Fungible Tokens Turn Monopoly Money Into Cryptocurrency
Emerging technologies such as blockchain and cryptocurrencies have created an opportunity to match the gaming industry with the real-life property market.
If you had bought a house in San Francisco at the start of the millennium, you’d be rich now. The median price of a house then was $420,000. Now, a house in the city fetches a median price of about $1.3 million. That’s almost a million dollars in profit over twenty years, and you missed it.
But it’s not too late, not if you’re prepared to swap San Francisco’s bricks and mortar for its bits and bytes. Upland is a new Monopoly-type game based on San Francisco. It lets players buy digital versions of the city’s properties. So if you always wanted to own a Painted Lady on Steiner Street or a hemp café in Haight-Ashbury, now’s your chance — at least digitally. You can earn rental income on those properties, just like in Monopoly, and you can buy and sell those properties, just like in real life. The prices will even rise and fall (or, as it’s San Francisco, rise and rise), just like in real life too.
The idea of using the blockchain to power a market in digital property isn’t new. Upland competes with a number of other digital property games. The Sandbox, a digital metaverse, recently launched a presale in which more than 3,000 pieces of virtual land were sold in just four hours, raising around $206,000. Decentraland has picked up even more money: Over ten days in February, the company sold more than a $1 million worth of virtual real estate in its digital world. Cryptovoxels describes itself as a user-owned “virtual world powered by the Ethereum blockchain.” Users can buy virtual land in its space and use them to build stores and art galleries. Players can even navigate the world using virtual reality glasses. Think of a blockchain-powered Second Life.
Upland differs from those games by trading only in land properties rather than in the extra value that land can earn through customization. But it shares with many of them one important characteristic that’s vital to the value of the game: the use of ERC-721 tokens.
These tokens are nonfungible — each is unique — so a game using them can’t create multiple versions of the same property. Every time a game of Monopoly begins, a different player can own Boardwalk; in Upland, only one player can own each property in the city at any one time. And because the blockchain exists outside the gameworld, unlike Monopoly’s bank, players using fungible tokens will not only always own those properties, they can trade them outside the game too. Even the rent that property owners can earn in Upland is paid in UPX, the game’s cryptocurrency. Unlike Monopoly money, this too has a value and can be bought and sold in real life.
Related: Nonfungible Tokens, Explained
The addition of nonfungible tokens to virtual property has the potential to change everything: It brings gaming into the real world. Players who excel at a game — whether that’s digital Monopoly, a blockchain-powered Second Life, or something closer to Minecraft — can now earn real rewards. As they become property tycoons, they’ll be able to build up assets that they can sell for tokens that they can change into fiat currency. They might not be able to walk around their Painted Lady and build a start-up in its garage but they will be able to accumulate real value by playing and investing.
There are no guarantees, of course. The value of the properties in Upland will depend on the demand for the game. As long as players keep joining and keep wanting to buy properties, the values of the properties will increase.
All of these games bring real scarcity and ownership to assets that used to have no value outside the gameworld. At the end of a game of Monopoly, the banker collects all the money earned over the last few hours and wipes out its value. In the cryptoworld, that time retains its worth. The game never ends, and the winning continues even when you’re not playing. With crypto tokens, it’s a whole new game.
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.
Joel Comm is an internet pioneer, New York Times best-selling author, futurist speaker and co-host of The Bad Crypto Podcast. That’s a fancy way of saying he writes words, says things and loves to play with cryptos.
Disclaimer: The author is active in the Upland economy and holds UPX.