Contents

  • Gaming industry today

  • How does it work?

  • How might blockchain impact the gaming world?

    • real ownership

    • Decentralized marketplace

    • Making payments easier

    • Game multiverse

    • fair playing field

    • Unlimited game play

  • Limitations

  • Examples of blockchain games

  • latest ideas


The blockchain ecosystem is growing rapidly, affecting more and more people every day. Although this technology is mostly used in cryptocurrency networks, it actually allows the creation of innovative solutions for many different sectors.

You can find many articles talking about blockchain usage areas on Binance Academy. Prime examples of these use cases include healthcare, governance, supply chain, IoT and charity.

But did you know that blockchain technology is changing the gaming industry?


Gaming industry today

Currently, the majority of online games use centralized models. This means that all relevant data is stored on a server completely controlled by the game administrators.

Typically, the data consists of account information and server history. In this history, all events and all in-game assets collected by players (such as collectibles, items and virtual currency) are recorded and stored.

Since the database is owned by a single company, players are not the real owners of their accounts and items. Additionally, centralized servers may have many limitations and security vulnerabilities. For example:

  • Server malfunctions due to technical problems

  • Hackers infiltrating the system

  • Game closing

  • Unfair ban of accounts

  • Lack of transparency regarding game operating principles and rates

  • Developers and administrators manipulating the game economy

In other words, the power is in the hands of the gaming companies. But fortunately, blockchain technology can eliminate or reduce most of these problems.


How does it work?

As a distributed database, a blockchain-based system can be used to verify and secure all types of digital data, such as in-game history, digital items, and tokenized assets. The main idea is to take the power from game companies and give it back to the players.

This way, each player can have full control over their accounts and digital assets and the freedom to buy and sell these assets at any time.


How might blockchain impact the gaming world?

In this section, we will talk about the areas where blockchain technology is most likely to affect the gaming industry.


real ownership

As we mentioned before, blockchain-based games enable users to have permanent ownership and full control over their in-game assets. Each asset is typically represented by unique, non-fungible tokens (NFTs), such as ERC-721 tokens.

In-game cards, skins, equipment and characters may be among these assets. But all assets, regardless of their type, can be tied to blockchain tokens managed by a distributed network.


Decentralized marketplace

Game companies have the power to manipulate drop rates and the economies of their games. They can also make in-game items untradable by locking or binding them.

In contrast, games built on top of blockchain networks enable decentralized marketplaces. While this eliminates the need for trust among players, it also reduces resistance to censorship. All players can buy, sell and trade their in-game assets peer-to-peer.


Making payments easier

Blockchain and smart contracts have the power to reduce transaction costs and speed up financial transactions. They can facilitate payments of all types, not only between players (peer to peer) but also between players and developers.

 

Game multiverse

By connecting in-game data and items to blockchain tokens, players can transfer assets between different games. This allows players to reuse their digital assets while experiencing different games.

Since game items are represented using digital tokens, players can trade these tokens in other game markets on the same blockchain.


fair playing field

Depending on the application, blockchain enables open source, distributed and transparent game servers. In such cases, the operating principles of the game can only be changed if the vast majority of the network votes in favour.

Additionally, the distributed nature of blockchains prevents hackers and fraudsters from disrupting the game because there is no single point of failure.


Unlimited game play

When the game exists on a central server, developers can abandon the project or shut down the game at any time. With blockchain, players can continue the game even if the developers leave the project.

As long as the blockchain continues to work, the game remains live. In some cases, new developers take over the project to make improvements to it.


Limitations

Although blockchain technology opens up a completely new horizon for the gaming world, there are still some limitations that this technology must overcome. These limitations include:

  • Scalability. Blockchains are often much slower than centralized networks, which can hinder global gaming adoption.

  • Lack of usage. Even though there are hundreds of blockchain games available, the demand is still very low. Many games have very few users.

  • Centralization. Not all blockchain-based games are completely decentralized. Some of these use ERC-721 or other blockchain tokens but actually run through a central server.

  • Simplicity. While there are some exceptions, most blockchain games are too simple to appeal to players who value high-quality graphics or high-end gaming experiences.

  • Entry barriers. Raising funds to launch and maintain a blockchain game can be challenging. In addition to low usage, scalability issues can make developers' jobs difficult.

  • Rivalry. Blockchain games are generally developed by small, independent groups (indie games). These teams may have difficulty competing with the giant game companies of the central world.

Fortunately, various solutions to these limitations are being developed. Several teams are already working on Ethereum Plasma, Lightning Network, and other Layer 2 solutions to solve scalability issues.


Examples of blockchain games

Compared to the traditional gaming industry, the blockchain gaming world is still quite new and small. Still, there are hundreds of DApps and games built on blockchain networks.

Most games run on the Ethereum blockchain, but an increasing number of projects are being developed on other networks such as EOS, Enjin, Loom, TRON, ONT, NEO, VeChain and IOST. Some examples of blockchain-based games are:

  • Decentraland (virtual reality platform)

  • Cryptokitties

  • Gods Unchained

  • My Crypto Heroes

  • Cheeze Wizards

  • Crypto Space Commander

  • Mythereum

  • Axie Infinity

  • HyperSnakes

  • EOS Dynasty

  • EOS Knights

  • Beyond the Void

  • CryptoZombies

  • Relentless

  • HyperDragons Go

  • CryptoWars

Latest Ideas

It is undeniable that blockchain technology has a huge potential for the gaming industry. It offers significant improvements for players and developers, especially in terms of decentralization, transparency and interoperability.

If developers can overcome the major limitations, blockchain is very likely to change the gaming world for the better and be seen as a whole new field of entertainment that offers players more freedom.