About game application, effect and risk of blockchain and NFT – CEO Kiyong Lee of RealCheck

  • subject: by blockchain, NFT, and digital assets
  • Lecturer: Kiyong Lee – Real Check / Director
  • Presentation area: Blockchain, NFT
  • Lecture time: 2021.11.18 (Thu) 10:00 ~ 10:50
  • Lecture Summary: About game application, effects and risks of blockchain and NFT
  • When Satoshi Nakamoto issued the first Bitcoin in 2009, the underlying blockchain technology received little attention. However, since the mid-2010s, the cryptocurrency boom has occurred around the world, and the block chain, which has the characteristics of immutability and data integrity, has also received a lot of attention. Confident in the growth potential of such blockchain, CEO Ki-yong Lee organized all existing businesses and established RealCheck, a company specializing in bitcoin-virtual currency-blockchain.

    ■ Carbon and Blockchain – Other factors for immutability

    How does a blockchain become immutable? A general integrated database can be read, written, and updated (modified, changed, deleted) by an administrator or hacker. On the other hand, blockchain, a decentralized data storage technology, cannot be updated by anyone, and can only be read and written. However, that does not mean that all blockchain-based technologies are unforgeable.

    CEO Lee explained this by taking the relationship between diamond and carbon as an example. Diamond is composed of about 99.9% carbon and other elements, and has the characteristic of being hard and beautiful. But can carbon be called a diamond? Of course not. Carbon can be a diamond, but carbon itself is not hard and beautiful.

    The same goes for blockchain. Blockchain technology itself can be forged or tampered with. There are various blockchain-based technologies, starting with cryptocurrency, but for data integrity, several systems such as PKI (Public Key Infrastructure), POW (Proof of Work), and P2P (Distributed Network) must be accompanied. In other words, block chains that simply connect or duplicate existing block chains or block chain technologies that do not involve POW do not have the most important characteristic of non-forgery.

    Most of the current blockchain-based businesses are focused on the keywords representing the blockchain rather than these technical parts. Because of the distributed ledger, it is free from hacking threats, and anyone can access and track data, so transparency is verified, forgery verification is easy, and anonymity is guaranteed.

    Accordingly, CEO Lee emphasized the possibility of forgery and falsification of blockchain-based businesses and the risks associated with it. In addition, CEO Lee explained that currently the only blockchain technology with data integrity is Bitcoin, the largest CPU-based cryptocurrency, and Ethereum, the largest GPU-based cryptocurrency.

    ■ NFT craze in the game industry – Limits on impossibility of forgery

    Blockchain-based Non-Fungible Token (NFT) uses PKI and smart contracts to create a platform that allows registration of ownership, giving unique identification values ​​to specific goods and allowing them to be transacted. Until now, it has been mainly used for the ownership of digital works and works of art, but recently the game industry is showing great interest in NFTs. In fact, major game companies such as WeMade, NCsoft, Krafton, and Pearl Abyss announced their intention to use NFT, and the stock price rose.

    When NFT is applied to the game, users can secure and secure ownership of characters, points, items, etc. In addition, since all transaction details of these items are recorded on the NFT platform, duplication is impossible. In addition, game companies can prepare an NFT platform to collect transaction fees, so a win-win with users is possible.

    However, CEO Lee focused on the problems instead of the positives about the NFT craze blowing in the game industry. Blockchain-based technology should ultimately have immutability, but it is currently almost impossible due to issues surrounding NFTs.

    The first issue is that NFT platforms are diverse. Numerous NFT platforms, including OpenC and Larible, are already in business, and game companies are developing their own platforms. For each platform, there are differences in the NFT issuance process, rules, and the underlying blockchain technology, which inevitably leads to confusion for users. In addition, the burden is increased because it is the user’s responsibility to figure out which NFT platform is the most stable and how to use it.

    Conversely, it is also a problem for certain large game companies to monopolize the market by developing their own NFT platform rather than Ethereum-based in order to reduce gas costs (transaction fees). This is because NFTs based on other cryptocurrencies have the possibility of forgery or falsification of data by outsiders by themselves. In addition, since there are threats such as forgery of data by insiders and data destruction according to government policies, centralization of a specific company cannot guarantee data integrity.

    In addition, the monopoly of the NFT platform is also a matter of trust. Currently, most large game companies are developing an NFT platform in the form of a closed blockchain. The value of the item will be determined based on the specified amount of issuance in addition to the actual performance. However, in a closed blockchain, the amount of issuance may be arbitrarily modified, and the value may change or value may not be properly preserved.

    ■ Future games and NFTs – For data integrity of users

    So far, there have been many projects to ensure data integrity, and the story goes round and round, eventually reaching NFT. Blockchain technology would not have been necessary if the NFT was simply to give a unique identification number, but NFT based on the block chain emphasized the impossibility of forgery and could give users trust.

    However, NFT transactions through cryptocurrencies other than Ethereum still have some degree of risk. However, hacking is possible if you clone and use existing cryptocurrencies, including Ethereum, as they are. Therefore, it is necessary to minimize the possibility of data forgery and falsification and prevent the worst situation in advance through technologies that supplement existing cryptocurrencies such as sidechains.

    NFT is clearly a revolutionary technology that represents the present age. However, game companies should always keep in mind that there is a risk that is as fatal as the excellent effect of a new technology called NFT. Lastly, CEO Lee recommended that game companies use Ethereum-based NFTs if they want to ensure the integrity of users’ valuable data.