Blockchain and Gaming: Understanding The New Gaming Economy

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Blockchain and Gaming

Blockchain and gaming are two converging industries keen on introducing disruptive models globally. Gaming, with its rich history, comes with high expectations. On the other hand, Blockchain promises innovation – new ways of deriving benefits from gaming. Unfortunately, finding common ground for blockchain and the gaming industry hasn’t been easy.

Being a newly evolving industry niche, blockchain gaming still has a lot of ground to cover. While many people have adopted blockchain games, experts still expect more. Currently, the blockchain gaming industry is all about incentives. However, regarding gameplay experience, the industry continues to lag.

Hence, Blockchain and gaming will only be regarded as a massive success if they can combine to deliver a top-notch gaming experience as you’ll currently get from Xbox or PlayStation games. Unfortunately, compared to these current web2 games, blockchain games seem primitive.

But despite this graphics-technology limitation, blockchain technology gaming has been hugely impactful, with exciting promises for the future. Consequently, this article explores the current realities of blockchain gaming and future expectations.

Understanding the Basics Of Blockchain And Gaming

Blockchain

Blockchain technology is an innovative technology of recording and databasing, where a peer-to-peer network links a decentralized network of computers to serve as the database. Blockchains projects are distributed ledgers, and each computer on the peer-to-peer network is called a node.

Blockchain technology was made famous in 2009 by Bitcoin. Through the bitcoin blockchain, the financial industry experienced a disruption. The new technology guarantees a higher level of security and eliminates the need for trust upon knowing how to leverage the platform.

Therefore, eliminating the need for trust makes the presence of a central body irrelevant. So, once you have funds on the Blockchain, you don’t have to go through a bank before sending money to someone.

Beyond the trustless ecosystem, the data structure is another peculiarity of Blockchain. Traditional servers arrange data in tables. For blockchains, data is structured into blocks. Once a block is full, it’s added to the last block on the line, then another opens.

Information (timestamp, etc.) regarding a newly added block is recorded in all computers on the network. Hence, it’s near impossible to manipulate already recorded entries. Furthermore, the blocks are set in stone, and changing one data will require changing it on all the thousands of computers on the network. 

Thanks to its immutability, blockchain technology is used in writing smart contracts. Smart contracts are self-executing, with terms and conditions encoded into them. Once written, smart contracts continue to run once terms are met.

Summarily, Blockchain offers the following:

  • Decentralization
  • Immutability
  • Security
  • Smart contracts
  • Interoperability

Gaming

Since creating the first electronic game in 1950, the industry has come a long way. Console games characterized the early 1970s and continue till now. Then, console games were a step forward for the industry. More innovation arose steadily with mobile games from 1994 till now.

Over these 72 years, the evolution of games has been slow. But the advent of blockchain gaming companies could spell something different.  

With its sluggish innovation, the traditional game industry has always been wildly successful. In 2019, the total market size was worth $138 billion, making it a lucrative ground. But with Blockchain, the industry’s prospects have greatly improved. In the first half of 2021 alone, over $476 million were invested in blockchain gaming companies.

Such a dramatic turn of events warrants examining Blockchain’s role in the unfolding gaming revolution.

What Role Is Blockchain Playing In Gaming?

The influence of Blockchain in gaming manifests in several ways. First, the myriad of ways Blockchain can birth a gaming use case makes it a technology of limitless possibilities. Second, Blockchain’s characteristics translate into different features for gaming. A blockchain gaming platform can exhibit some or all of the following attributes.

Easier In-Game Purchase

Making in-game purchases can be somewhat tedious for both developers and gamers. The need to go through numerous 3rd party services frustrates the fast pace expected of 21st-century technologies. Blockchain truly changes that. With a crypto wallet, players can easily make borderless purchases.

Enhanced Security

A significant role of Blockchain in gaming is security. The technology features powerful data encryption. The private key-public key encryption system is used to secure every transaction. Also, because the servers are decentralized, it’s impossible to tamper with the information on the Blockchain. Each network node – server – has complete information in it.

Interoperability

Thanks to blockchain technology gaming, you can decide to use a game’s character in another game. This feature is called interoperability. Once both games are built on the same Blockchain, interoperability can exist. This works because to play crypto games, you’ll need a unique public address. Everything you own in a game is assigned to your public address. You can use your public address for any game – hence, transfer of assets between games is possible.

Intangible Assets Valuation and Protection

Blockchain gaming futures promise heavy involvement of intangible assets in everyday life. However, thanks to Blockchain, an asset doesn’t have to be tangible to be valuable. This is due to crypto elements called NFTs. NFTs are one-of-a-kind assets.

In blockchain gaming, the characters, the utilities, the rewards; everything is NFT. So when a player earns and owns these elements, he can sell them for fiat currencies.

Ownership

Ownership is responsible for the massive blockchain gaming growth in recent times. Throughout history, owning assets has been synonymous with wealth. However, not many people can afford physical assets. But now, thanks to blockchain gaming, players can earn asset rewards for their time and effort.

Players can also buy a game’s token and subsequently stake such token for a governance position. Every governance transaction is executed via smart contracts. Hence, there’s no central authority to take permission from. As a result, you can own a part of the economy at will.

Through ownership, you become a decision-maker for your favorite games. You can also collaborate with developers to improve games. You no longer consume; you contribute and participate.

Understanding The New Gaming Economy; Blockchain Games

The economy of blockchain gaming 2022 rides on rewards and incentive programs. While the new industry will continue to improve its graphical technologies, it has perfected the process of rewarding players for their time and efforts.

Before now, only the game development stakeholders accumulate the financial rewards of the economy. Therefore, all the money goes to them. However, in blockchain games, money travels both ways. Players can now earn from their in-game activities, just like developers.

Though, play-to-earn isn’t a new concept. Several traditional games allow players to accumulate resources, points, and utilities. However, all these assets belonged in-game – to the developer. Therefore, they have no real-world value.

But with the advent of NFTs, a blockchain gaming platform can now feature assets that contribute to your real-world finances. For example, players can take in-game assets to exchange platforms like Binance to sell.

Furthermore, blockchain technology in gaming now facilitates a genuinely virtual world. As a result, the Metaverse has become a hot topic of conversation, with significant companies betting big on the reality of the sub-sector.

Building virtual reality on Blockchain makes it possible for concrete interactions to occur. Rather than just exploring a company’s virtual reality ecosystem, players can now own assets in such virtual worlds. Everything inside the Metaverse is NFT, which means players can own them and exchange them at will.

Conclusion

The Metaverse is ramping up to be the next big thing in gaming – evidence of the incredible future awaiting blockchain gaming. But, there’s more to come from the blockchain and gaming industries combined. Of course, Blockchain has been influential in other sectors. But, there’s every indication that gaming will be the top industry to make millions of people adopt cryptographic technology.

Frequently Asked Questions

1. Can Blockchain be used in gaming?

Yes, Blockchain can be used in gaming. Blockchain can either be the total fundamental technology on which a game is built or used for just the in-game economy. So far, games like CoinFantasy and Axie Infinity have proved possible with Blockchain in gaming.

2. How is Blockchain used in the gaming industry?

Currently, Blockchain is used in the gaming industry mainly as an incentive infrastructure. After that, though, there are more use cases to expect. Blockchain’s many characteristics gradually influence the way the industry works, and one can only look forward to the exciting future.

3. Why is Blockchain the future of gaming?

Blockchain is the future of the internet – a major part of gaming in the 21st century. As the world continues to learn how to maximize web3, it’s only pertinent that gaming follows suit. Starting early is vital for an industry with a reputation for sluggish innovation.

4. How Big is the blockchain gaming market?

The blockchain gaming market is very vast. In 2020, the blockchain technology gaming industry had a revenue of $321 million. For a nascent sector, that’s a lot. In addition, about 41.9 million crypto gamers now own cryptocurrencies. The growth in the industry is unprecedented.

5. How Does Blockchain work for gaming?

Blockchain works in gaming to create a decentralized ecosystem, where players get to own assets and platforms while making money from the time and effort invested. No one knows the extent to which Blockchain will work in gaming, but the signs are there for exciting paradigm shifts.

6. What is a Blockchain-based game?

A Blockchain-based game is built on cryptographic blockchain technology. The game can either be fully built on Blockchain, or the tech is merely used for its in-game economy. Blockchain-based games also use NFTs to transfer in-game value to the real world. 

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