Video games are quickly overtaking television and movies as society’s preferred source of entertainment. Some people rely on video games for money, but most others play them to escape from reality.
Since the emergence of internet gaming, particularly in developing nations, gold farming and unauthorized markets for in-game products have existed. NFTs and other blockchain technology may increase interest in play-to-earn games.
Now let us look more closely at play-to-earn games and the reasons they might be the next big trend in the cryptocurrency industry. If you are thinking about entering the Bitcoin world, you should be aware of the numerous benefits of trading in cryptocurrencies.
Understanding About Play-to-Earn Blockchain Games
P2E (play-to-earn) games provide players with rewards that have real-world value.
NFTs are created by several blockchain-based P2E games to represent in-game assets like virtual land or in-game characters. Like any other kind of NFT, these NFTs may be bought and sold outside of the game, allowing users to gain cryptocurrency through gameplay.
P2E NFTs have two significant advantages:
- They remove the walled garden of conventional video games and allow players to possess in-game objects. Players may thus sell them for cryptocurrencies or fiat money on any NFT marketplace that is compatible with them.
- NFTs’ blockchain-based nature opens the door to special abilities like programmatically generating characteristics or features to create rare items.
The in-game economies of many play-to-earn games also make use of traditional fungible tokens in addition to NFTs. By completing objectives, competing against other players, or engaging in additional activities, users can get these tokens.
If sold on a crypto market, these tokens might generate cash while also enabling in-game purchases or unlocking particular features. Some individuals utilize play-to-earn games to make a career because they have grown to be so profitable.
Most P2E Played Games to Earning
By far, Axie Infinity is the most well-liked play-to-earn game.
Axies, which are cartoon monsters based on NFT, are collected by players. In PvE Adventure Mode, players can use the distinct weaknesses and strengths of each Axie to gain SLP (Smooth Love Potion) tokens. These tokens can then be burned by players to produce Axies.
Decentralized finance, or DeFi, and NFT ownership are combined in several play-to-earn games.
Other well-liked P2E games consist of:
- Worldwide Webb: An interoperable pixel-art MMORPG called Worldwide Webb uses NFTs for its in-game characters, pets, land, and other things.
- Valkrio: A PvP and PvE game using blockchain technology called Valkrio has valuable digital assets that can be exchanged on NFT exchanges.
- CryptoNuggets: In the western-themed NFT game CryptoNuggets, players assemble miners and horses before setting out in quest of gold nuggets.
- Star Atlas: Space exploration, territory conquest, and political hegemony are all featured in the grand strategy game Star Atlas.
Tax Consequences of Play-To-Earn
P2E games have the potential to result in a large number of taxable events. Even though the IRS has not provided much information, players should adopt a prudent and proactive strategy to be ready for tax season by understanding what they potentially owe.
Possible tax repercussions include:
- If they decide to sell their NFTs or in-game currency, they may be required to pay regular income tax.
- The crypto that players who buy NFTs or in-game tokens to begin playing with may have to pay tax on.
- Players who purchase NFTs can be subject to capital gains and collectibles tax upon a subsequent sale.
Conclusion
Play-to-earn games have grown in popularity. The crypto community continues to push the limit and create innovative games, even if only some are on board with merging real-world economics into video games. P2E skills could play a crucial role in the metaverse of the future.