No-coiner

This one is pretty straightforward. It's a term that is used to describe someone who does not invest in crypto or is pessimistic about digital assets. They usually believe that cryptocurrencies have no use cases and therefore have no holdings, no crypto tokens, and no coins. Hence the term 'no-coiner'.

Weak hands

Weak hands is a term used to describe someone who sells their crypto holdings at the first sign of a market correction. These investors are either not entirely convinced with their strategies or are easily sceared by negative news or price action of an asset. More often than not, weak hands are the ones that trigger a sell-off and cause prices to nosedive.

Diamond hands

Diamond hands is a slang term for investors who refrain from selling their crypto holdings despite downturns or losses. These individuals are the opposite of weak hands as they remain invested through thick and thin. This is a good strategy if your investments are backed by solid research and have some use cases that will help their value bounce back after a bear run.

However, it's not always helpful to have diamond hands, especially in the case of a dead-end cryptocurrency that's on a downward spiral and has no hope of regaining its valuation.

Bagholder

Bagholder is a term used to describe an investor that holds on to their crypto assets despite a continuous decrease in their value. They are extreme diamond hands that suffer when the price of a coin crashes to zero, and they are left "holding the bag". Their only hope is that somehow the price of the cryptocurrency will make a comeback, and they will recover some of their losses, but this rarely happens. All those who chose to hold onto their TerraUSD (UST) would be examples of bagholders. Even months after the crash, TerraUSD (now TerraClassicUSD or USTC) is still worth next to nothing.

The HODLer

A HODLer will watch his coins' value double in a week or drop 30 percent in a month, yet he will never even think about selling. These investors are in it for the long run and are unphased by market conditions. Despite sounding deceptively simple, HODLing is a challenging investment strategy. You need to have immense discipline to stay invested even though you can exit your position and book easy profits in the process. However, it is also one of the most effective crypto investment strategies and has produced many crypto millionaires.

The whale

Whale is a term that is used to describe large investors. In terms of Bitcoin, anyone with over 1,000 BTC is considered a Bitcoin whale. These investors have the power to manipulate the crypto market with their transactions. If they sell a large enough chunk of their holdings, they can cause the price of a cryptocurrency to dip considerably. Conversely, if they start buying large amounts of a particular crypto, they can also cause a minor price rally. There are plenty of other fishy classifications too. For instance, a shrimp is an investor who holds less than 1 BTC, a crab holds 1 to 10 BTC, an octopus holds 10 to 50 BTC, etc.

The Bitcoin maximalist

For Bitcoin maximalists, there is no better cryptocurrency than Bitcoin. Even while the cryptoverse is full of technological advancements and innovations, they will consider Bitcoin's secure, sound concept to be the most important. These investors were inspired by the brilliance of the blockchain and Satoshi's invention. They were lured in by the technology and ended up staying for the revolution.

One of the key features of cryptocurrencies is that they are open source. This means that aggregate user data, like the number of unique addresses or the volume of daily transactions, is freely available online. But cryptocurrencies are also designed to prioritise privacy, so breaking that data down to understand demographics, or use by country, is challenging, but not impossible. We’ll explain why that is, the common workarounds and summarise the best available figures on which countries have adopted crypto the most. 

Why measuring crypto adoption by country is difficult?

Bitcoin, the first cryptocurrency, was designed to work as a new form of money, prioritising these key features:

No central authority

Open to anyone

No geographic restrictions

Private & pseudonymous

Resistant to any form of censorship

In practice, this means that you don’t have to create an account to send or receive bitcoin, in the sense that you might with a bank or payment provider. In fact, you don’t have to provide any personal information. 

All transactions are stored in a database that is shared across a distributed computer network - the Bitcoin blockchain. Transactions contain no private information and no IP addresses. This is hard for newcomers to understand in a web2.0 world where we give up some much personal information so regularly and freely allow online services to know so much about us including our country of origin.

The many thousands of cryptocurrencies that Bitcoin inspired work in a very similar way. This makes it challenging to understand where most transactions are taking place; but not impossible. This is because of the concept of pseudonymity.

How to estimate crypto usage by country

Pseudonymity is one of the least understood aspects of cryptocurrency. A pseudonym is a consistent identifier that is not your real name but might reveal your real name by association. 

As already mentioned, you don’t need to create an account to use Bitcoin. You just need a Bitcoin wallet that will generate an address - like an email address - that can send and receive funds.

That address has no identifying information. It is just a long string of letters and numbers. But if you, for example, include your Bitcoin address within your Twitter profile, as many people do, and your Twitter account identifies you, then it is simple to connect the two bits of information, revealing you as the owner of that Bitcoin address.

The same is true with the businesses that serve the crypto ecosystem, the most important being exchanges. Though you don’t need to create an account to use Bitcoin, the most common route to acquiring some is through a centralised cryptocurrency exchange, where you do need to create an account and provide identifying information.

Exchanges act as the custodian of cryptocurrency on behalf of their customers. They have ultimate control of the addresses that hold the funds but give customers access to their funds via a website or app and a personal account. 

Exchanges publicly share details of those deposit/withdrawal addresses, so it isn’t difficult to connect an exchange to a range of addresses, the activity for which is freely available because crypto is open source. 

Connecting the dots

A whole industry has grown up to derive these patterns and behaviours from blockchain usage. Blockchain analysis uses data science to make the connections between known entities - like exchanges - and the amount of crypto held in the addresses they can be publicly connected to.

Exchanges are businesses that protect their users’ data, so for blockchain analysts to break down the volume of data from an exchange by country or demographic, they need to combine it with other sources of information and make some assumptions.

Here’s how one blockchain analysis firm, Chainalysis, goes about connecting the dots. They take the known crypto activity and combine it with a Web Traffic Methodology.

An index is used because otherwise the data would simply reflect populace countries with high GDP and wouldn’t tell us anything we didn’t already know. To address that these three aspects of the trackable crypto activity are combined to create the overall index. 

the total value of crypto received by country

crypto exchanged by non-professional crypto investors (transactions <$10,000) 

P2P exchange-traded volume

These three metrics are then weighted by purchasing power parity (PPP) per capita, which measures the ability of an individual in a given country to purchase a set “basket” of goods.

The Web Traffic Methodology takes the geographic breakdown of web traffic to each exchange from public website monitoring resources like Similar Web, and combines it with other known factors:

Time zone of the crypto activity

The fiat trading pairs offered

The range of languages offered

Where the exchange is headquartered

Information provided in labels given to crypto addresses

If this sounds like a lot of guesswork, it is. The approach used by Similar Web to identify where the traffic to a given website comes from isn’t an exact science either. The approach doesn’t factor in the use of VPNs, and it gives all traffic to the exchange equal weight when in reality only a small proportion will be active users and many bots. 

What Chainalysis end up with is the best guess for an index of global grassroots crypto adoption based on their model and all its assumptions.

The Top Ten Countries For Crypto Activity

Based on their methodology, Chainalysis’s ‘Geography of Cryptocurrency Report for 2020’ ranked countries as follows:

1. Vietnam

2. India

3. Pakistan

4. Ukraine

5. Kenya

6. Nigeria

7. Venezuela

8. United States

9. Togo

10. Argentina

Source: https://blog.chainalysis.com/reports/2021-global-crypto-adoption-index/

On the face of it, the list is a bit of a surprise, but remember this isn’t measuring absolute numbers of users - which would reflect GDP per capita and population - but an index of adoption.

The top country for crypto adoption based on the Chainalysis Index is Vietnam, a young and tech-savvy country, with a speculative culture that favours gambling and investment and where remittance is an important component of GDP (just over 6% in 2020 according to World Bank data). This provides a fertile ground for cryptocurrency adoption.

India and Pakistan’s appearance in positions two and three of the global crypto adoption index shouldn’t be a surprise either. Remittance is again important in both countries which boast youthful demographics, increasing mobile penetration, and growing middle classes who are well-educated, and financially astute yet lacking in opportunities to invest in alternatives to national currencies.

Four of the countries within the top 10 - Nigeria, Venezuela, Argentina and Kenya - underline crypto’s power as a hedge against the hyperinflation each is suffering to varying degrees. 

For all the countries in the list - barring the United States - remittance makes up a significant part of GDP, for which crypto is an increasing solution competing with comparatively expensive existing options like Western Union or Moneygram.

P2P Crypto Activity

Of the three elements of crypto activity that the Chainalysis research uses, the last, P2P exchange-traded volume, is the only one that allows for breakdown by country.  P2P stands for peer-to-peer. 

The website Coin Dance pulls in data from three major P2P exchanges - Localbitcoins, Paxful and Bisq - and charts trading volume by country. That data isn’t aggregated across the three P2P exchanges listed and doesn’t include Binance P2P, which has significant volume, but it provides reliable data showing a different aspect of crypto adoption.

A P2P exchange facilitates trading directly between users and is very popular in countries where face-to-face trading is still how most commerce happens, and trust in centralised financial institutions is low. 

P2P exchanges also offer a wider variety of payment methods, again helpful in countries where the majority of the population doesn’t have a traditional bank account.

The data from Coin Dance and Chainalysis points to the importance of P2P Exchange in Africa, Asia and South/Central America, and shows how the adoption of an entirely new form of digital money is in part being driven by some very traditional values.

Survey Data

Outside of the Chainalysis methodology the most common approach to gauging adoption is through surveys. But there are numerous problems with survey data:

conclusions are drawn on small/biased samples

survey methodologies are notoriously weak

it is very hard to verify claims from respondents to proof of ownership

survey results are often used as a means to attract an audience suggesting methodologies aren’t particularly robust

That said, there is survey data that independently reaches similar conclusions to Chainalysis, lending some weight to their data.

According to Statista Global Consumer Survey, around 27 per cent of Vietnamese respondents are reported to have owned or used cryptocurrencies in 2021. While a more recent Finder.com survey (from April 2022) suggests that 26.2% of Vietnamese own cryptocurrency - behind India and Nigeria.

However, survey findings aren’t consistent with Pew Research in November 2021 suggesting 16% of Americans have invested in or traded some form of cryptocurrency, (which amounts to over 50million people) whereas Finder.com had that number at 9.5%. 

The Financial Conduct Authority, which is responsible for regulating financial institutions in the UK, conducted a survey in January 2021 which showed that 4.4% of adults owned cryptocurrency (around 2,3 million people). This again contradicts Finder,com which put adoption in the UK at 7%.

If in doubt, ask Google

If you want a simple proxy for global crypto adoption you can always base it on the number of Google searches. Google Trends shows that global aggregate interest in the term ‘Bitcoin’ is well below its peak of 2017, and over the last year is relatively flat.

Digging into Google Trend’s data by country and it is El Salvador that tops the index, unsurprising given that in June 2021 it became the first country to make Bitcoin legal tender. 

It will be interesting to see when Chainalysis update their data for 2021 and whether actual activity in El Salvador matches the demand to find out more via a Google Search. 

Nayib Bukele, El Salvador’s President, is acting as a Bitcoin ambassador on the global stage as illustrated by his welcoming representatives from 44 countries in May 2022 to share his experiences.

The current Bear Market will make it much harder for Bukele to bring more nations into the Bitcoin fold, and will even put pressure on his own decisions to continually ‘buy the dip’ but El Salvador is not alone in making Bitcoin legal tender. The Central African Republic followed in their footsteps in April 2022.

The news received a far more muted response with the motivation for the move unclear. CAR is one of the world’s poorest nations with very low internet penetration and a legacy of internal conflict much of which centres around control of its natural resources - diamonds, gold and uranium.

CAR is in a tug of war with France and Russia both of whom want greater influence. Along with many other ex-colonies, the Central African Republic’s official currency is the French-backed CAF franc so this move has been seen by some as a challenge to that historic link.

The only other country that appears in both Google Trends data for ‘Bitcoin’ searches over the last year and Chainalysis bespoke index data for 2020, is Nigeria which Learn Crypto has written about in separate blog articles. 

How to buy Bitcoin in Nigeria

The importance of cryptocurrency in Nigeria

Nigeria has a weak national currency - the Naira - suffering multiple recent devaluations and struggles with political instability. Nevertheless, it is a youthful and entrepreneurial nation eager to embrace financial alternatives. This is backed up by the Statista data already mentioned where 42% of respondents from Nigeria indicated that they owned or had used a digital coin.

Google’s data might just highlight a disconnect between a desire to understand - via a keyword search - and actual use. It is also difficult to know whether it is a ‘leading’ indicator telling is where adoption is coming, or a ‘lagging’ indicator confirming existing trends.

We simply aren’t going to know with any certainty because crypto was designed to make understanding demographic or geographic trends in use hard.

Traditional organisations are characterised by a leadership structure that is usually led by a selected few or even just a single person on top of the corporate governance mechanism. While there are benefits to this – quick decision-making processes, for instance – there are risks to allowing so much power in the hands of the few.

The concept of the decentralised autonomous organisation (DAO), popularised with the rise of blockchain technology, is touted as a solution to bad management structures that plagued traditional types of organisations. In other articles, Learn Crypto examines the DAO concept in depth and discussed the practical steps of creating a DAO.

Before committing to a completely new way of governance, however, it might be necessary to further explore the advantages of a DAO. In other words, aside from being one of the cool kids joining a DAO, what’s really in it for you?

In this article you will learn about: 

A summary of what a DAO does differently from a traditional organisation

Main benefits of DAOs 

How DAOs can benefit consumers  

How is a DAO different from other organisations?

A complete definition of a DAO in its current context can be quite difficult to make concise but we can attempt it:

A blockchain-based form of organisation that is governs itself through a community-based approach and facilitates that with a native crypto token.

It is blockchain-based because DAOs use blockchain technology. They use digital ledgers to record their history and to ensure all dealings are transparent.

It governs itself through a community-based approach because it brings together people with a shared purpose to fulfil common objectives.

It facilitates governance with a native crypto token because it is this token that determines who holds power in the organisation. Typically, the more contributions a member makes to the organisation, the more tokens they gain and with that, the more power they hold.

How do DAOs compare to traditional organisations using the same aspects?

Traditional organisations don’t have a way to show their members their dealings in a transparent and public way, at least, not in a manner that members can independently verify.

Some traditional organisations may attempt community-based approaches, but to a large degree, are controlled or led by one person or a few selected people who often make decisions without the community’s approval.

Instead of tokens, organisations might use shares to increase a member’s stake in the organisation but there are no clear ways to reward contributions with more shares.

DAOs are frequently referred to as companies that are run by code. This expression means that DAOs use smart contracts and put them in place of traditional corporate structures to coordinate the main objectives of the organisation.

Instead of people who may have hidden bias, DAOs use objective programs that execute actions when predetermined conditions are met. Hence, one of DAOs main features that stands out from traditional organisations is programmed collective ownership.

While it may sound like a lot of effort, it is generally easy to participate in a DAO since community members gain the ability to participate and decide on important matters on the basis of purchasing and holding native tokens.

There are many types of DAOs, mainly depending on their desired objectives. However, all DAOs operate in a similar manner from the technical point of view and share some common features and benefits.

Benefits of a DAO over traditional organisations

Even though the blockchain ecosystem and DAOs are still in their infancy stage, their rapid growth in recent years has attracted a lot of attention. DAOs provide several major benefits that are likely to become even more important with time, specifically in relation to traditional organisations. As blockchain technology gets more popular and user-friendly, it is likely that the customer base will expand.

1. Decentralisation 

Decentralisation’s main attraction is that it promises to make organisations much less susceptible to manipulation and corruption than traditional organisations. Especially since the late 1990s, there is sound academic evidence that proves that increased decentralisation is closely associated with decreased corruption.

This is mainly because DAOs support greater accountability and facilitate monitoring. For instance, a DAO on a public blockchain is entirely public so every user can be held accountable for their vote. A decentralising approach reduces the likelihood of collusion as well.

  “...fiscal decentralization in government expenditure is consistently associated with lower measured corruption.” -- World Bank study, 2000

This trait is tightly associated with some of the original ideals of blockchain technology. Having a decentralised governance structure also means that most managerial issues can be solved through system automation.

The focus is on attaining the highest extent of decentralisation due to each DAO’s basic principles.  

Decentralisation is also linked to the DAO’s community-based approach since community members can express their voices on the future of the organisation. Although the voting power ultimately relies on the number of DAO tokens each person holds, it could be said that voting power is fairly distributed, especially when compared to traditional corporate structures and their centralised type of leadership.

2. Community-based approach 

Many DAOs have found that, apart from the technological aspect of the equation, the DAO’s true foundation lies in its community. 

DAOs generate equal access for people anywhere in the world to join a community and connect with each other to fulfil a common purpose. Every community member gets a genuine opportunity to shape the future of the organisation in a fair manner. The decision-making process is distributed among token holders, namely community members, and not the boardroom as a classical trait of traditional organisations. 

The community-based approach is a two-way street.

For DAO members, participation in such an organisation produces the opportunity and value advantage of taking part in new projects such as creating new crypto games, novel domains, or participating in interesting investment projects.

For the DAO itself, inputs from its members could lead to innovative ideas and developments that strengthen the DAO. 

3. Equal Voting and Active Stakes 

The community-based approach leads to each community member having active stakes in the organisation. 

This perk is associated tightly with the use of DAO governance token. That is, native tokens directly imply the essential requirement for buying, holding, or spending the tokens to attain voting rights. Ideally, this leads to members being more thoughtful of the whole voting procedure and the weight each vote carries. Even though differences may arise during the voting procedure, the democratic procedure enhances equality. The blockchain technology is there only to make sure that the final agreement is being upheld and becomes part of the DAO’s regulation. 

This benefit of DAOs is also linked to advantages provided to investors. Investors are able to directly impact decisions regarding the future of their projects without the involvement of a board or similar governance structure typically associated with traditional types of companies.

The number of native tokens an investor holds determines his or her voting power in the DAO, yet each member has the opportunity to voice their opinion on novel ideas and proposals due to this decentralised governance mechanism. 

How can DAO benefit consumers?

The emergence of DAOs produced a broad array of divergent business models and the opportunity to create all types of autonomously structured and decentralised organisations run by code such as decentralised public utilities, hedge funds, and distributed venture capital companies.

As blockchain technology matures and becomes more user-friendly, the list of consumer use cases for DAO will only grow. 

With the global trend in commerce shifting towards a higher degree of consumer protection, contemporary trends like DAOs could also impact the way businesses and trends treat consumer welfare and engage with customers. The possible relationships between customer welfare and the DAO structure can, therefore, be significant considerations for businesses. 

Here are just some ways DAOs can benefit consumers directly:

Consumers can invest in a variety of businesses and ideas in an environment characterised as an equal playing field. 

Consumers can trade DAO tokens with others peer-to-peer, without any complexities regarding technical and/or financial knowledge. 

Entities will be held programmatically liable for any products that derive from a DAO crowd sale. This increases the odds of a return for consumers. 

A high degree of transparency means that investments consumers make are less risky and they will be more informed of strategic business decisions and the entire decision-making process. 

DAOs are a new way of organising online communities and businesses that no longer requires powerful leaders or authorities to lead them. Run by code rather than people, DAOs offer a new way of achieving things more efficiently, fairly, and transparently.

Even for the most amateur crypto newcomer, DAOs can be a great way to learn about crypto, while earning rewards for participating in a crypto community.

More than a third of the world’s population plays video games, with Statista estimating that the video game industry will be worth over $220 billion in 2023.

The thriving industry has been bullish for over a decade, with plenty of new areas experiencing new spurts of growth, including games based on blockchain technology.

Blockchain-based games or crypto games was already a familiar concept at least since 2016. But it wasn’t until 2021 that blockchain gaming gained momentum with so-called Play to Earn (sometimes abbreviated as P2E) games introducing online video games that used non-fungible tokens (NFTs) and cryptocurrency.

Together with a model that used player-owned economies with in-game assets represented by NFTs and tokens, gamers are rewarded for their interactions with digital money or collectibles that they could later sell for profits.

Connecting gamers with the real-world economy

This never-before-seen model turned the world of gaming on its head. 

One problem with the popular massive multiplayer online role-playing games (MMORPGs as they are known) that currently dominate the industry is that they commanded a huge unsanctioned trades market for the items they earn in game.

While many MMORPGs often had an in-game economy where players traded goods for real currency, players communicated outside the games for to make peer to peer deals, facilitating trades and deals that would normally require the game developer’s approval.

This results in punishments and sanctions on a lot of gamers who, nevertheless, still fuel the demand for underground trades.

With blockchain-based games, developers opt for the peer-to-peer market. They may host marketplaces but also encourage players to trade on external marketplaces. Here, the blockchain is the enabler. It stores the items, and it also facilitates the trades, just as you would send and receive any other token or cryptocurrency.

Essentially, there would no longer be underground markets in play-to-earn games and P2E gamers were formally connected to a real-world economy.

What does a Play-to-Earn game do?

Play game, earn money

While gamer ownership and an interface with real-world economy were the breakthrough principles, the real success of play-to-earn games is simply this: get someone to play a game, and they get money.

At its most basic form, a play-to-earn game is simply an online game using some form of blockchain technology that allows its players to earn for their playing time. Players are usually rewarded with real cryptocurrency of value, or other tokens that can be exchanged or sold for real money.

Thus, it’s hardly uncommon to find that the majority of users in a play to earn game aren’t normally gamers in the first place, but crypto investors and speculators who are there purely for the interest in earning.

A metaverse staple

Play-to-Earn has become a main component of many virtual worlds online – and are at least an aspect of most metaverses built on blockchain. As such, almost any kind of crypto metaverse online has its own form of cryptocurrency and various modes of games that essentially remunerate users for their time and effort spent on the platform.

In fact, since 2021, the majority of decentralised applications or Dapps that have seen the most activity (in terms of transactions on the blockchain) are in the play-to-earn category. The crypto bull market of that period was marked by a huge influx of users playing games to try and earn real money, either by directly generating more crypto with gameplay, or by creating game NFTs of particular rarity that can be sold for profits on digital marketplaces.

In this way, play-to-earn games opened a new type of gaming ecosystem where users had built-in ownership of the game currency and items. Blockchain networks not only hosted the game, but built a direct connection to a larger, interspersed digital economy that reflected real-world value.

How does play-to-earn gaming look like?

Because these P2E games are actually crypto-enabled games, to start playing them, you would need a Web3 wallet. This often works as a login mechanism instead of typical username and password accounts, although many games do allow a form of both types of login.

The reason for a Web3 wallet is simply to keep track of player interactions – with most actions recorded as crypto transactions on the blockchain. Most of this happens behind the scenes, so as a game, they don’t look or feel different from conventional video games.

Depth

The major difference with P2E video games when compared to regular digital games is that they are much simpler on the surface. While a major video game title might spend a lot of effort on plot and storyline, P2E games tend to be shallower in these areas.

Generally, there is the briefest of storylines and plots accompanying P2E titles, and players should expect to be able to dive right into the game after playing a tutorial.

When titles do become popular, game developers then spend time to retroactively build a universe (or metaverse) around the gameplay.

Time-intensive

Since the whole point of P2E games is to encourage players to spend more time in the hopes of earning more money, they also tend to feature simple and repetitive tasks. Monsters do become tougher and missions become more difficult but the solution is usually to invest more time. In other words, P2E gamers should get used to “grinding” or playing more and more hours to overcome increasingly difficult obstacles.

One of the drawbacks of this is a phenomenon common to traditional games that also feature repetitive level-up sessions – where players use automated scripts or bots to play the game endlessly. So instead of meeting other players as the games are designed to be, you may very well end up meeting lots of players using automated scripts. These are usually referred to as “bots”.

Multiplayer

Unlike traditional video games that command such popular followings that they’ve become profitable franchises, all P2E games at the moment are multiplayer. While some titles are working towards longer plot- and mission-based storyline games, even these will feature multiplayer aspects, with a heavy focus on on player vs player (PvP) modes.

In fact, most P2E games will invest heavily into PvP features, to encourage players to outdo each other by collecting more powerful items and equipment or by creating rarer characters with unique traits to gain the advantage over their fellow gamers.

Social

P2E games require many gamers to be successful. After all, if there is no one to beat, then what’s the point of playing? And if there are no players, then there is no demand for the in-game currencies, tokens, items or characters. What’s there to earn if no one is willing to pay the profitable price?

As such, many P2E communities gather online – usually in crypto-friendly platforms like Discord, Telegram, and Twitter. In fact, it is not uncommon for crypto communities to be found in P2E communities – the speculative interest in P2E earnings being a major driver.

Just as with regular gaming, there are also plenty of P2E guilds set up precisely to try and gather communities of gamers together to earn collectively. You can loan powerful items to get a kickstart to your campaign, rent out your own items for money, even join competitions with fellow powerful players to win contests.

Pay to play

One of the main complaints for many new users when it comes to play-to-earn games is that many of them have a high cost of entry.

This is because to even play them, users need to purchase NFTs as starting characters, usually because these characters are needed to either fight or breed new characters in the game.

For popular games, NFT starter packs can be quite expensive, with some titles like Axie Infinity costing a minimum of $300 at some point during peak crypto prices.

This led to play-to-earn gaming titles being labeled by some as “pay to play”.

P2E concept summary

As you can see, the potential to earn real money from a casual activity like gaming makes P2E a highly attractive prospect. However, all of these P2E game characteristics have led to many in the gaming community to draw unsavoury comparisons with mobile gaming (games that are made only for mobile phones). 

Like many mobile games:

there are weak in original gameplay and plot,

they require a lot of time investment to complete mindless tasks countless times,

they are focused on multiplayer aspects with little attention to single-player experiences

They contain a lot of social elements

They favour players who are willing to pay

Another thing about P2E games is that they must interact with their blockchains, so you must always be connected to the internet for the game to work.

The magic stuff: in-game currency and in-game assets

Right, now let’s get back to the “earn” aspect of play to earn or P2E.

Play to earn games aren’t a complex concept but the earning aspect may not be immediately apparent.

Because all of the gameplay is centred around making money, the point in many of these games is for the player to get their hands on potentially rare (and, therefore, valuable) in game assets. These assets can range from skins (think of them as special costumes for your game character or avatar), cards (that denote special traits or statistics that make your character stronger or more powerful) or even specific types of points or game currency.

What’s important to note is that these games only churn out these rewards in relatively tiny amounts for their participation in all manners of tasks. The idea is to repeat the tasks many times to get a significant amount.

Each asset is usually generated randomly by some kind of player interaction. For example:

You can win points by defeating game monsters or other players. The more you win, the more points you have. These points can be used to buy better equipment or exchanged for cryptocurrency.

You can “breed” new characters from existing ones, attempting to replicate rare traits in the offspring. You usually need more points or new characters to breed. The more often you breed, the likelier you are to create a rare character.

You can buy virtual land that either generates points passively or is desirable itself in location in the virtual world. You earn when you flip the virtual land, or rent it out. This is the concept in many early blockchain-based games that bill themselves as metaverse games.

The earning parts come in at various points throughout the game. Most tasks can be done all the time, but there are typically special time-limited events or contests that allow players to earn boosted rewards for a specific period of time.

Some methods are more direct, such as exchanging earned points for cryptocurrency. Other players focus on creating or collecting in-game items (which are generated as NFTs) and then selling them on third-party marketplaces for actual crypto. An NFT marketplace can exist within the game itself or externally, such as on OpenSea. Here, you’ll find people listing better equipment, unique skins, and rare characters, in the hope that other gamers will buy them (since buying is a quicker way than investing time to create these random items).

The different earning approaches

While it’s not really important for the player to know, it might be helpful to understand the two different approaches from the perspective of play-to-earn game developers.

Native Cryptocurrency

The first approach is for developers to create the game’s own native cryptocurrency or token.This then needs a blockchain project developers, making their own design, and creating their own smart contracts. They would also need to create trading markets for these tokens – typically on decentralised exchanges

Learn more about decentralised exchanges or DEX in this Learn Crypto article: “What are decentralised exchanges? DEX explained”.

In this way, the game’s players earn a unique cryptocurrency that acts just like any kind of in-game money, with the exception that they can actually be traded outside on exchanges and, therefore, have real-world value.

One of the first play-to-earn games to gain prominence is Axie Infinity, which uses this approach to create not one, but two native cryptocurrencies: Smooth Love Potion tokens (SLP) and Axie Infinity Shards (AXS). Both these tokens exist on the Ethereum blockchain.

One advantage of native cryptocurrencies lie in recognisability – anyone would know SLP and AXS come from the game Axie Infinity. On the other hand, because these are essentially alternative cryptocurrencies, with no other intrinsic value other than their in-game utility, their value, reflected in price, relies heavily on how much demand there is for the game itself.

As with many games, including Axie Infinity, once gamer activity or user counts start falling on the game, price tends to drop drastically. Price crashes then cause further gamers to leave the platform, as profitability falls, leading to a vicious cycle.

Existing Cryptocurrencies

The second and less popular approach is simply for the game developer to adopt an existing cryptocurrency. This means choosing to reward their players with recognised crypto such as Bitcoin and Ethereum.

The obvious benefit of choosing this approach is that the game doesn’t have to spend any effort on marketing their own crypto, or creating blockchain projects around them, or creating and maintaining trading markets for them.

For those familiar with crypto already and already holding in these established cryptocurrencies, the fact that they can earn these crypto directly instead of needing to trade native tokens in the open market can also be plus points.

In the early days of blockchain gaming, this was the typical earning route for many blockchain projects. CryptoPunks and CryptoKitties, while themselves emerging long before the term play-to-earn was coined, were among the first to use NFT collectibles in blockchain games. Both chose to use Ethereum as their currency of exchange (though, formally, they only sold NFTs).

How do I start playing play-to-earn games?

As mentioned previously, the very first step is to get a crypto wallet that’s able to connect you to a blockchain game.

Learn Crypto Academy quests are the perfect place to start learning how to do this – complete the first quest and you’ll have a Web3 wallet that’ll let you play a blockchain-based game to earn rewards.

However, be aware that there is no quick route to riches from playing games. While this article discusses how these games work, there is much to be said about their true earning potential.

Essentially, earning from these games may be straightforward, but profitability is not guaranteed, particularly as you’ve to invest a considerable amount of time and effort into games that may lack the enjoyability and quality of conventional gaming.

What is virtual real estate?

Virtual real estate can be defined as intangible virtual properties that are made accessible for purchase and investment on the blockchain. Virtual property essentially refers to intangible objects that can be traded in the real world for fiat money or cryptocurrency.

For example, you may trade papers, high-ranking websites, and domain names.

When it comes specifically to virtual real estate, you can obtain plots of land in the metaverse with the purpose of developing property or creating income-generating properties such as leasable buildings or interactive venues.

For crypto and metaverse newbies, virtual real estate can sound like an oxymoron since it requires the blending of physical property and the digital environment. Even though blockchain-based real estate in the digital realm is not quite physical, it provides the same thing to the person purchasing it – the right of ownership to a space.

The fact that there are even virtual real estate developers providing leasing and selling services, advertising these virtual spaces just like regular realtors would, proves that the concept strikes a chord with consumers.

What is metaverse real estate?

The term metaverse has been tossed around a lot recently.

Ever since Zuckerberg introduced Meta, the notion of a digital world gained massive popularity. It has been obvious from the start that the metaverse will expand markets, soften or totally remove barriers to entry and provide new revenue streams. 

The metaverse consists of platforms that make it possible for people to build up fulfilling virtual livelihoods. From video games, marketing, art galleries, shopping centres to business meetings and sport events, the metaverse can provide pretty much everything.

Virtual land represented by NFTs 

By adding real estate to the metaverse, the virtual world became a three-dimensional space. Real estate in the metaverse is essentially a non-fungible token (NFT) that provides the holder with virtual proof of ownership over land in the digital environment.

Digital land in each metaverse platform is limited to a particular set of numbers similar to real world transactions. That is one of the reasons the metaverse real estate market experienced a sudden boom since investors wanted to get their foot in the door before they lose the best spots. After all, the ‘location location location’ mantra of traditional real estate comes in handy here as well.

For example, Snoop Dogg's digital real estate attracted a lot of people so Snoop Dogg soon got a neighbour at the Sandbox metaverse that paid the price of $450,000 for a piece of land.

Since virtual real estate is secured with digital proof of ownership in metaverse platforms in the form of NFTs, your purchase is recorded on the blockchain. Therefore, similar to the real world, there is a title for each piece of real estate or land with recorded sales and valid proof of ownership.

Two types of virtual properties in virtual worlds

To explain the matter further, there are two types of properties you can purchase in the metaverse, namely lands and estates. Digital land, as the name suggests, refers to a broad empty virtual space with nothing on it. On the other hand, estates refer to properties that encompass a plot of digital land plus something extra on the land.

Just as in traditional real estate, extras can be, for example, all sorts of buildings, billboards or parcels of land that are joined together. 

How Does Virtual Real Estate Investing Work?

Metaverse real estate is a virtual ecosystem in which novel technologies such as augmented and virtual reality blend together to provide a real-world experience to users.

Some major decentralized platforms for buying and selling virtual lands are Decentraland, Otherside, Somnium Space and the above-mentioned Sandbox. These are all competitive metaverse platforms that pose interesting prospects in the virtual real estate market.

Limitless possibilities, limited plots in the virtual world

We mentioned that similar to traditional real estate, metaverse real estate is not unlimited. This comes to many as a surprise as it would be logical that a digital space created by developers has the capacity to expand without any limits.

However, that is not the case as the amount of digital property is determined beforehand by creators of the metaverse. Metaverse real estate derives a good portion of its value from its scarcity feature. In simple words, if it is limited it is more valuable. In that way, it resembles the traditional real estate market.

If the metaverse-based real estate market was limitless, it wouldn’t hold any real value and investing in it wouldn’t be a good option. Moreover, most metaverse platforms are not under the control of a central authority. Instead, decentralised autonomous organisations (DAOs) govern them. Hence, even if the developers decided to expand the land and estates on the platforms, the DAO would still need to say yes to such a move. 

Trading virtual real estate in the metaverse is really not that difficult. Most platforms can be easily accessed with a laptop or desktop computer, and it is really simple to examine offered virtual property.

The first thing you need to do is to find a piece of virtual estate you like on the chosen platform. The second step requires opening a digital wallet in which you store your digital assets and the cryptocurrency you use to purchase the virtual piece of real estate. For example, if you are on the Decentraland platform, you will need to purchase MANA coins, and if you use Sandbox, you will need SAND coins.

Once the cryptocurrency is in your digital wallet, you can proceed with the purchase. The platform needs just a few seconds to verify the transaction and once that is done, consider that the virtual property is legally yours as it is backed up by an NFT as proof of ownership. 

Pros and Cons of Virtual Real Estate Investing

Usually, investments come along with pros and cons. Investing itself is a risky move, but sometimes high risks lead to great rewards.

Similar to the traditional real estate market, the virtual counterpart comes with a bunch of promising features. Without the issues of months of construction, a new revenue stream has been opened worldwide.

For example, you can earn by leasing out your virtual property to companies or brands that need a virtual working space in the metaverse. Taking into account that the supply is limited, if you get your hands on a good location in the metaverse, the investment should be paid off and more.

Additionally, you can sell your land for a price you dictate. Further, purchasing virtual real estate is very accessible since anyone can invest. In addition to its flexibility and decentralisation, there are less barriers to entry. 

Even though it sounds exciting, investing in virtual real estate has its cons as well. It is still considered as a risky investment because the metaverse is still in its infant phase. Many consider it to be a highly speculative platform as no one can know what will happen in the next few months.

Taking into account that platforms run on cryptocurrencies and the crypto market still being very volatile, the virtual real estate market within the metaverse is not yet a market with a high degree of stability.  

Why invest in virtual real estate?

Even though the metaverse is still in an early phase, many believe that the increase in real estate purchases in the virtual environment will make it more lucrative over time.

Digital real estate may turn out to be even more profitable than traditional real estate if you take into account that they provide rental revenue and serve as scarce resources in a market that is growing and attracting a lot of attention.

It is a fascinating time to be alive. So many young people are diving into the so-called metaverse to play video games, socialise and even date, while many others from earlier generations are struggling to even understand the concept of living online.

This knowledge gap – a result of digital technologies emerging at pace – forces us to keep on our toes. Those that can’t keep up, easily lose track of what is happening. That’s the thing with metaverse – many people still cannot understand its meaning, purpose and use (and experts can’t really agree on what it really is).

Not that a firm definition is important. Money is already being spent in the metaverse, and commerce is blind to the intricacies, interested only in taking its share of the pie.

And if there is one particular generation that companies and brands are targeting, it is the one with the most disposable income and the most willingness to open their purses – enter Generation Z.

Generation Z (also known as Gen Z/Gen Zers) refers to people born roughly between the period 1997-2012, following the millennials. 

Well past the dawn of the Internet, Gen Zers were practically raised online so it is not out of the ordinary that they represent 60% of metaverse users. Growing up in the times of rapid technological advancements made them easily adaptable to such virtual spaces.

In this blog post we explore this group of people’s main characteristics and how brands can use their large presence in the metaverse to connect with them… and the other way around.

What is Generation Z (Gen Z)?

Already representing the youngest, most ethnically different generation in US history with 27% of the population, Gen Zers are being raised in the midst of technological innovations, internet and social media. A frequent stereotype is them being addicts to technology or being anti-social. The 2000s saw the youth becoming more introverted in real life, but the trend didn't continue on the Internet. Instead, tech-savvy new generations are moving their social life to virtual space.

Before calling out Gen Zers for being tech addicts, we should keep in mind that technology is a generation-shaping consideration. For decades, technology had a big impact on how people communicate and interact.

For instance, baby boomers grew up in times of television expansion and that had an impact on their livelihoods and connection to the world. Millennials have led older generations in technology adoption and embracing digital innovations.

The term metaverse came into existence prior to the birth years of Generation Z, coined in Neal Stephenson's 1992 science fiction novel Snow Crash. In it, humans, in the form of programmable avatars, interacted with each other and software agents within a three-dimensional virtual space that closely resembles the real world. Many years later, the Gen Zers claim to feel more like themselves in such a digital environment.

While it is not right to generalise, recent research can provide us some insight into the main traits of Gen Z. Razorfish and VICE Media Group findings on Gen Z gamers brought to the table some interesting acknowledgements about these young people, their habits and perspectives. 

They discovered that Gen Zers in the metaverse have been six times more likely to describe themselves as introverts as opposed to extroverts. Half of them stated that they felt more like themselves in the metaverse as opposed to real life. Furthermore, 65% of them claimed that online relationships are just as meaningful as real-life ‘offline’ relationships are. And lastly, many respondents stated that gaming enhanced their mental health.

The research brings up the conclusion that Gen Z spends more time within the metaverse, and more importantly, develops meaningful connections to the idea of online identities. The purpose of the findings was to help brands to connect with this generation within the metaverse and through their top activities such as gaming. 

The results of this study are in line with another one conducted by Deloitte in 2021. More than two thirds of respondents stated that they considered themselves games as opposed to millennials or Generation Y whose number one hobby turned out to be watching tv shows or movies. Post millennials still love to binge watch television but that's a fifth-place hobby to them. 

Additionally, in contrast to previous generations, Gen Zers prefer streaming services to traditional cable and getting content down on their cell phones. The average person in the study got their first smartphone just before their 12th birthday. The new generation communicates primarily through social media.

Another metaverse-related study concluded that a broad majority of Gen Z, and even millennials are engaging activities within the digital environment. Half of the respondents said that they socialise with friends through online gaming. That is different from how older generations used to socialise in the physical world

Interestingly, although the survey stated that millennials buy more cryptocurrencies or NFTs than Gen Z, the younger generation expressed their desire to shop within the metaverse.

Brands in the Metaverse

For decades, companies and retailers have capitalised through economies of scale. Currently they may have to accept a two-track and consumer-oriented model; the first relating to scale and mass consumption, and the other for customization catering to specific groups of consumers.

Many brands have been leaping into the metaverse since it has been forecasted as the future of social media providing another reality where users can socialise, play and exchange transactions. For brands, this is a huge opportunity to monetize, build up a wider customer base and set their digital footprints. Many brands are seeking to find out what the metaverse can do for their brands and how to reach a bigger audience.  

Considering that Gen Zers are the majority of the metaverse population, brands are seeking to adopt new strategies to approach them. The number of studies and surveys on Generation Z are doing exactly that. Generational cohorts give researchers a tool to analyse changes in views over time. In this way, they can provide a manner to understand how divergent formative experiences interact with the life-cycle process such as technological and social shifts. Such data is valuable for brands to realise how to interact with a particular generation.

A recent survey of 4,600 business and technology leaders conducted by Accenture showed that 71% of executives believe that the metaverse will have a positive impact on their company, yet only 42% of them stated that it will be a major breakthrough.

One of the most basic manners that brands can get started in the metaverse is by taking full advantage of the gaming industry, either by partnering up with video games developers or even creating their own video games within the metaverse.

How can Gen Z connect with brands in the metaverse?

Playing games in a virtual world and socialising with friends online were the most popular experiences that consumers were interested in within the metaverse. A worldwide February 2022 survey found that Gen Z and Millennials were generally most interested in metaverse activities.

Virtual concerts of a favourite musical artist were another potential activity that users were extremely or at least very interested in, with 37% of Gen Z and 38% of millennial online users stating so.

After discussing studies on Gen Z main traits and their main conduct within the metaverse, let's take a look at how they shop.

An experimental e-commerce platform with virtual stores in the metaverse, Obsess, created a study to examine customer perspectives on shopping. In relation to Gen Zers, the consumer survey discovered that 75% of them have purchased a digital asset within a video game at least once.

Furthermore, 41% of them think that metaverse shopping options give customers a convenient environment to buy digital items and tangible assets that can be used in the physical world. 

Gen Z gamers prefer gaming content that has good social features, interacting with other Gen Z consumers on online gaming community sites

The data indicates that the majority of youth wants to be able to reach their favourite brands and products anywhere in the online environment. Growing up with online video games, social media and esports, young consumers are open to the idea of a modern-day shopping mall placed within a virtual world where they can shop and socialise.

Can Gen Z and brands connect through gaming?

Since most Gen Zers consider themselves gamers, connecting through gaming sounds as a reasonable strategy for a brand to pursue. Nearly two-thirds of Gen Zers who have heard of the metaverse think of it as the future of e-commerce and stated they will be open to transacting within it once digital avenues become accessible. 

Gen Z gaming and Gen Z gamers

We already know that most Gen Zers spend their free time playing video games. If you need a good practice example, take a look at Roblox and Fortnite. These online gaming platforms are at the forefront of the revolution. A good reason for this is that the online gaming environment already has all the technology and infrastructure needed to host events with many people and a built-up customer base. In other words, they are in a good position to capitalise on new forms of interactions.  

Taking all these findings into account, it actually makes sense that gaming and the concept of metaverse go hand in hand. Most marketing efforts related to the new generation, their main activities and the metaverse could easily fit into definitions of Web2, such as centering around multiplayer video games that have already been with us for years. This is particularly important today because true Web3 applications are still rare and limited to early adopters.

For example, Roblox is an established video game platform with a user base adding up to 52 million daily active users. It would be a challenge to find a single Web3 app with a fraction of those numbers.

Whether the metaverse will be a major breakthrough or not, it cannot be denied that most of Gen Z is already there and actively participating. Being in virtual spaces seems almost as home to the new generation.

Another point that can be highlighted here is that for them, gaming is the norm that brought them to the metaverse. Brands should focus on meeting the new generation exactly where they are now – playing games in the metaverse.

It is a fascinating time to be alive – while a bunch of young people have dived into the metaverse to play video games, socialise and even date, some other generations cannot even understand the concept.

We may refer to this phenomenon as a knowledge gap in which the use of digital technologies has taken its toll. Innovative technologies have been keeping us on our toes constantly. Those that can’t keep up, easily lose track of what is happening. That’s the thing with metaverse – many people still cannot understand its meaning, purpose, and use. However, the truth is that money is being spent in the metaverse. 

Generation Z (also known as Gen Z/Gen Zers) refers to the generation born in 1997-2012 following the millennials. Gen Zers were practically born and raised online so it is not out of the ordinary that they represent 60% of metaverse users. Growing up in times of rapid technological advancements made them easily adaptable to such virtual spaces. In this blog post you will learn about Generation Z, their main characteristics and how brands can use their large presence in the metaverse to connect with them and the other way around.

What is Generation Z (Gen Z)?

Let's start with a few words about Generation Z. The generation that came after millennials (people born from 1981 through 1996) represents the youngest, most ethnically different generation in American history with 27% of the population. Being raised in the midst of technological innovations, internet and social media, this generation has frequently been stereotyped as addicts to technology and/or anti-social. The 2000s saw the youth becoming more introverted in real life, but the trend didn't follow up on the internet. Tech savvy new generations are moving their social life to virtual space.

Before calling out Gen Zers for being tech addicts, we should keep in mind that technology is a generation shaping consideration. For decades, technology had a big impact on how people communicate and interact. For instance, Baby boomers grew up in times of television expansion and that had an impact on their livelihoods and connection to the world. Millennials have led older generations in technology adoption and embracing digital innovations. The term metaverse came into existence prior to the birth years of generation z. Namely, the term was coined in Neal Stephenson's 1992 science fiction novel Snow Crash, where humans in the form of programmable avatars, interacted with each other and software agents within a three-dimensional virtual space that closely resembles the real world. Many years later, the Gen Zers claim they feel more like themselves in such a digital environment.

While it is not alright to generalise, a few recent research can provide us some insight into the main traits of Gen Z. Razorfish and VICE Media Group research on Gen Z gamers brought to the table some interesting acknowledgements about these young people, their habits and perspectives. Namely, Gen Zers in the metaverse have been six times more likely to describe themselves as introverts as opposed to extroverts. Half of them stated that they felt more like themselves in the metaverse as opposed to real life. Furthermore, 65% of Gen Zers claimed that online relationships are just as meaningful as real-life ‘offline’ relationships are. And lastly, many respondents stated that gaming enhanced their mental health.

The research brings up the conclusion that Gen Z spends more time within the metaverse, and more importantly, develops meaningful connections to the idea of online identities. The purpose of the findings was to help brands to connect with this generation within the metaverse and through their top activities such as gaming. 

The results of this study are in line with another one conducted by Deloitte in 2021. More than two thirds of respondents stated that they considered themselves games as opposed to millennials or Generation Y whose number one hobby turned out to be watching tv shows or movies. Post millennials still love to binge watch television but that's a fifth-place hobby to them. Additionally, in contrast to previous generations, Gen Zers prefer streaming services to traditional cable and getting content down on their cell phones. The average Gen Z got their first smartphone just before their 12th birthday. The new generation communicates primarily through social media.

Another metaverse-related study concluded that a broad majority of Gen Z, and even millennials are engaging activities within the digital environment. Half of Gen Z respondents said that they socialise with friends through online gaming. For example, that is different from how older generations used to socialise. Namely, previous generations socialised specifically in the physical world. Even though the survey stated that millennials buy more cryptocurrencies or NFTs than Gen Z, the younger generation expressed their desire to do shopping sprees within the metaverse. 

Why should a brand get in the Metaverse?

For decades, companies and retailers have capitalised through economies of scale. Currently they may have to accept a two-track and consumer-oriented model - the first relating to scale and mass consumption, and the other for customization catering to specific groups of consumers. Many brands have been leaping into the metaverse since it has been forecasted as the future of social media providing another reality where users can socialise, play and exchange transactions. For brands this is a huge opportunity to monetize, build up a wider customer base and set their digital footprints. Many brands are seeking to find out what the metaverse can do for their brands and how to reach a bigger audience.  

Considering that Gen Zers are the majority of the metaverse population, brands are seeking to adopt new strategies to approach them. The number of studies and surveys on Generation Z are doing exactly that. Generational cohorts give researchers a tool to analyse changes in views over time. Namely, they can provide a manner to understand how divergent formative experiences interact with the life-cycle process such as technological and social shifts. Such data is valuable for brands to realise how to interact with a particular generation.

A recent survey of 4,600 business and technology leaders conducted by Accenture showed that 71% of executives believe that the metaverse will have a positive impact on their company, yet only 42% of them stated that it will be a major breakthrough. One of the most basic manners that brands can get started in the metaverse is by taking full advantage of the gaming industry, either by partnering up with video games developers or even creating their own video games within the metaverse.

How can Gen Z connect with brands in the metaverse?

Playing games in a virtual world and socialising with friends online were the most popular experiences that consumers were interested in within the metaverse. A worldwide February 2022 survey found that Gen Z and Millennials were generally most interested in metaverse activities. Virtual concerts of a favourite musical artist were another potential activity that users were extremely or at least very interested in, with 37% of Gen Z and 38% of Millennial online users stating so.

After discussing studies on Gen Z main traits and their main conduct within the metaverse, let's take a look at how they shop. An experimental e-commerce platform with virtual stores in the metaverse, Obsess, created a study to examine customer perspectives on shopping. In relation to Gen Zers, the consumer survey discovered that 75%of them have purchased at least once a digital asset within a video game. Furthermore, 41% of them think that metaverse shopping options give customers a convenient environment to buy digital items and tangible assets that can be used in the physical world. 

Gen Z gamers prefer gaming content that has good social features, interacting with other Gen Z consumers on online gaming community sites

The data indicates that the majority of youth wants to be able to reach their favourite brands and products anywhere in the online environment. Growing up with online video games, social media and esports, young consumers are open to the idea of a modern-day shopping mall placed within a virtual world where they can shop and socialise.  

Can Gen Z and brands connect through gaming?

Since most Gen Zers consider themselves gamers, connecting through gaming sounds as a reasonable strategy for a brand to pursue. Nearly two-thirds of Gen Zers who have heard of the metaverse think of it as the future of e-commerce and stated they will be open to transacting within it once digital avenues become accessible. 

Gen Z gaming and Gen Z gamers

We already know that most Gen Zers spend their free time playing video games. If you need a good practice example, take a look at Roblox and Fortnite. These online gaming platforms are at the forefront of the revolution. Namely, the online gaming environment already has in store all the technology and infrastructure needed to host events with many people and a built-up customer base. In other words, they are in a good position to capitalise on new forms of interactions.  

That said, it actually makes sense. Gaming and the concept of metaverse go hand in hand. Most marketing efforts related to the new generation, their main activities and the metaverse could easily fit into definitions of Web2, such as centering around multiplayer video games that have already been with us for years such as Roblox and Fortnite. For example, Roblox is an established video game platform with a user base adding up to 52 million daily active users. Namely, true Web3 applications are still rare and limited to early adopters.  

Whether the metaverse will be a major breakthrough or not, it cannot be denied that most of Gen Z is already there and actively participating. Being in virtual spaces seems almost as home to the new generation. Another point that can be highlighted here is that for them, gaming is the norm that brought them to the metaverse. Brands should focus on meeting the new generation exactly where they are now – playing games in the metaverse. 

Play-to-Earn model (P2E)

Most blockchain games these days incorporate the Play-to-Earn model as a novel and innovative method of gaming. The new model encompasses a totally different gameplay structure than that of traditional video games.

As the name suggests, the traditional Pay-to-Play gaming mode requires players to invest before they can start playing the game. For example, the popular video game Call of Duty required gamers to purchase licences or subscriptions. The Pay-to-Play model did nothing to provide financial opportunities or returns to gamers. 

The blockchain technology emerged as a game changer as it managed to give gamers full control over their in-game items and provided new revenue streams. Before blockchain gaming came into the picture it wasn’t possible to exercise ownership rights over in-game digital assets. Now you have the ability to own in-game assets and sell them to other players due to smart contracts, NFTs and the blockchain technology as its cornerstone. 

Most GameFi projects still require players to purchase crypto assets to start playing and earning. However, there are some P2E games that are free to play and still provide the possibility to gain financial rewards.  

If you are interested in the P2E concept and how gamers earn money doing the thing they love, why not read this article: “What is Play to Earn?”

How does GameFi work?

The new concept has gained popularity due to the potential to earn income, either actively or passively, while having fun in a virtual realm. The integration of gameplay, NFTs, and decentralised finance delivered an enhanced gaming experience with many opportunities to capitalise on. 

Rewards in GameFi come in many different forms, such as cryptocurrencies or in-game digital assets such as plots of virtual land, weapons, clothing, and avatars. Each GameFi project usually has a divergent model, game economy, and tokenomics. There are some similarities though if we consider the technical perspective. 

Digital assets that can be obtained while playing are essentially NFTs running on the blockchain. Such rewards can be earned by completing various tasks, building structures on a digital plot of land, or battling other players. 

NFTs can be then traded on NFT marketplaces. If you want to learn more about NFT marketplaces, you can read this article: “What is an NFT marketplace?”

There is also a possibility to earn passive income in some blockchain-based games. In other words, players can earn passive income by lending their in-game digital assets to other gamers or by staking. The ability to earn passive income expanded the user base of many P2E games. 

Additionally, keep in mind that there are particular GameFi ecosystem fees. Namely, GameFi charges a variety of fees such as trading and yield fees for the GameFi marketplace and the earning program and acceleration fees for launchpad and accelerator. All these fees are invested into the GameFi ecosystem to keep it up and running.

To explain the GameFi concept further, we are going to examine GameFi's main components.

Blockchain technology

Blockchain technology is the foundation of GameFi projects and the P2E model. A large majority of blockchain-based games are built on the Ethereum network. However, GameFi protocols such as Solana, Polygon, and Polkadot have gained a lot of popularity due to their higher degree of capacity and speed characteristics.  

Since blockchain technology is the cornerstone of GameFi, all other important features emerge from it. Running a video game on a blockchain’s distributed ledger enables ownership over digital assets and transparent transactions via smart contracts. 

NFTs and Digital Ownership of In-Game Assets

Due to the blockchain technology as a GameFi foundation, we have NFTs as unique and indivisible tokens that represent ownership over a particular digital asset. The concept of digital ownership is central to many blockchain-based games. NFTs can represent all types of assets, either physical or digital. 

Similar to traditional video games, players can own avatars, houses, weapons, tools, and even animals. The big difference is that, in GameFi, such digital assets can be created as NFTs in the blockchain. In simple words, a player can gain authentic and verifiable ownership of in-game assets. 

The concept of exercising the right of ownership over digital assets, specifically in-game items, created economic opportunities that were not possible before. NFT holders now can monetize their assets in the same manner they can in the physical world.  

Decentralised Finance

Decentralised Finance (DeFi) is a new form of finance that does not rely on central financial institutions as intermediaries. Central financial authorities are, for example, banks. Instead of using intermediaries, decentralised finance relies on smart contracts. 

The introduction of decentralised finance to the gaming industry made crypto gaming even more decentralised. In comparison to old fashioned gaming where traditional game studios had all the power, many GameFi projects enable their communities to participate in the decision-making process in the form of decentralised autonomous organisations (DAOs). 

DeFi brought to the table a bunch of new concepts to incentivise and reward gamers. You probably heard of liquidity mining, staking, or yield farming. All these new concepts stem from DeFi. Basically, gamers get the opportunity to stake their in-game tokens to earn rewards, access new gaming levels, or unlock other exclusive items. 

If you want to read more about decentralised finance and the opportunities it provides, take a look at: “Earning from DeFi”.

How to get started with GameFi games?

There are already many blockchain games in the market. As the word keeps spreading about the GameFi concept, hundreds of new game projects are emerging every month.

Due to the popularity of many GameFi platforms, gamers found themselves in a need of a service to collect information about their favourite game. You can do that by checking a gaming marketplace. Gaming marketplaces look into games and recommend games after evaluating them.

Even though each game has its own characteristics, there are a few common steps you will have to follow in order to get started with GameFi. If you want advanced guidance, choose a game and read its relevant documentation, such as the game’s white paper. 

What is Web3?

In an earlier blogpost, we examined the evolution of the web and the emergence of Web3. Tim Berners-Lee, the Internet pioneer, coined the term world wide web to illustrate a global web of information and resources interconnected through hypertext links. Since then, the Internet has gone a long way.

In this guide, we discuss the third generation of the world wide web, its main perks and best examples. The concept coined by Berners-Lee was often used to describe what is now known as the semantic web or a machine-to-machine Internet. The semantic web may be harder to wrap your head around than Web3 since the concept referred to a future web where computers would be able to understand Internet data directly. So while it might very well be part of the sum, up, don't confuse Web3 with the semantic web concept since they are not necessarily synonyms.

The emergence of the Web3 concept was recognised as a way to reverse the power dynamic on the contemporary Internet and give back power to the users. Even though data protection regulations have never been so strict, the current Web2 Internet makes, more than often, users sacrifice their personal data and privacy rights in exchange for a better and customised experience.

The new Web3, or the future of the Internet, as some like to call it, is decentralised, permissionless and driven by user welfare because it aims to provide end users with full data ownership.  As you can see, main features of Web3 resemble the cornerstones of blockchain technology.

Today, we are still living in a mainly Web2 era – the centralised Internet we now use. The stage following this, namely what Web3 refers to, was coined in 2014 by Gavin Wood, one of the co-founders of Ethereum. The short-named term stuck and soon became a synonym for a solution of all Web2’s problems, specifically in relation to the power stored in the hands of big tech companies.

Since 2014, Web3 became an umbrella term for anything linked to the next generation of Internet or an ecosystem of tech products that are decentralised, open source, interoperable and trustless.

If we would have to define Web3 within one sentence in a simple manner, we could say that it is an open, permissionless and decentralised network that provides a future where users and machine will be able to interact with data via peer-to-peer networks without the need of intermediaries such as authorities, centralised financial institutions and giant tech companies. 

You own data on the decentralized Internet 

Web3 will likely be powered by blockchain technology and artificial intelligence. Such a version of the Internet wouldn’t ask users to give away their personal information in return for a better browsing experience. Similar to the process under which cryptocurrencies operate, everything would have to be verified by the network before being accepted with all information published on the blockchain’s public ledger. 

From a technical point of view, Web3 can be seen as a protocol for publishing and consuming data and distributing data peer-to-peer. Secondly, we may add that it is a software package made to create tools, interfaces and digital services. Unlike Web2 that runs on centralised servers, Web3. runs on the blockchain technology and peer-to-peer networks. 

Web3 will enable Internet users to use search engines and browse on the Internet much faster. In Web2 applications users interact with the front-end that communicates with their back end which then connects back with the database. As mentioned above, Web 2 is stored on central servers and transmitted through the Internet browser. In contrast to that, the new generation of Internet does not contain a central database nor a central web server. Everything will be generated with the use of blockchain technology. While Web 2 changed the commoditised personal computer technology in data centres, Web3 will push the data centres out to the edge and into the hands of ordinary users.

In Web2, we encountered for the first-time artificial intelligence and machine learning. From their introduction they had a huge impact on every software category and Web3 isn’t any different. It is based on natural language processing technologies that enable computers to understand written and spoken words. Therefore, it is set to level up the development of intuitive computer capacities, bringing it a bit closer to the semantic web vision. 

What are Web3 foundational principles?

The main objective of Web3 is to transform the Internet into an open network where everyone can participate, along with giving people control over their own data. The concept rests on four main attributes, as explained below. 

Decentralisation and self-governance

If you are a frequent reader, you probably remember that we already discussed the importance of decentralisation. Web3 won’t be governed by a central authority, central financial institution or under the control of big tech companies. It makes sure that ownership is properly distributed across all users within the network.

Web3 will make it possible for people to interact with data in conjunction with artificial intelligence and machine learning tech. Decentralised apps (Dapps) will take the place of centralised social networks. In particular, Web3 is a decentralised network that enables users to connect directly with each other.

Open source and permissionless

Another main pillar of Web3 is the use of permissionless blockchains that aid in reducing limitations posed to users. Anyone can participate in the Web3 network without the need of a prior authorization. The permissionless and trustless nature of Web3 shall enhance the overall user experience by delivering more autonomy and control. 

Data security

The use of blockchain, along with decentralisation, makes Web3 more secure in contrast to its predecessors. Due to the decentralisation feature, there is no central point of attack. Increased data protection and cyber security are key attributes of Web3. The user-friendly approach makes sure that companies don't abuse their power by storing data on centralised servers where hackers or authorities could easily access data without the user's consent.

Interoperability

Web3 will allow applications to work across divergent platforms and IoT devices. Technologies associated with web 3.0 will enable easy communication between different applications and platforms, amounting to a more open web. 

Examples of Web3 technologies

In practice, Web3 still hasn't become a reality for us. However, current tech developments can do some things that are associated with the concept. Keep in mind that Web3 is not restricted to just a single segment, but to organisations with specific goals for developing the technology.

1. Cryptocurrency

Cryptocurrency, regularly associated with blockchain that is the underlying basis of Web3, is decentralised digital money that isn’t controlled by any central authority or central financial institution.

Therefore, it is a digital and encrypted medium of exchange. Cryptocurrencies provide users with all key features of the blockchain such as complete control and data encryption. The Web3’s financial side will thrive on the use of digital money and there are already some cryptocurrencies that use its technologies.

Here are some of the most popular Web3 cryptocurrencies: 

Ethereum (ETH)

One of the most popular cryptocurrencies present-day, Ethereum forms a firm basis of decentralised finance and blockchain innovations. Developers are enabled to build DeFi apps, NFTs, and blockchain gaming on its network. In fact, Ethereum is the second largest cryptocurrency next to Bitcoin and it is on the watchlist of plenty of investors. The only problem with Ethereum is that it has slow transaction speed and high gas fees. 

Solana (SOL)

This is one of the most popular Web3 cryptocurrencies. Solana is considered as an alternative to Ethereum due to its efficiency, speed and extended user base. From 2017 till today, Solana became a popular option for crypto investors. It provides developers with the opportunity to create decentralised applications as it represents a framework that encompasses non-fungible tokens, blockchain games and decentralised apps that should be relevant in Web3.  

Helium (HNT)

This coin is not as popular as Solana and Ethereum yet, but it represents a good example of the use of web technologies. Namely, it is a system that uses blockchain to connect wireless devices with IoT networks. Nodes as hotspots are used to connect such devices to a network for the purpose of data transmission that finally amounts to low energy requirements. 

Polkadot (DOT)

The Polkadot cryptocurrency is in line with Web3 aspirations. Taking into account that one of the most significant aspects of the blockchain is interoperability or in other words, the ability to operate across divergent chains, Polkadot delivers just that. It enables users to make transactions across divergent blockchains, levelling up the interoperability and scalability attributes. The system’s framework makes it possible for Web3 applications to communicate with multiple blockchains at faster speed rates. 

Flux (FLUX)

Flux is a true Web3 cryptocurrency as it runs on an entirely decentralised network. It presents a wide array of networks that amount to a comprehensive connection of distributed computing services. In other words, Flux has the ability to power over 4000 decentralised apps.  

2. Decentralised autonomous organisation (DAO)

Decentralised autonomous organisations (DAOs) came along with blockchain and Web3 aspirations. When we think of an organisation, we usually imagine something as a business or charity that is under the control of a central authority and rooted in a system of hierarchy as its key component.

The traditional aspect of organisations makes us imagine a line of command from executives and management to other levels that may be found below in such a structure. The thing with decentralised autonomous organisations is that they flatten out such systems entirely.

It represents an organisational form based on blockchain technology that is governed by a native crypto token. Anyone who is a token holder gets the ability to vote on significant matters related to the organisation. The place once held by traditional corporate structure has been taken by smart contracts to coordinate resources and efforts towards a common purpose.

With decentralised autonomous organisations there is no need to have costly administrative sections usually found within traditional types of organisations and companies. Since every single transaction is open to the public, such organisations make it almost impossible to commit fraud in virtual reality.

It is forecasted to become the main business model associated with the rise of the new Internet. As a practical example, take a look at how Ukraine DAO managed to fund the country's defence..

3. Smart contracts

Smart contracts are self-executing digital contracts that ensure that all parties see the outcome as fast as possible. The agreement is embedded directly into lines of code making transactions more transparent, irreversible and traceable.

Smart contracts are the backbone of Web3 since most interactions that occur on decentralised apps are powered by smart contracts.  Smart contracts define the semantics of Web3 applications.

The main purpose of smart contracts is to enable a secure and impartial process of executing an agreement between parties. They are trustless and work without the need for human intervention. Since they are written in code, they remove particular risks linked to miscommunication and contractual interpretation. Smart contracts are used widely in all transactions regarding digital assets.

4. Non-fungible tokens (NFTs)

NFTs are the cornerstone of Web3 as well. Non-fungible tokens represent a form of ownership over digital or physical assets. For example, when you buy a car, you get a paper title deed that represents ownership. NFTs do the same in the world of decentralised finance.

Taking into account that Web3 is a user-centred new generation of Internet, cryptocurrencies and NFTs are the backbone of its financial system that is transparent and secure. The new generation of Internet will be based on decentralisation, community building and consensus. 

These digital tokens, based on smart contracts’ technology, have already done a lot for a number of artists worldwide since they opened new revenue streams, aided in removing barriers to enter the digital market and provided transactions without the meddling of central authorities and financial institutions. 

5. Decentralised applications (Dapps)

In the section about cryptocurrencies, we mentioned that many Web3 platforms provide the developers with opportunities to develop decentralised applications. We mentioned the word decentralised a lot so let’s lay down a practical example.

For example, when you use a digital service such as Google Docs, you are using a centralised cloud-based application. That means that there is some kind of trade-off. Google gets access to all the information in your documents, and you get the possibility of storing information in the cloud and enjoying a number of cloud-based benefits. You basically trade your valuable data for convenience.

Since our example is about a cloud-based service, we can point out that the role of decentralised applications will be huge in Web3 cloud storage solutions. All existing Web2 examples of cloud storage services, such as Google and AWS, are entirely centralised applications.

With centralised apps, the danger that valuable data could be distributed to third parties or modified remains. On the contrary, decentralised cloud storage services could provide encrypted and distributed data storage.

Technically, data would be divided into many fragments and users would be able to retrieve these fragments according to their personal requirements. There are already some Web3 examples, namely leading decentralised storage solutions such as Storj and Sia.

Hence, decentralised apps give you the possibility to get access to all cloud-related benefits without being under the control of a central authority. Decentralised applications use blockchains technology, for example the Ethereum blockchain, to execute their online computation. They are only submitted to Web3 requirements such as being open-source and encrypted.

In other words, Web3 applications will operate on the blockchain technology, decentralised web, namely peer-to-peer networks, or a hybrid of these two. Such decentralised apps are known as dApps.

6. Decentralized social networks

Centralised social networks have majorly dominated in the Web 2.0 era highlighted by digital marketing and customised services. Again, users had to trade their data to get a user experience on the Internet tailored to their specific needs. As they say, data is the new oil.

The constant abuses of power by central authorities and tech companies amounted to the enactment of many data protection regulations worldwide. The emergence of Web3 refers sometimes to a radical departure from the way things have been done in the Web2 era to giving back power and data ownership to Internet users.

Decentralised social network platforms bring to the table a bunch of benefits. They safeguard the users’ privacy, empower users, remove the need for intermediaries, and take the best out of artificial intelligence and machine learning technologies.

Even though Web3 social networks are still in the early phase of development, a few of them have already emerged to the surface.

Sapien is a social news platform that is based on the Ethereum blockchain. It serves as a decent alternative to Facebook, Twitter, or even Google in the aspect of having a social news platform.

Sola is a network representing another hybrid of media and social network platforms. It is based on blockchain and artificial intelligence technology to provide a customised experience for users without the poor bargain of trading data for convenience.

Steemit is another Web3 example of social media. It can be described as a reward platform that helps users create content and monetize it accordingly. Such a social media platform that enhances user-generated content runs entirely on the Steem blockchain. It is a platform similar to Reddit. 

7. Decentralised exchange services

Decentralised exchanges come along as Web3 examples as well. Their main advantages are linked to cheaper and faster transactions, security and compatibility with hardware wallets. 

Users have the possibility of entirely exercising control over their funds. For example, IDEX and EOSFinex are the most popular decentralised exchange services.

IDEX is a popular and widely used online service for trading ERC-20 tokens. IDEX contains a user-friendly interface. Anyone with an Ethereum wallet can trade on its platform.

EOSFinex is a decentralised exchange that runs on the EOS software. It is currently being developed by Bitfinex.

8. Edge computing

Edge computing is something as an antithesis of big data computing in big, centralised centres since it happens literally on the networks' edges. The term that refers to distributing computing is about delivering valuable data and services online as close to where it is being requested.

For instance, data might be processed on your computer before being sent along to another location. Thereby, you can mix the processing power of IoT devices on the networks’ edges into one big, decentralised computer. 

Are there any downsides to the use of Web3?

Web3 and its many examples are still in the early phase of development. Even though technologies such as blockchain, artificial intelligence, and machine learning make it possible for many of Web3 perks to function, we won't be anytime soon to experience the full Web3 experience.

The concept of Web3 certainly is the future web in terms of user-friendliness, data ownership, security, and transparency. There are some current drawbacks we hope will be dealt with in the future.

For example, less advanced devices will not be able to handle Web3 requirements and other implementation challenges. On the other hand, the concept may be hard for newcomers to understand so it may take some time to spread the word and educate people.