Author: Sebastian Scheplitz
Depending on which side of the digital fence you’re on, three letters of the Roman alphabet could make you glaze over faster than Prue Leith with a lemon drizzle cake.
Alternatively, the same three letters will inject a sense of excitement akin to that of a giddy schoolkid on the last day before the summer break.
These three letters are, of course, NFT.
From social media to mainstream news outlets to gaming platforms and onto social news sites, you can’t get away from NFTs even if you wanted.
Well, you’ve come this far, so you probably relate more to the student ingesting industrial amounts of Kool-Aid, wide-eyed and exhilarated by the prospect of NFTs and the influence these will have on the future of online casinos.
So here is a quick summary of this topic before we dive deep into it:
The “First Ever NFT” was sold back in 2014 by an artist named Kevin McCoy for a cool $1.4 million, called “Quantum”. This was the first time a Jpeg was sold at such a premium.
So, before you start sifting through last year’s Christmas snaps and thinking of flogging a grainy image of your sherry-fuelled uncle Keith doing a one-man conga line, Mariah Carey blasting, to a third-party NFT site, there are a few caveats to consider.
How does NFT art work?
Well, the NFT art’s value is tethered to real-world price or speculation. Unless your very same uncle went viral and was omnipresent on Reddit or sent tongue-in-cheek in GIF form between millions, even billions of users, it’s highly unlikely that your photo of Keith would hold any value in the NFT world.
What Is an NFT?
NFT is not just an artform!
An NFT is a unique digital asset represented by a line of code on a decentralized digital ledger called a blockchain. In this case, it’s mostly the Ethereum blockchain, which is also the basis for the ETH cryptocurrency.
Standing for Non-Fungible (AKA non-interchangeable) Token, these units of data are stored on a blockchain, just like cryptocurrencies. The difference between NFTs (sometimes known as “Nifties”) and a cryptocurrency is that NFTs function more like a subset of cryptocurrencies.
Cryptos, in contrast, are fungible – you can saunter up to an ATM and withdraw Benjis from your crypto wallet, unlike with NFTs.
So, now you know a non-fungible token is just as much a token as a cryptocurrency.
But you can easily replace one Bitcoin with another Bitcoin. It will still be the same thing. Just like one bill of real money, also called fiat currency, can be exchanged for the same value bill – or for another currency.
As of right now, you could exchange 1 EUR for roughly 0.85 GBP or for 1.15 USD. The same goes for 1 BTC (Bitcoin) to 42,599.50 USD in fiat, or 13.87 ETH (Ethereum).
However, an NFT cannot be exchanged so easily.
How to Explain NFTs to People Who Think They’re Just JPGs
For now, since we’re still in the early stages, NFTs are limited to JPGs, GIFs, and animations (with PNG, SVG, MP4, WEBM, MP3, WAV, OGG, GLB, GLTF less frequently used but also supported) – sometimes pixelated, sometimes highly sophisticated 3D art.
This could lead to the error of believing that it’s just some weird images that anyone could copy and paste – and own.
Let’s use an analogy for NFT art. Remember when you used to trade sports trading cards in school and one card was worth more than another one – just because you knew it was rare and also because James would give you three of his cards of mediocre players for your really good player?
Just imagine, everyone in the world would now be able to look this trade up in a big merchant’s book and know that James now owns your card.
In the case of NFTs, there’s a specific line of code (the token) connected to the real-world media. And this line of code is impossible to duplicate.
The media itself is not the NFT. The code/token is!
So, if you took a picture of the trading card that James now owns, it’s still just a photo and everyone would know that you only own the photo and that James has the real thing.
Just as a photo of the Mona Lisa doesn’t mean that you own it now. Just as a screenshot of an NFT art is not the digital code behind it. And that digital code has a certain value to certain people.
For now, NFTs are just JPGs, GIFs, and 3D animations.
But, in the future, your concert tickets could be an NFT, and to board a plane, you might have to show your NFT that shows the holder’s personal eligibility – just as there are QR codes on your ticket now. It could even go as far as selling your house through a smart contract where your physical house is tied to an NFT and ownership is being transferred digitally.
That’s the fun part for iGaming. Just imagine a digital racehorse that’s yours.
And you can train it and other people can bet on it. But we’ll get into that in our article “NFT Horse Racing for iGaming Supremacy”.
So, why do people spend millions of dollars on NFT JPGs?
It might be a concept that’s hard to grasp.
But so is collecting Marvel comics, Pokémon cards, or the above-mentioned sports trading cards. Heck, I collected cans and coins from around the world when I was a kid. It was a lot of fun, for me at least.
In the case of NFTs, it’s not just the “collecting” part, you can use them for branding too.
This NFT from the “Cryptopunk” collection is not just “Cryptopunk #6046”. It’s called “Richerd” after its owner, a Canadian software developer who bought it for $83,209 on 31st March 2021 – and is now worth $9.67 million at the time of writing.
Why is it worth $9.67 million, you ask? Well, because someone wanted to buy “Richerd” from the actual Richerd for that amount of money at an auction similar to what you see at Sotheby’s, just digital.
Richerd rejected the offer.
“Well, obviously, the day before I said ‘I’m not selling it for any price,’ so if I sell it for that price, I’d be going against my integrity,” Richerd said in an interview. “On top of that, I’ve used this CryptoPunk as my profile pic, as my brand. Everyone knows that’s me.“
“In the real world, how do people flex their wealth?” says Alex Gedevani, an analyst at cryptocurrency research firm Delphi Digital. “It can be buying cars or watches. How scalable is that versus if I buy a CryptoPunk and use it as my profile picture?“
And if you don’t know Richerd, you might know Jimmy Fallon, who bought his NFT from the Bored Ape collection and named it “Captain Breezy”.
Is collecting NFTs something you need to do, too?
But understanding NFTs on a basic level is necessary. Especially for the iGaming industry.
NFT in Online Gambling
Gambling with cryptos is nothing new, and online casinos accepting non-fiat deposits have been around for close to ten years. NFT-focused sites, on the other hand, are relatively new.
Firstly, let’s set the record straight: NFTs cannot be used as a payment method for online casinos.
More interestingly though, NFTs can be purchased as a kind of members-only passcard, unlocking certain promotions and benefits that non-NFT owning punters are excluded from.
Gambling Apes, for example, are fully-purchasable NFTs available on the opensea.io marketplace and limited to 7,777 units.
Once you’re the proud owner of a Gambling Ape you not only gain access to exclusive in-person events such as the Go-Bananas party in Las Vegas, you also actually own a stake in an online casino and can benefit from passive income.
Their NFT holders will enjoy the following earning structure:
- 70% profit share to Gambling Ape NFT owners
- 20% promotion wallet
- 10% treasury for big wins
This is an incredibly exciting time for casino players. Casino stakeholders are no longer sitting in ivory tours counting player losses and wagering figures; rather, players themselves are benefiting – in a limited way – from not only casino profits, but also earning profits from their gambling losses. This has implications of a more favorable overall RTP (return to player) while they play their favorite games.
Gambling Apes holds a Curaçao license for two sites – one as an NFT-facing site, the other for a traditional online casino that accepts fiat payment.
But, Gambling Apes is not the only NFT Casino. Rollbit and Slotie also operate on a similar business model whereby players become stakeholders in the enterprise and are viable for promotions and access promos to win NFTs.
The story doesn’t end there. Slot production pioneers Red Tiger released a slot with an NFT-theme in September 2021. NFT Megaways™ takes the 8-bit visual cue of releases from the eighties such as Pac-Man, Contra, and Super Mario Bros. 3.
While many may believe that NFT Megaways™ is a merely nostalgic outing, Red Tiger is, in fact, playing to a demographic that were once spotty-faced button bashers in arcade halls but are now forty-somethings with kids of their own and now possess sizable disposable incomes.
Similar to NFTs, the metaverse has become scratched into our vernacular thanks to references from pop-fiction dating back to the late seventies and is present in Tron (1982), Neuromancer (1984), Red Dwarf: Back to Reality (1992), and The “let’s not talk about the reboot” Matrix (1999).
But what exactly is the metaverse?
Put simply, the metaverse (sometimes known as Web 3.0) is an online space where people function as in real life but with digital avatars. The first metaverse is cited to be Second Life, which evolved into our consciousness in 2003 and is basically The Sims online.
Mark Zuckerberg is a pioneer of the metaverse going as far as rebranding Facebook, Instagram, and WhatsApp under the “Meta” brand. What will the metaverse look like?
Right now, ol’ Zuck and Co. envision a marketplace where users can buy products and services. If you can imagine a VR-styled Amazon shopping experience, you’re kind of halfway there.
Online Casinos and the Metaverse
Metaverse casinos are the next natural evolution for online gambling. For an industry that blossomed from the first harmonic twinklings of the dial-up connection, it’s a development of natural progression.
Also known as decentralized casinos, metaverse casinos are virtual casinos operating on platforms such as Decentraland (Gambling Apes) and Sandbox (Slotie), each with its own unique NFTs use cases for gambling.
The Best NFT Marketplaces
Luckily, to own your own NFT, you don’t need a bunch of nerdy know-how or buckets of Gouda. You can become the proud owner of your very own gambling-themed unique digital asset for around $20, purchased with a physical bank card.
For the best places to buy NFTs and access metaverse casino promotions go to:
- Axie Infinity
- Super Rare
How to Create Your Own NFT
The best way to truly understand the ins and outs of NFTs, how they function, and their potential value is to create your very own NFT. The steps go like this:
- Decide on a concept
- Settle on a platform
- Create and link your crypto wallet
- Buy Ether
- Transfer Ether from the exchange to your crypto wallet
- Create your art in PNG, SVG, MP4, WEBM, MP3, WAV, OGG, GLB, or GLTF format.
- Mint and share your NFT (Rarible has a handy lazy minting feature)
- Sell your NFT
Until you’ve completed the process of giving digital birth to your own NFT, it’s hard to fully comprehend the concept of NFT. Sure, you’re not going to get filthy rich overnight minting an NFT but at least you and your uncle Keith will have something to chat about over the turkey next year.
Are NFT Casinos Safe?
The million-dollar question. NFT casinos are viewed as more trustworthy than traditional online casinos due to the transparency of transactions and gaming outcomes that come as standard with a decentralized casino.
Rather than relying on third-party verification, the blockchain tech that powers NFT casinos is seen as more foolproof as the potential for corruption is minimized significantly.
Provably Fair Algorithm Vs. Random Number Generator
If this were a lazily written article, it might take inspiration from early nineties shampoo commercials and you’d read something along the lines of “Here comes the science part”. Here at Translation Royale, we wouldn’t dare stoop so low.
NFT online casinos use the provably fair algorithm, instead of the random number generator (RNG) favored by fiat-accepting online casinos.
What’s the difference, you ask? Well, they both generate numbers at random, but the provably fair algorithm cache is a public ledger meaning players have access to their playing history.
Fiat-accepting casinos, on the other side of the coin, employ the use of a digital random number generator and the legitimacy, accuracy, and trustworthiness of the outcomes are verified by a third party. These third parties are often legislative bodies such as the AGCC, MGA, UKGC, or CGCB.
NFTs, the Metaverse and the Future of Online Gambling
We’re living in incredibly exciting – some might say terrifying – times. The future has finally arrived for online gambling and the metaverse is where it all will quite literally play out.
With any emerging technology, there will always be the inevitable doubters, and indeed, it’s probably not the best idea to remortgage your house and go on a shop-’til-you-drop NFT spending spree, just yet at least.
The stability of crypto markets has always been highly volatile and whether or not governments will continue to allow blockchain-based currencies to proliferate remains to be seen.
The traditional banking world is a seemingly unstoppable force and whether there will be region-specific crackdowns is anyone’s guess. For now, at least, the metaverse as a digital gambling utopia is where the smart money’s at. In Cryptos and NFTs, of course.
Join us (roughly) at the same time next week as we wrestle the giant pixelated octopus of how to use NFT for sports betting.
How did you like Sebastian Scheplitz’s blog post “Digitizing the Online Gambling Revolution With NFTs”? Let us know in the comments if you have anything to add, have another content idea for iGaming blog posts, or just want to say “hello.” 🙂