Blockchain is the word on everyone’s lips at the moment. From finance to healthcare and logistics, the world’s movers and shakers are racing to be the first to adopt blockchain as the most revolutionary technology since the Internet.
Is blockchain the future of gaming?
Blockchain has already taken the banking and financial world by storm, but there is another exciting arena ready to be shaken up by blockchain technology, and that is the world of gaming.
From in-game virtual currencies to collectible and ownable digital assets, blockchain technology makes the features and functions found in gaming worlds safer, secure, and more manageable. So, it is not surprising that the two sectors are developing a symbiotic relationship, with the gaming industry being one of the earliest adopters to jump onto the technology. Gaming is now seen as a gateway point that will lead towards the eventual adoption and use of blockchain technology and cryptocurrencies in our everyday life.
You might already know of some of the biggest crypto games out there and already play them. They could be collectible games such as CryptoKitties, Ethermon and Blockchain Cuties. Or trading card games such as Spell of Genesis and Gods Unchained - RPG Games such as LostRelics and LiteBringer, world-building games such as Decentraland and The Sandbox or a real-time strategy game such as Dark Forest.
With the global pandemic encouraging more people to stay at home and mass 5G technology adoption around the corner, the gaming industry is getting a serious boost, with blockchain technology ready to further fuel the growth. There are around 2 billion gamers worldwide who spend some $50 billion dollars on in-game assets. Typically, 100% of this total revenue goes to gaming companies. Now, things are changing.
Why is blockchain attractive to the gaming market?
Blockchain is uniquely suited for the gaming format as it enables:
· The creation and trading of unique non-fungible assets verified by the blockchain
· Fast and secure purchase of in-game assets without a 3rd-party payment provider
· Player ownership of in-game assets instead of the game developers
· Players to earn cryptocurrencies while playing games
· A decentralized cross-platform marketplace to trade and exchange game assets
· Players can participate in consensus protocols and influence game development
· Fairness of game outcomes with winners and losers recorded on an immutable ledger
Blockchain gaming and NFTs - the perfect match?
One of the most compelling reasons for games to use blockchain is because of the growing world of non-fungible tokens, or NFTs.
NFTs, which you can also call crypto-collectibles, are unique digital items that cannot be copied or interchanged.
Do you remember the game CryptoKitties? The collectibles game running on the Ethereum blockchain went hugely viral and was so popular at one point in December 2017 that it made up 10% of transaction traffic and congested the entire Ethereum network.
CryptoKitties lets players buy, collect, mate, and sell virtual cats. Each CryptoKitty is an NFT which is unique and owned by the user, validated through the blockchain, and cannot be copied or transferred to another owner without the user’s permission. Each cat carries a unique number and distinct genome with DNA and different “cattributes”, such as eye color, eye shape, fur and pattern, that can be passed onto its offspring.
The most expensive CryptoKitty called Dragon sold for 600 Ether or $170,000 at the time of the transaction. In October 2018, CryptoKitties reached the milestone of 1 million cats being bred, with a volume of 3.2 million transactions on its smart contracts.
Other forms of NFTs include in-game assets such as game skins, virtual cards, weapons and more, which end up being owned and controlled by the player instead of the game developer. In-game assets can run-up to the thousands of dollars if they are really rare, and having them on a blockchain opens up the gateway for these assets to then be traded on third-party marketplaces such as Super Rare, Wax, OpenSea and Rare Bits.
Blockchain video gaming platforms
Capitalizing on the growing blockchain gaming trend is Enjin, a blockchain gaming platform known as the “Ethereum of Gaming”. The platform gives developers and gaming communities a ready set of development tools such as wallets, plugins and apps as well as services to create and manage blockchain games, without actually writing any of their own blockchain code or maintaining any blockchain infrastructure themselves. Enjin is now the leading blockchain gaming platform with over 300,000 gaming communities and 19 million registered gamers. Other competitors in the space include Dapper Labs, Horizon, and Cocos Blockchain Expedition.
Blockchain is changing the rules of the game by solving several problems within the video game sector, including firstly, ownership.
In regular games, players purchase in-game assets with fiat money but never actually own them. They only hold a license that may be revoked by the game developer at any time. This means players can lose all their assets or currency that they painstakingly collected, if they were banned or locked out from a game.
With the introduction of blockchain-based NFTs, players will now be able to purchase and own their assets with its authenticity verified and transactions transparent on the blockchain for everyone to see. Assets can be securely stored in crypto wallets, and be safer from hacking attempts. Players can also hold and watch their assets rise in value, or trade and sell their assets on the open market as they please.
The decentralized future of gaming
Next, platform centralization. In-game assets usually belong to a single gaming platform and are not transferable from one game to the next. With blockchain technology, in-game assets may now be swapped and traded cross-chain like currencies, opening up an entirely new world for asset trading and monetization.
Finally, payment fees. Without blockchain, players and game publishers have to rely on 3rd party services such as PayPal or Visa to purchase and sell in-game assets. These services charge extra and unnecessary fees which could be eliminated or drastically reduced by using a frictionless blockchain service with minimal or no fees.
Watch out for the creation of a Gaming Multiverse – a decentralized and parallel virtual universe of all gaming worlds combined. In this ultimate gaming multiverse, players should be able to transport themselves to different worlds in order to access and trade their multiverse items, all powered by blockchain technology.
This is what the games CryptoKitties and Gods Unchained have done by providing interoperability with their in-game items. In what is a defining move for the industry in terms of crossing platforms, you can now create one talisman card on Gods Unchained for every Cryptokitty that you own, and also breed a special cat to create an ultra-rare talisman card.
Decentralizing the gaming industry would mean that your favorite games will no longer belong to a single company, but be shared among all the players involved in the game. Indie game creators and other small companies will be able to develop and co-own their games directly with their players, creating an entirely new ecosystem of creative games and communities.
But is the gaming world ready to be decentralized?
Currently, games are rapidly being developed and built on blockchain platforms such as Ethereum, EOS, Tron and Vechain, with each offering different solutions in terms of scalability, security and speed. With the undeniable benefits of blockchain, we can expect more and more games to integrate blockchain technology into their gameplay development as it becomes more accessible and sustainable for widespread adoption.
Imagine a future where gamers can traverse different universes, perform all transactions with a single universal gaming cryptocurrency and easily swap, sell and buy multi-chain digital assets across different platforms and game worlds. That will be the new frontier for the gaming industry, and it’s coming soon to a virtual world near you.
Welcome to the future of gaming. The future is decentralized. The future is blockchain.
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This content is for informational purposes only and is not investment advice. You should consult a qualified licensed advisor before engaging in any transaction.