Not many know but the idea that formed the basis for the NFT started almost by accident more than a decade ago
Source: Valve
By: Shahar Scanner
If you follow what is happening in the world in some way, you may have heard the term NFT. If not, we would be very happy to talk to you about the possibility of paving your cave in August and we will tell you that NFT, or the non-replaceable token (Token) is a technology that allows people to take ownership of a digital property exclusively.
Each such “token” represents one asset (say a drawing of a bored monkey) and ensures that unlike a normal drawing of a bored monkey you can find the specific monkey online you can not duplicate it infinite times, just like a work of art in the real world (or real monkey, if you think about it) The NFT assures us of the uniqueness and rarity of the object it represents, and with the rarity comes the value and in this case very much value, in 2021 alone sales of works of art and digital collections in this technology jumped to $ 17 billion. Not bad at all for a technology that almost no one had heard of a year before.
But even if you already know all this, you may be surprised to find that the concept of selling unique pixels for real money is less new than one who might be interested in Web3 and Crypto might think. The truth is that unique digital assets have been changing hands for money for a long time, and there is even a company that has managed to make money from it for more than 15 years. If you are a gamer, there is a good chance that you not only know her, but even use her services quite a bit.
The beginning – half life
In 1998, a game was released that changed the world of gaming forever – Half Life, by Valve. He was one of the first titles to present a fascinating and suspenseful story within a first-person action game. During it, the actors step into the radiation-resistant boots of Dr. Gordon Freeman, an ordinary physicist at a research institute who survives an unconventional accident, which, of course, opens the door to another dimension populated by monsters. Freeman was forced to put physics classes aside, and start taking crash courses on how to use a variety of weapons, to close the gate and finish the shift alive.
Half Life was a huge success, both commercially and for critics, who argued, among other things, that the first-person shooter genre could be divided into two: those that preceded Half Life and those that came after it. It’s good and beautiful, but Valve did not intend to stop there. In addition to games like the original and successful portal based on HL, the studio is also responsible for the strategic action game Counter Strike. Since its release in 2000, CS has become one of the most popular network games, and has even managed to lay the groundwork for esports competitions and provide a fertile ground for the growth of a new kind of talent; Players who have become superstars, and gained publicity that was until then reserved only for movie stars or people who know really well how to move balls from different parts of the pitch to other parts of it.
Exhale steam
But all these successes were still just the beginning. In 2002, Valve released its most revolutionary product. Unprecedented for a computer games studio, this product was not a game. And yet, it has changed the lives of everyone who has bought computer games since then. This refers, of course, to the Steam platform.
Short history lesson: Before 2002, the way you bought computer games was not very different from the way you bought cucumbers. Go to the store, pick something from the selection they had there, and buy it, when it’s burned on a disc (okay boomer, there were also disks before, thanks). In addition to the hassle and awkwardness of this whole buying move, this model had a few other drawbacks. For example, what if a game becomes really popular and runs out of stores? In such a situation there is nothing to do, have to wait until it returns to stock. And what if, say, you came home, installed the game (from the disc) and did not like it at all? You had to wait even then, only this time for the coming of the Messiah – because it was the best chance to get your money back.
Steam’s entry into the market has introduced an entirely new model: an online store where a player can purchase a digital copy of a game, and download it online regardless of inventory or a physical copy that can be destroyed. And if the game is not to the liking of the buyer, there is even an option to regret and get the money back. The new model offered players a significant improvement in quality of life, but for game developers it was a real game changer. The fact that gaming distribution no longer required physical products, inventory management and other concepts from the vegetable trade, made the process much simpler, more convenient and cost-effective – especially for small gaming companies that until then had to compete for the limited attention of one of the few distribution companies on the market. Steam has created a democratization of the gaming industry, and a kind of equality of opportunity – any developer can expose his game to the entire gaming community, as soon as it is ready, and sometimes even before.
Digital assets and non-punctual tokens
Steam store in 2009. Screenshot: Internet Archive
Okay, so how does all this relate to NFT? Quite simply, you can buy the original copy of this article for a few million dollars if you just send us an email. Well, not really (unless there’s someone involved). But there is still a connection, a connection that stems from an interesting phenomenon that the brains at Valve began to notice in 2007: players of some of the games in their store started buying virtual objects from each other. At first in the form of barter in the games themselves, and then also in online trading platforms like eBay. This interest has also created a problem of cheating of various kinds, as well as an instinctive response of anxiety on the part of some of the gaming companies who feared losing control of their content.
And as in the past – where others saw a problem, Valve saw an opportunity not only to help players get the products they wanted without fear of cheating, but also, naturally, an opportunity to get a small percentage of the same money that changed hands. And so, in 2007, when their digital store already has 15 million active users, Valve releases the Steam Community Market – a digital market within Steam that allows players, for the first time in history, to trade virtual objects, in a supervised and safe manner. It was the first time gamers could earn anything from their game hours (other than wrist inflammation, of course) and Steam trading thrived unprecedentedly. Some of the players even made enough money to make a living, or at least engage in it as a side job.
As mentioned, e-commerce existed before Steam made it comfortable and safe for gamers, but Valve’s next move first introduced the element of rarity (Scarcity) and the one-off into the e-commerce realm: in 2013, Valve launches a new product in its store: series of ” Virtual cards’ elements of the games, these series come in limited numbers and quickly become a hot commodity in the store, the fact that unlike games, skins or other products in the Steam store these cards had a finite number made some of them rare and highly sought after by players, causing their price to climb Inevitably when the expensive ones even reach prices of close to two thousand dollars. Actually the only difference between the Steam and NFT cards of today was their restriction to the platform itself, but with more than 40 million users, for Steam players it didn’t particularly bother. In fact these cards created such a high demand that Steam started to suffer from the problem of fake games created just so that the people behind them could produce such cards and profit from trading in them.
At a later stage Valve began to allow not only the trade in objects but also their creation, thus providing game lovers an opportunity to profit also from their design talent, and from the sale of unique digital works such as hats or examples of weapon skins in Counter Strike, for example, to other players. This was the first time that user-generated content (UGC) became a hobby that could be traded. Here, too, the result was an entirely new economy, which along with the blessed revenue for creators (in 2020, for example, creators on Steam earned a total of $ 57 million), also created phenomena like gambling and money laundering within what was a total platform through which players could buy Cosmetic enhancements to their characters in the game.
Fifteen years have passed since the opening of the Steam Community Market and the innovative ideas presented with it have spread further. Initially, they came to the other gaming companies that turned the buying and selling of in-game cosmetic content into a thriving business model – as in the case of Fortnite – a free game that generates profits of about a million and a half dollars a day from selling cosmetic items to players.
Recently, the community market model has also entered the center of technology worlds, where Valve’s conceptual descendants can be found as NFT and crypto ventures that promote a new, digital and unconcentrated world – ideas that sound very familiar to the tens of millions who use Steam to play, create and sell. Digital assets in the community-driven free market.
It’s hard to know what will eventually emerge from the current NFT trend, but, the technology it introduces and the real ownership of assets in the virtual world that is made possible as a result, will likely stay with us for the foreseeable future, even the creators’ economy The Games: It is estimated that by 2022, user-generated computer game content will account for 10 percent of industry-wide revenue and reach an estimated $ 20 billion.
Get ready for the Matavers’ arrival
In any case, Valve’s technological innovation is just one example of technologies and ideas that start their way in gaming and then reach every home. In the coming years, with the integration of the Matevers in discourse and probably also in everyday life, it is very likely that we will see more and more concepts from the gaming world cease to be secrets kept for gamers and become part of our economy, work, and culture. Many of the people promoting NFT technology today began their careers as creators and traders in the Steam store and presumably a large portion of today’s avid gamers will be among the beneficiaries of the UGC revolution or the next big trend to begin in this world.
In other words, you might want to stop straining and work hard in the real world and find some interesting game to spend your time on.
The author is a co-founder and CMO at Overwolf
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