How A Blockchain Game Turned $ 10 Into $ 12,000

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A few years ago I wanted to understand cryptocurrencies and started to research. I was overwhelmed by the large number of different pieces. Why is one coin stronger or more valuable than another coin? I had no idea – and still don’t.

During my crypto research, I discovered a blockchain video game called Splinterlands. The base game is free, although you really, really, really want to spend the $ 10 to make the entire game available. Once you do this, you start to gain ownership of the game’s Monster Cards, which are non-fungible tokens (NFTs) that exist on the internet. And what’s exciting for investors is that these cards are going up in value, like comics or baseball cards.

Image source: Splinterlands

When I first wrote about Splinterlands in July, I counted the dollar value of all my cards. You don’t use cash at Splinterlands (except for that $ 10 purchase). Cards are bought, sold, and rented using the in-game currency, called DEC. However, the cards are also found in third-party markets where they are bought and sold for dollars. And I was surprised to find that the value of my cards had reached $ 2,000.

That was about two months ago. For this article, I recounted the dollar value of my cards. Now they are going for $ 12,000.

So why is the value of my cards increasing? And is there an investment opportunity here for Fools?

Supply and demand drive up card prices

One of the ways that monster cards are divided is rarity. There are four classes of monsters: Common, Rare, Epic, and Legendary. That giant eyeball you see above is Cornealus, a legendary card. There are 2,415 in circulation. Cornealus is now going for $ 130 on various third party sites. Players like to combine cards, which makes the monsters more powerful when fighting other monsters. The card combination also removes the cards from circulation. This makes them rarer, driving up the price.

As the supply of cards decreases as part of the game, the prices are also increased by the increasing demand. As more and more people discover the game and start playing, the demand for cards is increasing. Splinterlands reports 150,000 users from around the world. Of course, the vast majority of these players are crypto fans.

Some players join guilds, which makes the game more collaborative and fun. There are hundreds of guilds where players pass on battle tips and get discounts on cards. Most of these guilds rely on English, but a surprising number involve foreign players. When you play Splinterlands, it’s like you’re at the crypto Olympics. So many foreign languages ​​are represented – Russian, French, Japanese, Spanish, Korean, Polish, Chinese, Portuguese, Vietnamese, and the list goes on and on.

The game is constantly expanding to welcome new players. So far, the company has released Alpha Cards, Beta Cards, Promo Cards, Reward Cards, Untamed Cards, and Dice Cards. All these editions are out of print. The next planned release is the Chaos Legion Pack, which will introduce even more monsters to the game.

It’s a dynamic game. Not only are new monsters constantly being introduced, but the company is adding other factors to the game. For example, the company recently sold plots of virtual land inside the game. These plots have also been sold, although the land ownership does not affect the game at all at this time – although it may in the future.

Image source: Splinterlands.

Is there an investment opportunity?

I started playing Splinterlands as part of my crypto research. In the end, I didn’t make any investments in crypto, an asset that I still don’t really understand. When you start playing Splinterlands, you receive digital keys. This is one thing I know about crypto: don’t lose your keys.

What I love about this game is that you don’t need to know anything about crypto to play it. So, although most players are currently crypto fans, the game itself does not require any crypto knowledge. This is why I play it, because my knowledge of crypto is limited, to say the least.

How big can Splinterlands grow? First of all, consider that there is already some evidence that a free game can attract a large number of players. Sea Limited, for example, thrives because gamers have downloaded its Free Fire game over a billion times. I don’t know if Splinterlands will ever have so many players. It’s a strategy game, as opposed to an action game, so the universe for potential players is probably smaller. On the other hand, the beneficial ownership of crypto NFTs is an exciting innovation. When I tell people that my $ 10 investment is now worth $ 12,000, even non-gamers start to think about gambling.

Image source: Splinterlands.

Splinterlands was co-founded in 2018 by veteran players Jesse Reich and Matt Rosen. It’s not a public company, so you can’t invest in it that way. But the company just introduced its own cryptocurrency called Splintershards (CRYPTO: SPS), which trades for less than $ 1. Splinterlands players now receive SPS as part of their gameplay.

I don’t pay dollars for playing cards, nor do I buy SPS or any other crypto. I feel like it’s too risky and I don’t understand the ins and outs of it. On the other hand, this game is really fun. I am accumulating NFT assets on the blockchain. And now I own crypto, despite myself. And I did all of this with just a $ 10 investment. Video game freaks might want to check it out.

This article represents the opinion of the writer, who may disagree with the official recommendation position of a premium Motley Fool consulting service. Were motley! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.

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