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Blockchain technology is often thought of as being used solely for cryptocurrency investing and international payments.
However, its applications extend much farther into the field - including gaming. Crypto enthusiasts have welcomed blockchain gaming's arrival, while some gaming communities remain wary. This essay will examine its benefits in gaming environments such as multiplayer gaming systems like Rift/Overwatch/MMO, etc.
This essay also looks into its future potential & its many uses.
What Is Blockchain?
Blockchain is a distributed ledger technology that makes transactions safe and transparent without intermediaries intervening, building a decentralized database with the information distributed among various computers over an encrypted network of computers.
Each transaction securely saved using encryption forms one "block" within this chain, which cannot be altered once added or changed once part of it.
Gaming industry businesses and players have seen significant returns on investments made with blockchain technology since 2022; total revenues totalled USD 4.83 billion in 2022 alone.
Projections show an astounding compound annual growth rate (CAGR) from 2023-2030 of 68.3% CAGR. Blockchain's rapid rise is attributable to its profound effects. It has transformed businesses and players by seamlessly incorporating cryptocurrencies and NFTs into gaming experiences.
What Is Blockchain Gaming?
As stated, blockchain games are games that incorporate elements of blockchain technology.
NFTs allow players to sell goods to each other or exchange or vend them between game sessions; money in these games often represents digital assets, with players having opportunities to win cryptocurrency through beating levels in certain instances.
These games allow users to retain any items found while playing and are less prone to in-game item loss than traditional titles; for instance, in November 2022, Call of Duty Warzone 2.0 servers experienced latency and crashes, leading to gamers losing belongings they owned, had this game been played using blockchain instead, these assets may have been converted to NFTs that ensured their continued presence within players' wallets.
Blockchain games store player account details in encrypted ledgers for greater player security than conventional online video games that may be vulnerable to hacking attacks and reveal private information of players' accounts.
What Are Blockchain Games?
As stated, blockchain games are video games that use blockchain technology either partially or wholly to develop.
Games using it might also be known as web3 games, metaverse games, NFT games, or crypto games, depending on how specifically it's applied; all can differ significantly from regular video games in terms of the technology behind them:
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Decentralization: Blockchain games can be difficult to compromise or block since their creation and maintenance rely on multiple autonomous members who form part of a decentralized independent organization (DAO) rather than one company or other single entity.
Traditional video game developers might offer comparable blockchain titles without employing DAO management services.
- Interoperability Games built using blockchain can communicate seamlessly with each other, expanding the market for assets tied to each game.
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In-game ownership and play-to-earn incentives: Blockchain game users can win or purchase digital assets such as native tokens (NFTs).
Players may keep these assets or sell them back onto decentralized markets for fiat currency.
- User portability of data: Through blockchain gaming, players can take ownership of their data and assets and transfer them across platforms and games as needed.
How Blockchain Can Improve Gaming
Blockchain gaming presents players and game publishers alike with several distinct benefits.
Gaming environments usually place all data and servers under the sole control of a corporation that developed the game, leaving gamers no say over if and when their game will be discontinued by its maker.
Conversely, games become more robust when their assets and data are held on blockchain - this also allows users to acquire and keep them forever and use them across different games/virtual worlds, unlike traditional gaming, which relies upon subscription models or asset purchases with no transfer capabilities - providing control to users while making gameplay more captivating than its counterpart.
Additionally, the decentralized structure of blockchain games encourages greater participation by community members and individual investors.
Furthermore, such games often experience player-driven improvements due to being run by collectives such as DAOs, which solicit player feedback. These collectives also play a pivotal role in shaping blockchain gaming environments.
By nature of Blockchains' transparency and immutability, cryptocurrency games provide another advantage that builds user confidence by eliminating game manipulation.
Smart contracts use cryptography to verify gameplay behaviors for fair play in-game behavior validation.
Blockchain Gaming's Impact
Over the last ten years, blockchain games have seen tremendous popularity gains. Every prominent blockchain protocol averages more than 20 million gaming transactions every day, according to Dapp Radar; that total figure represents all blockchain use cases combined; however, its total volume still pales compared with money-related apps.
Blockchain-based games allow gamers to earn real money while they play.
Players in games such as Axie Infinity allow gamers to breed and train NFT creatures that they can then sell for bitcoin - offering appealing earning potential even though most gamers won't become wealthy. Blockchain games create scarcity for in-game goods, which opens new revenue streams for developers; furthermore, royalties from secondary sales of video game components may also benefit developers.
Advantages And Challenges Of Blockchain Gaming
Players playing blockchain games can feel confident knowing the assets they acquire while playing are theirs, unlike in traditional games where these items can only be exchanged with other players for money.
Furthermore, gaming on the blockchain also increases transparency - you can verify a developer's claim of 1,000 sets of armor being released using blockchain explorer tools.
Blockchain gaming's most significant benefit may lie in interoperability; Mike Shinoda of Linkin Park tweeted in 2022, "Imagine using your favorite skin from Valorant without spending extra.
Now use that skin across CoD, Minecraft, Twitter, and Instagram."
Shinoda's proposal would be challenging to implement successfully; nonetheless, it remains plausible. By inspecting player wallet contents, NFT games could allow players to wear skins acquired through other games, like Fortnite skins in games like Minecraft.
While implementing intergame compatibility may never happen entirely soon, the blockchain gaming sector looks poised for growth.
Blockchain gaming comes with many advantages and downsides. Due to a lack of technical understanding among gamers and creators alike, some may find themselves prevented from exploring crypto games due to setting up cryptocurrency wallets properly or using cryptocurrency as in-game money.
Before considering adding non-fungible tokens (NFTs) or cryptocurrency as game currencies in their creations, they must first learn how to connect their games to blockchain networks and gain their support.
Due to regulatory fears, many games opt against including blockchain features due to regulatory considerations. Over recent years, the Securities Exchange Commission has closely scrutinized NFT and cryptocurrency initiatives, alleging many may provide unregistered securities.
If their NFTs fail the Howey Test as defined by the Howey Test definition, an investment contract exists when money is put towards joint enterprise with expectations that an expected gain or dividends are expected in return (this process has legal ramifications). Developers risk legal repercussions for failings under the Howey Test criteria: an investment contract exists when money is invested with expectations to earn returns by both parties involved (Howey Test definition).
As games grow more popular, their transaction volumes increase accordingly. Scalability for blockchain games depends on which DLT they utilize; for optimum scaling results, these ledgers require low transaction fees and high throughput rates.
The Evolving Landscape Of Blockchain In Gaming
Blockchain technology has recently made waves in the gaming sector, revolutionizing players' and developers' gaming experiences with enhanced security, ownership rights over your assets, cross-platform compatibility, and new project funding options.
It provides enhanced security measures, ownership rights over assets, cross-platform compatibility & new project funding solutions - creating more stimulating gaming experiences overall for everyone involved in its development and playback.
β Digital Asset Ownership
Blockchain allows players to securely own, trade, and sell digital assets - giving them complete ownership of their gaming assets.
Thanks to its decentralized nature and unchangeability, players own and control their virtual goods as digital assets.
Gamers have complete freedom when it comes to playing their chosen game, even altering its features and rules to increase player enjoyment while taking full advantage of any in-game assets that exist within it.
β Transparency And Fairness
Thanks to blockchain's transparency, game results can be trusted as impartial and independent of any single entity.
Smart contracts and decentralized systems can validate game rules to build trust while eliminating cheating.
β Decentralised Gaming Platforms
Gaming platforms built on blockchain eliminate the need for intermediary services, lowering costs while giving game makers greater creative control and flexibility.
Players may interact directly with smart contracts for enhanced user experience and security.
β Play-to-Earn Model
Blockchain video games often employ a play-to-earn strategy, allowing players to exchange their time and effort for cryptocurrency or valuable in-game items.
This economic approach fosters participation and commitment among users.
β Community Governance
Decentralized governance models made possible by blockchain technology allow players to have a voice in how the game develops over time and evolves, including voting procedures that facilitate collective decision-making processes.
β Limited Edition NFTs
On the blockchain, rare or limited edition in-game products or collectibles can be represented through Non-Fungible Tokens (NFTs).
These digital assets gain value due to scarcity and help facilitate an active market for distinct virtual commodities.
β Crowdfunding And Financing
Developers can now directly tap the community for funds needed for game creation through blockchain-based crowdfunding or Initial Coin Offerings (ICOs), creating a more decentralized and community-focused funding mechanism.
Foreseeable Impact Of Blockchain
Blockchain gaming has a promising future, with significant growth anticipated over time.
Blockchain technology is gaining recognition and adoption by numerous enterprises; as traditional game makers begin using it more frequently, it could further broaden its appeal with wider audiences. Blockchain integration in eSports has led to several notable collaborations and partnerships; for example, NODWIN Gaming and RageFan joined forces to provide Chess NFTs for the 2021 Chess Super League competition, showing just how flexible blockchain tech is when applied to both competitive eSports gaming and traditional gaming alike.
Gaming apps present unrivaled creative freedom and financial rewards. Their flexibility encourages active player engagement rather than passive consumption as players buy, sell, and exchange goods between other games and platforms for greater participation in a dynamic digital economy.
This increases ownership flexibility as opposed to passive consumption by giving more ownership rights back to consumers.
Blockchain gaming apps represent a new era of cross-platform interoperability and compatibility for players of various gaming platforms, eliminating segment-specific experiences to provide one seamless metaverse where gamers can move fluidly between virtual worlds - creating an active gaming community that encourages idea exchange, friendship building, and friend-making.
As we advance into the future, industry players must recognize and harness the revolutionary potential of blockchain technology.
When implemented into gaming applications, blockchain allows gaming apps to exceed current constraints while opening up previously unknown areas for creativity and innovation.
Conclusion
Though blockchain gaming remains in its infancy, recent years have witnessed remarkable innovations. Sony recently submitted an NFT gaming framework patent application.
According to this patent application, "digital assets may be exchanged through NFT across computer simulations or platforms using NFT." Although Sony has yet to reveal plans regarding this patent application, its existence suggests interoperability may be considered for in-game items.
NFTs (No Frills Tokens) are something prominent game companies such as Square Enix have expressed an interest in including in their games, yet player announcements failed to excite players; many gaming news websites described NFTs as blatant revenue grabs; it may take some time before blockchain games become widely adopted even though they've proved successful within the cryptocurrency ecosystem.
Since blockchain gaming is relatively novel, its concept often comes with confusion and uncertainty. As more game companies enter this field in the coming years, misconceptions about it should dissipate, and widespread awareness about it will grow.
Expectations are that new online gaming platforms and evolving customer expectations will remove obstacles to The development of blockchain gaming, furthering industry expansion.
By offering players ownership over in-game items and incentives like money to participate in social interactions and earn incentives through tokenization schemes - gaming platforms may overcome certain hurdles while creating sustainable ecosystems and economies in future gaming ecosystems.
