Content

  • The gaming industry today

  • How does it work?

  • How can blockchain affect the gaming world?

    • Real ownership

    • Decentralized marketplaces

    • Optimization of payments

    • Game multi-universe

    • Fair gaming foundation

    • Play without limits

  • Limitation

  • Examples of blockchain games

  • Final thoughts


The blockchain ecosystem is growing at a rapid pace, attracting more and more people every day. Although this technology is mainly used in cryptocurrency networks, it also allows for innovative solutions in a wide range of industries.

On Binance Academy, you can find many articles discussing blockchain usage options. Notable examples include healthcare, management, supply chain, IoT, and philanthropy.

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


The gaming industry today

Today, the vast majority of online games follow a centralized model. This means that all related data is stored on a server that is fully controlled by game administrators.

Data typically includes account information and server history, which records and stores all events and game assets collected by players (such as collectibles, merchandise, and virtual money).

Since the database belongs to one company, players cannot actually own their accounts and items. In addition, centralized servers have many limitations and vulnerabilities, including:

  • Server down due to technical issues

  • System penetration by hackers

  • Closing the game

  • Undeserved blocking of accounts

  • Lack of transparency regarding game mechanics and betting

  • Manipulation of the game economy by developers and administrators

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


How does it work?

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

Thus, each player can have full control over their accounts and digital assets, and they can freely trade these assets at any time. There are many different methods of developing and maintaining blockchain games.


How can blockchain affect the gaming world?

This section presents some of the more common ways blockchain technology is impacting the gaming industry.


Real ownership

As already mentioned, blockchain-based games allow players to have permanent ownership and full control over their game assets. Typically, each asset is represented by a unique non-fungible token (NFT), such as ERC-721 tokens.

Assets can include in-game cards, skins, gear and characters. But regardless of the type of assets, they can all be linked to blockchain tokens supported by a distributed network.


Decentralized marketplaces

Game companies have the right to manipulate the distribution speed and economics of their games. They can also lock or bind in-game items, making them unavailable for sale.

Conversely, games built on the basis of blockchain networks allow for the creation of decentralized marketplaces. This eliminates the need for trust between players, and also provides resistance to censorship. All players can freely buy, sell and exchange their game assets on a peer-to-peer basis.


Optimization of payments

Blockchain and smart contracts allow for lower fees and faster financial transactions. They can facilitate all kinds of payments, not only for transactions between players (peer-to-peer), but also between players and developers.

 

Game multi-universe

By linking game data and items to blockchain tokens, gamers can exchange assets between different games. This can allow players to reuse their digital assets by experimenting with different games.

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


Fair gaming foundation

Depending on the implementation, blockchain allows the creation of distributed and transparent game servers with open source code. In such cases, game mechanics can only be changed if the majority of netizens vote for it.

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


Play without limits

When a game exists on a centralized server, developers can abandon the project or close the game at any time. With blockchain, players can continue to play the game even if the developers leave.

As long as the blockchain network works, the game stays alive. In some cases, new developers commit to continuing to improve the project.


Limitation

Although blockchain technology has opened completely new horizons for the gaming environment, it still has serious challenges to overcome. Some of them include:

  • Scalability. Blockchains tend to be much slower than centralized networks, which can hinder the adoption of games on a global scale.

  • Lack of acceptance. Although there are hundreds of blockchain games available, the demand is still very low. Most games have very few players.

  • Centralization. Not all blockchain games are fully decentralized. Some of them use ERC-721 or other blockchain tokens, but actually run on a centralized server.

  • Simplicity. There are some exceptions, but most blockchain games are too simple to attract players who appreciate high-quality graphics or thoughtful gameplay.

  • Barriers to entry. Raising funds to launch and support a blockchain game can be a daunting task. Lack of adoption as well as scalability issues can limit the work of developers.

  • Rivalry. Blockchain games are often developed by small independent groups (indie games). These teams may find it difficult to compete with giant gaming companies from the centralized world.

Fortunately, many solutions are currently being developed. A number of teams are experimenting with Ethereum Plasma, Lightning Network, and other layer 2 solutions to address the scalability issue.


Examples of blockchain games

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

Most decentralized applications and gaming platforms run on top of the Ethereum blockchain (such as Enjin and Loom). But the list of projects being developed on other networks, such as EOS, TRON, ONT, NEO, VeChain and IOST, is growing. Here are some examples of blockchain-based games:

  • 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

Final thoughts

It is clear that blockchain technology has great potential in the gaming industry. It provides significant improvements for gamers and developers, especially in terms of decentralization, transparency and interoperability.

If developers manage to overcome the basic limitations, blockchain will likely change the gaming world for the better and possibly see a whole new field of entertainment that will bring more freedom to players.