The topic of cryptocurrency has been at the hearing for quite a long time already since 3 January 2009 when the first cryptocurrency Bitcoin was introduced. The technology behind it is believed to revolutionize the economy and bring the digital era to a new level.
The main technology that makes cryptocurrency unique is the blockchain which is a peer-to-peer mechanism for verifying information; it makes it nearly impossible to alter the data stored in a blockchain. Even though most often the term blockchain is associated with cryptocurrency, the real potential of the usage of this technology might be far vaster starting from the banking sector and to the implementations in farming.
Still, in this post, the main focus will be on the topic of how blockchain can be used in video games. First, the vast majority of online video games where players can play with other players have some sort of digital in-game currency. However, most of the time it is very time consuming to get enough of that currency to spend on in-game assets; moreover, very often it is impossible to earn this currency by following some actions in the game – the players have to spend their fiat money on that. On top of that, these in-game assets such as graphics (characters, environments, logos), background music, special effects, and sound effects will not belong to the player who purchased them – these assets are stored in the centralized storage place of the gaming industry, thus making it not a safe place for highly valuable items. Using blockchain technology, every digital asset would have a unique unalterable metadata that belongs to the user – this decentralized form of ownership will protect the users’ digital resources, consequently making the gaming industry more attracting for other users and making it more attractive for players to engage in in-game transactions. Next, the player’s digital currency and assets won’t be safe for one more reason: the gaming company may decide to launch a new version of the game or a completely new game where the previously acquired assets would become nearly priceless. In the case of the implementation of blockchain technology, a new type of game can emerge: the so-called “Decentralised App”. The code in such a case would be open-source and the game would run on a decentralized blockchain, thus the community of players would have to reach a consensus on the modifications in the app. These provide players with far better control over the game and its development.
How the in-game items can become unique and their metadata unalterable is through the usage of non-fungible tokens(NFTs), so the digital goods found in video games can be traded like more familiar traditional bonds and stocks. For example, Axie Infinity uses NFTs in its game, and the primary goal of the game is to acquire Axies, which essentially are NFTs players later on use to battle against other players. Just like stocks, Axies can be used as an item of speculation.
Despite many advantages the blockchain can bring into the video game industry both for players and developers, there are quite a few downsides. First, in case of Axie Infinity, players need to pay a minimum of 300$ as an initial investment and the whole concept of the game looks like pay-to-win. Also, many of these blockchain-backed games don’t allow their players to withdraw all the money from their accounts. It might just happen as in the case of FTX when tens of millions of dollars are stuck in the digital environment and people cannot get their money back. Fraudulent activities are not atypical when it comes to the usage of decentralized platforms and unregulated industries, even though the users’ data is encrypted and is believed to be extra-safe.
I think that the real potential of blockchain usage in video games is still undiscovered, and further research and development need to be performed regarding this matter. However, the prospects for return on investments in blockchain gaming are still looking rather attractive and the technology might become disruptive in the upcoming years.
Sources:
https://www.nasdaq.com/articles/what-are-blockchain-games
https://www.forbes.com/sites/justinbirnbaum/2022/01/06/why- video-game-makers-see-huge-potential-in-blockchain-and-why-problems-loom-for-their-new-nfts/?sh=5e41f71443d7
https://www.devteam.space/blog/how-blockchain-can-redefine-the-gaming-industry/