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Blockchain to impact gaming industry
As the blockchain technology widely spreads around the world and among various domains of activity, the links between video games and a decentralized network become clearer and so do the new business opportunities around it. With its unalterable, transparent and safe ecosystem, the blockchain allows for new forms of gaming with brand new economic schemes, if not a brand new paradigm.
In this article :
Video Games: why do we need the Blockchain?
(If you are reading this article, you probably already know about the basics of how blockchain works. If not, we have a cool video on our Youtube channel that sums up everything you need to know in only 4 minutes.)
If you have already played a massively multiplayer online video game (MMO), you probably already encountered some issues that entirely ruined your experience. May it be a hacker that sneaked into your account and stole your most valuable items, or simply the closure of your favourite game’s server which lead to the loss of everything you accumulated over the years playing it. But what if I told you that the world of gaming could be much different if games were based on blockchains?
A few weeks ago, we opened a Ravencoin pool on Cruxpool, and as explained in our presentation video, it allows physical and tangible assets to be linked to unique tokens. This technology is what blockchain gaming is based on. Everything that you gather, loot or find in game is linked to a unique token that you store in a personal wallet and that entirely belongs to you. If the game’s servers closes, you get to keep everything you found. Furthermore, every item present in the game can be traded outside of it on marketplaces dedicated to players where digital currencies don’t only apply in-game anymore, but also in real life.
Blockchain to revolutionize gaming
If you understood it well, the Blockchain might revolutionize gaming by allowing players to farm a digital cryptocurrency that has real value outside of the game. But now that I caught your attention, how does this actually work?
There are many games being developed out there that are based on a blockchain, the most famous among them being CryptoKitties, a game where you can breed cats and trade them on a marketplace with other players. As small as this project is, its success and the buzzing activity around it revealed a true and raising interest for crypto gaming.
More recently, the spatial MMO Infinite Fleet raised 3.1$ million with the ambition of creating a whole economic system through the intermediary of a Non Fungible Token (NFT) called INF, that will act as the game’s currency. You might be familiar with more traditional digital currencies like gold in World of Warcraft, that only has value inside of the game. But with the INF token being a cryptocurrency, it allows the player to store its items, its vehicules, abilities and characters within an external wallet, and to buy, sell and trade such assets with other players.
Proof of Participation, Play to Earn
If we refer to Ethereum, the mining algorithm is based on a Proof of Work method where miners are being rewarded depending on the intensity of their computing power (hashrate) on the network. With Ethereum 2.0 that is yet to enter beta, we will witness the arrival of the Proof of Stake method that completely shifts current Ethereum’s mining paradigm.
In cryptogaming, players are being rewarded with coins depending on their participation to in-game events. Somehow similar to Proof of Work, you must attest that you are involved into the game enough to deserve your tokens, items, or virtual assets. This is called Proof of Participation.
At the same time, the economic model behind the game itself will be completely different from the ones we usually see today: Free to Play, Pay to Play, Freemium… We can now talk about Play to Earn. Why? Because the Blockchain technology shifts upside down the concept of ownership in a video game.
Blockchain and ownership of in-game assets
Age of Rust is a blockchain-based video game which uses the Enjin wallet, a cryptocurrency developed for video games and gaming projects in general. If we go back to our example of a traditional MMORPG like World of Warcraft, items looted and found by players are stored on the game’s servers. Even if your account is linked to your personal information, you – the player – do not own any of the items in your character’s inventory.
With the Enjin wallet, every item, vehicule or ability that you will find in-game is linked to a unique token that has a dedicated identification number. This token – which represents one of your items – will be stored directly into your Enjin wallet and you will get ownership over it, which means that you can sell them to other players outside of the game for the value set by the game’s economy itself. If the item is rare and powerful, you might earn a lot out of it. And even though crypto games are based on NFT (Non Fungible Tokens), you might be able to switch them for Bitcoins or other cryptocurrencies that you might want to hold or trade.
This whole ecosystem goes even deeper. As in-game assets are linked to tokens, they can be exported from one game to another. If a game closes its doors and another similar one opens, developers might want to allow previous players to convert their currencies into the new one and therefore gather the old player base.
Additionally, different games could create events together by creating riddles or treasure hunts requiring hints from multiple games with a big prize at the end.
A bright future for Blockchain gaming... but overly addictive?
The Blockchain creates amazing opportunities for the gaming industry. In a press release, Binance CEO Changpeng Zhao said that “The potential of blockchain and cryptocurrencies reaches far beyond the financial sector. Given the readiness of the gaming industry in its continuous evolution, especially in new technologies. Blockchain is becoming an essential part of game development and is set to change the global gaming industry.”.
In a not so distant future, we might be able to make a living by farming or trading items from our favourite virtual worlds, thanks to blockchain technology. But at times where lots of questions are raised regarding addictive behaviours around new technologies, concerns will probably raise regarding an ethical and responsible crafting method for these new tremendously immersive worlds to come.
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Nathan - Content Specialist
I’m in charge of creating content for crypto enthusiasts at Cruxpool. Also a video game, writing and role playing games lover.