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Non-fungible tokens[1] or NFTs have quickly shot up in popularity since they were launched back in 2014. In fact, the market for NFTs is expected to grow to $13 billion by 2027. Recently, NFT sales in just the art segment went on to hit the $1.5 billion mark in the primary market.
These NFTs are built on existing blockchains, mainly the Ethereum blockchain that allows you to create ERC-721 non-fungible tokens.
But here’s the thing — to buy and own NFTs, you’d typically have to make a payment in the form of fiat currencies or cryptocurrencies. Alternatively, you would have to own an NFT and trade it in exchange for another one.
But what if you don’t want to go about it in either of these ways? That’s where human mining comes into the picture.
Let’s find out what it’s all about.
Human Mining
As the name suggests, humans work here to help with the cryptocurrency mining process. This is slightly different from the Proof of Work[2] mining process where computers work to solve complex algorithms in a bid to add a block to the blockchain.
Instead, in human mining, humans who have enrolled on a platform get paid to play games and stand a chance to win rewards in the form of NFTs or a particular cryptocurrency. In the process of playing the games, they’re putting in the work needed to acquire the cryptocurrency or the NFTs. As a result, they’re helping in sustaining the blockchain by mining.
And these NFTs that they’d get on mining would have a price point attached to them as well.
For instance, in Wizardia Tournaments, users can win prizes for fighting battles on the platform. All you need to do is own three NFTs to compete. Next, you need to purchase an entry ticket to the tournament. Once that’s done, you can start fighting the battles and win NFTs and $WZRD tokens from the prize pool.
[1] Non-fungible Tokens: These are tokens that are unique and can’t be interchanged or replaced. NFTs can be used to represent any real or intangible object like intellectual property.
[2] Proof of Work: This is a consensus algorithm used by cryptos like Bitcoin where miners would have to solve complicated problems to add a block to the blockchain. The winning miner gets the reward.
Advantages of Human Mining and NFTs
Now that you know what human mining is all about, let’s try to understand how the combination of human mining and NFTs can be a huge advantage for you.
1. Grows Loyalty
One of the greatest benefits of leveraging human mining is that it’s a great way to build loyalty as players would be keen to keep playing the game and getting their hands on more rare NFTs that would come out from the mining process.
Additionally, as the players would keep getting more coins and NFTs from these games, they’d essentially start becoming bigger stakeholders, and this can boost their loyalty too.
2. Requires Minimal Investment
The basic concept behind human mining is that crypto enthusiasts shouldn’t have to shell out a lot of money for participating in the mining process.
This would typically be the case if they were to go for Proof of Work mining where they’d need to invest in high-end computing infrastructure to be able to solve complex problems before anyone else to get rewarded.
That’s why when it comes to human mining, the users would be required to invest little to join the game (and the blockchain, as an extension). In most cases, the users might be required to purchase a few NFTs to join the game.
3. Staking Rewards
The human mining model of games (play to earn) essentially works on the Proof of Stake[1] model. As a result, the users could benefit from staking rewards for the NFTs that they purchase.
This could turn out to be great passive income for them — all while they could use their existing NFTs to win more NFTs and crypto rewards for playing the games.
For instance, if you choose to purchase Arena Genesis NFTs from Wizardia, you’d be receiving staking rewards of up to 76.8% APY until the battle arena goes live. And even post that, the NFT holders would get royalties for every fight, including those for rewards, $WZRD, resources, or skill mastery.
4. NFTs Have a Monetary Value
One of the other advantages of human mining and NFTs here is that NFTs have a monetary value attached to them. When users purchase NFTs to start mining, they’re essentially investing in the NFT.
Over the course of playing the game (mining), they’d perhaps get options to upgrade their existing NFTs and make them even more valuable for other users who are joining the game. This, in turn, would increase the monetary value of the particular NFT that the user has upgraded.
The users could trade these NFTs in exchange for crypto tokens and make a handy profit from them too.
For example, on Wizardia, there’s a dedicated Wizardia Marketplace planned out where users would be able to sell, trade, or even rent out NFTs to other users and make good passive income or profit in the process.
Going the Human Mining Way
Human mining is a great way to get a loyal user base and build your blockchain at the same time. However, it’s incomplete without the incorporation of NFTs that give meaning to the model and also give something of value to the users.
The users work (play crypto games) to join the mining process and win rewards. At the same time, they may also win staking rewards and could sell and trade NFTs to make a handsome profit from them, making it a win-win situation for all the stakeholders.
[1] Proof of Stake: This is a consensus algorithm used by blockchains like Solana and Binance Smart Chain. Here, the users stake some of their coins in a bid to add a block to the blockchain. The one with the maximum stake gets chosen for adding the block and gets rewarded for it.