for the games industry, driving this segment to $93.2 billion dollars.

The game development industry has experienced a profound transformation over the past five years. With the emergence of mobile app stores and digital distribution platforms, even smaller studios have gained the ability to create games for the global market.

China remains the largest regional segment in terms of both revenue and number of players, accounting for more than a quarter of all sales. The Asia-Pacific region as a whole holds 55% of all players and offers the highest profits and fastest growth rates.

The introduction of new technologies, such as artificial intelligence (AI), virtual reality (VR) and blockchain, has become a major trend in the market. In recent years, numerous blockchain-enabled gaming apps and services have emerged, and the number of such projects promises to cause a boom in the market by 2022.

The evolution of business models in the games industry

Pay-to-play (P2P) model

From the 1970s until the 2000s, the most prevalent business model for the games industry was “pay-to-play.” In this model, development studios and publishers generate revenue from initial game sales and, in some cases, subscriptions. Collaborations with advertisers for in-game ads were few and far between.

In this model, players have little or no opportunity to extract value from games, except the satisfaction and enjoyment gained from the in-game experience.

Free-to-play (F2P) model

In the late 2000s and early 2010s, the “free-to-play” gaming model gained traction. This model was once considered a disastrous business model that would, at best, bring in lower revenues for a given game and, at worst, cannibalize the entire gaming industry. However, it has instead proven to be the best way to monetize, as well as being a main reason behind the cultural rise of games.

In the free-to-play model, games are offered to players at no upfront cost. In this type of model, in-game purchases (items and upgrades that improve features in the game) and ads make up the vast majority of the publishing studios’ revenues. Streaming and esports services act as monetization levers for players, while allowing “elite” players to receive rewards.

A perfect example of how some of these free-to-play business models have become successful is Fortnite. The game, launched in July 2017, generated over $5 billion in revenue in its first year of production. In addition, its userbase climbed to approximately 80 million monthly active users in 2018.

Play-to-earn (P2E) model

The “play-to-earn” model is exactly what the name suggests: A model where users can play and earn tokens or crypto while playing. This model has a very powerful psychological incentive, because it combines two activities that have driven humanity since the beginning of time: reward and entertainment.

The main idea in P2E is that players are rewarded as they invest more time and more effort in the game, and thus become part of the in-game economy (tokenomics), creating value for themselves, for other participants in the game ecosystem, and also for the developers. They receive an incentive/reward for their participation and playing time in the form of digital assets with potential appreciation over time.

Note that the use of blockchain technology in such assets has brought scarcity to digital assets in games, which can take the form of NFTs and can represent absolutely anything from characters like the kittens in CryptoKitties to cryptocurrencies like Bitcoin (BTC) or Ether (ETH).

Related: The Metaverse, play-to-earn and the new economic model of gaming

Along these lines, the key component in this model is to give players “ownership” over certain “digital assets” in the game, allowing them to increase their value by actively participating. This is where blockchain technology has become decisive for gaming business models.

Many concepts come from traditional games

The blockchain-based gaming industry is still in its early stages and it is still centered around many concepts coming from traditional gaming. NBA Top Shot, for example, is building on the “collect and trade model” that has prevailed in baseball cards and other collectibles for decades.

Axie Infinity, currently the most famous blockchain-based game, uses the “breed and battle” game model that Pokémon launched in the 1990s.

Related: How blockchain technology might bring triple-A games to metaverses

Sorare, on the other hand, a game in which players buy and trade soccer cards and build competing soccer teams, is based on the “recruit and compete” model. Similarly, virtual worlds like Decentraland and Somnium Space are immersing people in alternative realities, like Second Life and The Sims before them.

Thus, although many games that use blockchain technology (such as The Sandbox, Gods Unchained and Star Atlas) often fall into the same categories as games that do not use such technology, the most important feature that distinguishes them from their counterparts in the traditional market is the use of blockchain-based cryptocurrency support.

Overview of blockchain gaming

Advantages of blockchain games for players

With the introduction of blockchain technology, native game assets go to global, non-permitted blockchain platforms, rather than being tied up and locked in the particular game’s platform or in local environments controlled by video game development companies. We’ve talked about this before, when we covered the role of blockchain in NFTs in this column.

Here, it is important to highlight how blockchain technology has enabled digital assets, such as nonfungible tokens, to be interoperable and immediately viewable across dozens of different wallet providers, tradable on other gaming platforms and required in various virtual worlds of the Metaverse. And interoperability, in turn, has extended the negotiability of digital assets by enabling their free trade on other gaming platforms, thanks to blockchain technology. This puts users in direct ownership of their in-game items, giving them full and irrevocable control over their use.

That is, blockchain game players can access NFT marketplaces and crypto-active brokers and extract value from their in-game experiences by buying and trading digital assets obtained in games, 24/7, globally. In addition, tokenization of in-game assets opens up numerous other opportunities.

Related: Ready Player Earn: Where NFT gaming and the virtual economy coincide

The decentralized finance marketplace is a place where some players can put their acquired in-game assets to yield. Platforms like Yield Guild Games facilitate, for example, the lending and borrowing activities of in-game assets, so that players who do not have the initial capital needed to purchase in-game items can, through DeFi, participate in a given game by ceding a portion of the monetization and their earnings to “in-game item lenders.”

The advantage of blockchain games for developers

In addition to increasing monetization opportunities for gamers, the use of blockchain-based assets can also be beneficial for game developers.

Under the current structure of in-game item exchange, the practice known as “gold mining” has become prevalent. Gold mining involves players selling accounts or game “coins” on dark markets or over-the-counter markets, limiting secondary market monetization opportunities for developers and making players vulnerable to fraud.

With the expansion of marketplaces for digital assets obtained in blockchain games, developers can obtain information about the trading volumes of these assets and encode royalties into NFTs, so that with each subsequent sale, they receive a portion of the sale price as a royalty fee. This represents a real evolution in the way intellectual property and copyrights are thought of in the digital world.

The game industry and the property dispute

Games that use blockchain are fundamentally different from traditional games because of the way they approach ownership. Blockchain games give players full control over the digital assets they earn or acquire through their participation in the games.

In traditional games, even though players pay real money for their digital assets, they can no longer access them if the server is down. That is, in traditional games, the money and assets remain the property of the publisher or developer.

Ultimately, blockchain game players retain full ownership of their digital assets, allowing them to trade them freely with other players, sell them for real money, and potentially use them in other games or virtual worlds in the Metaverse.

Related: Nonfungible tokens from a legal perspective

The trend in the games industry is towards the adoption of blockchain in games as a path of no return, and at the moment, the P2E model is the driver of this adoption. However, over time, the use of blockchain in games will likely span a variety of use cases beyond the play-to-earn model. This is because the technology enables a myriad of combinations and incentives.

Against this backdrop, it’s no wonder that, in the last four months alone, hundreds of millions of dollars have flowed into blockchain or NFT-centric games, with investors allocating large amounts of funds to startups that, in turn, are looking for expert developers to build their teams.

Parallel to this, governments are already considering taxing the profits made by the more than two million players of Axie Infinity, currently the most popular game on blockchain and using the P2E model.

What about you? Would you invest your time to compete and be rewarded with digital assets in a game, including it as work experience on your resume?

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Tatiana Revoredo is a founding member of the Oxford Blockchain Foundation and is a strategist in blockchain at Saïd Business School at the University of Oxford. Additionally, she is an expert in blockchain business applications at the Massachusetts Institute of Technology and is the chief strategy officer of The Global Strategy. Tatiana has been invited by the European Parliament to the Intercontinental Blockchain Conference and was invited by the Brazilian parliament to the public hearing on Bill 2303/2015. She is the author of two books: Blockchain: Tudo O Que Você Precisa Saber and Cryptocurrencies in the International Scenario: What Is the Position of Central Banks, Governments and Authorities About Cryptocurrencies?

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Altcoin Roundup: 3 emerging P2E gaming trends to keep an eye on in 2022

Blockchain-based play-to-earn (P2E) gaming had a breakout year in 2021, and as the cryptocurrency ecosystem evolves in 2022, the P2E gaming sector and those that invest in it will need to consider what the next steps are. During bull markets, vaporware, speculation and euphoria can lead to unrealistic valuations and expectations, and this appears to also have impacted the P2E sector.

Now that the hype is “over,” investors and developers will need to identify new value propositions that catalyze growth and steady investment into the blockchain gaming sector.

Here’s a closer look at some of the trends that could emerge in the P2E ecosystem in 2022.

Profit-sharing communities

The first trend to keep an eye on in 2022 is projects that are looking to harness interest in nonfungible tokens to create profit-sharing models and capitalize on the price appreciation of NFTs.

These projects aim to offer opportunities for gamers and investors by providing a platform where investors who are not interested in playing games can invest and provide NFTs for players who would not otherwise be able to afford them.

From there, players earn rewards for their gameplay, while investors earn a share of the profits.

One example of this type of protocol is Yield Guild Games (YGG), a P2E gaming guild and decentralized autonomous organization focused on creating a community that lets players earn via blockchain-based economies.

The DAO generates revenue through the sale of NFT assets or by renting them out to gamers as part of a profit-sharing model known as a scholarship.

Some of the current games and investments that YGG is involved with include Axie Infinity, Illuvium, Guild of Guardians, Star Atlas, Splinterlands and The Sandbox.

The most recent investment for the YGG community was a $50,000 investment in the seed round of Heroes of Mavia and a $330,000 purchase of NFT land assets in the game.

Communities with educational support

Another trend emerging out of the gaming and NFT sectors are communities that focus on educating community members on how to earn money through gameplay.

Blockchain-based gaming can be a challenge for newcomers to learn, and some games have upfront costs that prevent some players from being able to play.

To help simplify the process, a few protocols that invest in providing apprenticeships for players have come into existence. Merit Circle is a DAO project focused on developing its P2E economy by helping gamers transform their hobby into a steady stream of income.

At the time of writing, the Merit Circle community has 2,750 active gamers from regions all around the world — including Asia, Africa, Europe and South America — who earn rewards daily by playing one of the supported games.

Similar to YGG, Merit Circle also invests in community-held assets that can be used by gamers to earn rewards, with 30% of all proceeds being reinvested in the DAO or distributed to tokenholders.

The project uses educational content and one-on-one coaching sessions to help improve the performance of scholars on the platform. These players have earned more than $2 million through gameplay to date.

Related: New research expects a gloomy year for Bitcoin as DeFi and DAOs rise

DeFi combines with NFTs and P2E gaming

A third trend forming in 2022 is the development of projects and investment funds that aim to combine aspects of decentralized finance (DeFi), NFTs and P2E gaming.

While the gaming sector only appeals to a niche crowd, NFTs have a wide range of capabilities that can be applied to many fields ranging from art to real estate by providing immutable proof of ownership.

As blockchain technology continues on its path to mass adoption, an increasing number of real-world items will be digitally recorded on distributed ledgers, ultimately providing interested parties with an easier route to investment than exists at present.

It also allows for the possibility of fractionally owning certain high-price items such as a hotel or the copyright to a popular movie or music album.

BlackPool is one such project that is currently run by a team of portfolio managers, traders and analysts with the long-term goal of becoming “a leading provider of financial derivatives in digital asset marketplaces, including asset valuation indexes, insurance mechanisms and actively managed strategies.”

Ultimately, the project is looking to provide democratized access to scarce NFT assets “that users might individually not be able to buy themselves.”

Through the development of its DAO structure, BlackPool is now in the process of decentralizing its current operation to allow all of the NFT assets held by the fund to be managed by its community of token holders.

Want more information about trading and investing in crypto markets?

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

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The life cycle of smart contracts in the blockchain ecosystem

The formation of a smart contract, freezing of the smart contract, execution of the smart contract and finalization of the smart contract are the four significant steps of a smart contract’s life cycle. It is different from the blockchain development life cycle, which begins with defining the issue you want to resolve with your blockchain product and ends with a minimum viable product.

Phases in the life cycle of smart contracts

Create

Iterative contract negotiation and an implementation phase make up the creation phase. First, the parties must agree on the contract’s overall content and goals. This is similar to traditional contract negotiations and can be done online or offline. On the underlying ledger platform, all participants must have a wallet. Its identifier is pseudonymous in most circumstances, and it is used to identify the parties and transfer payments.

The contract must be converted into code after the objectives and content have been agreed upon. The expressiveness of the underlying smart contract coding language limits the contract’s codification. Most smart contract systems provide the infrastructure to build, maintain and test smart contracts to validate their execution behavior and content.

The transition of requirements into code, as seen in traditional programming languages, necessitates multiple iterations between stakeholders and programmers. Smart contracts will be no different, and several iterations between the negotiation and implementation phases are likely.

During the publication phase, after the parties have agreed on the codified form of the contract, it is uploaded to the distributed ledger. During this phase, nodes in the distributed ledger receive the contract as part of a transaction block. The contract is available for execution once most nodes have confirmed the block. Because decentralized smart contracts cannot be amended once the blockchain has accepted them, any changes to the smart contract will necessitate the development of a new one.

Although a smart contract is placed on the blockchain, this fact alone should not be interpreted as a party’s agreement to enter the contract, as anyone can submit a smart contract to the blockchain, implying an obligation for any random wallet owner. Similarly, decentralized smart contracts can benefit any blockchain participant, whether or not they choose to receive the benefits in advance.

Freeze

Following its submission to the blockchain, the smart contract is confirmed by a majority of the participating nodes. A price must be paid to the miners in exchange for this service to keep the ecosystem from being flooded with smart contracts.

The contract and its parties are now open to the public and available through the public ledger. During the freeze phase, any transfers to the smart contract’s wallet address are blocked, and the nodes operate as a governance board, verifying that the contract’s preconditions for execution are met.

Execute

Participating nodes read contracts that are stored on the distributed ledger. So, how is a smart contract executed? The contract’s integrity is verified, and the code is executed by the smart contract environment’s inference engine (compiler, interpreter). The smart contract’s functions are conducted when the inputs for the execution are received from the smart oracles and involved parties (commitment to goods through coins).

The smart contract’s execution generates a new set of transactions and a new state for the smart contract. The set of findings and the new state information are entered into the distributed ledger and verified using the consensus mechanism.

Finalize

The resulting transactions and updated state information are put in the distributed ledger and confirmed using the consensus process after the smart contract has been performed. The previously committed digital assets are transferred (assets are unfrozen), and the contract is completed to confirm all transactions.

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Bitcoin falls to $36K, traders say bulls need a ‘Hail Mary’ to avoid a bear market

Bitcoin (BTC) price continues to sell-off and the knock-on effect is an even sharper correction in altcoins and DeFi tokens. At the time of writing, BTC price has sank to its lowest level in 6 months and most analysts are not optimistic about an immediate turn around. 

Data from Cointelegraph Markets Pro and TradingView shows that a wave of selling that began late in the day on Jan. 20 continued into midday on Friday when BTC hit a low of $36,600.

BTC/USDT 1-day chart. Source: TradingView

Here’s a check-in with what analysts have to say about the current downturn and what may be in store for the coming weeks.

Traders expect consolidation between $38,000 and $43,000

The sudden price drop in BTC has many crypto traders predicting various dire outcomes along the lines of an extended bear market. Others like independent market analyst ‘Rekt Capital’, are not so quick to jump the gun and declare that all is lost.

As shown in the following chart posted by Rekt Capital, “the recent BTC rejection means that BTC is now residing at the lower region of its current $38,000-$43,100 range.”

BTC/USD 1-week chart. Source: Twitter.

According to Rekt Capital, “Bitcoin is just consolidating inside the $38,000-$43,100 range,” but needs to hold this support level to avoid dropping down into a lower consolidation range.

Rekt Capital said,

“Technically, the $38,000 support area is what separates BTC from entering the $28,000-$38,000 consolidation range. Bitcoin last consolidated in said range in Q1 and Q2 of 2021.”

Head and shoulders pattern confirmed

Analysis of the BTC price action from a purely technical point of view was touched on by David Lifchitz, managing partner and chief investment officer at ExoAlpha, who pointed out that the “giant head and shoulders pattern for BTC is now completed with the neckline broken with BTC at $38,300.”

BTC/USDT 1-day chart. Source: TradingView

From a theoretical standpoint, Lifchitz noted that this pattern predicts a possible drawdown as low as $20,000, but he stated that the “fall has generally been less than that” and suggested that “the $31,000 region could definitely be in sight.”

From a fundamental point of view, Lifchitz noted multiple factors that are creating headwinds for BTC, including tightening from the U.S. Federal Reserve, chatter from the EU regulators looking to ban proof-of-work mining, profit-taking from late 2021 and the continued uncertainty about the economic future as it relates to the Covid pandemic.

Lifchitz said,

“Therefore for Bitcoin, a move down to the low-mid $30,000 could be definitely in the cards soon before real dip-buyers show up.”

Traders look to scoop up BTC at $30,000

A look at how traders have responded to this drawdown as compared to the pullback in June of 2021 was provided by analyst and Cointelegraph contributor Michaël van de Poppe, who posted the following chart highlighting the major support zones for each period of weakness.

BTC/USD 1-day chart. Source: Twitter

van de Poppe said,

“Back in June → People are waiting for $23,000 to $25,000 to buy. Right now → People are waiting for $30,000 to buy. Similar fake breakout on the upside to nuke afterward into support.”

A similar point of view was offered by trader and pseudonymous Twitter user ‘Fomocap’, who posted the following chart outlining how BTC could perform in the days ahead.

BTC/USD 1-day chart. Source: Twitter

Fomocap said,

“Relief bounce to $44,000 – $42,000 retest, if rejection then $35,000 – $33,000. What do you think?”

Related: Crypto Twitter responds to Bitcoin dump: ‘Ok cool’

Bulls need a close above $39,600

A final bit of insight into was offered by crypto trader Scott Melker, who posted the following chart showing the price breakdown below a key level that must be recovered.

BTC/USD 1-day chart. Source: Twitter

Melker said,

“Bulls looking for a Hail Mary close above $39,600 on the daily. A close below (especially on weekly) is a break in market structure, lower low etc. Bears showing no mercy.”

The overall cryptocurrency market cap now stands at $1.801 trillion and Bitcoin’s dominance rate is 40.4%.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

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SEC rejects MicroStrategy’s Bitcoin accounting practices: report

Business intelligence firm MicroStrategy reportedly acted contrary to the Securities and Exchange Commission’s accounting practices for its crypto purchases.

According to a Bloomberg report, a comment letter from the SEC released Thursday showed the regulatory body objected to MicroStrategy reporting information related to its Bitcoin (BTC) purchases based on non-GAAP, or Generally Accepted Accounting Principles. The business intelligence firm has been reporting it used these methods of calculating figures for its BTC buys excluding the “impact of share-based compensation expense and impairment losses and gains on sale from intangible assets” — essentially, negating some of the effects of the volatility of the crypto market.

GAAP rules are seemingly not designed for reporting the value of cryptocurrencies. However, MicroStrategy has purchased 124,391 BTC as of Dec. 30, representing more than $4.7 billion in value across several buys totaling roughly $3.8 billion since August 2020. The company reported it used non-GAAP practices to exclude “cumulative impairment losses” from the cost and based the value of its holdings on the market price of 1 BTC at 4:00 EST on the last day of each period.

MicroStrategy said following a BTC purchase in July 2021 that it “believes that these non-GAAP financial measures are also useful to investors and analysts in comparing its performance across reporting periods on a consistent basis.” The SEC reportedly said MicroStrategy should “remove this adjustment in future filings.”

Related: MicroStrategy CEO won’t sell $5B BTC stash despite crypto winter

The report came as shares of MicroStrategy fell more than 17.8% in the last 24 hours to reach a six-month low price of $375. The drop may have been affected by BTC also falling to a six-month low as the crypto asset dipped under $38,000.

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