The gaming business has come a long way from its humble beginnings. Those of us who remember playing Super Mario on a 16-bit gaming console know how this once simple industry has evolved into a treasure trove of immersive and emotionally charged VR games that reward precision and preparation.
The blockchain ecosystem is growing rapidly, affecting more and more people every day. While the technology is primarily used in cryptocurrency networks, it also enables innovative solutions across a variety of industries.
You can find several articles on blockchain use cases on Coinscreed. Notable examples include Crypto Wallets, Exchanges, NFTs, Reviews, and News.
But did you know that blockchain technology is also transforming the gaming industry?
The gaming industry today
Today, the vast majority of online gaming follows a centralized model. This means that all related data is stored on a server that is fully controlled by the game’s administrators.
Typically, the data includes account information and server history, which records and stores all in-game events and player-collected assets (such as collectibles, items, and virtual money).
Since the database is owned by a single company, players have no real ownership of their accounts and items. In addition, centralized servers have many limitations and vulnerabilities, including:
- Server malfunction due to technical issues
- System infiltration by hackers
- Game shut down
- Undeserved ban of accounts
- Lack of transparency regarding game mechanics and rates
- Manipulation of the game economy by developers and administrators
In other words, the power is in the hands of the game companies. But fortunately, blockchain technology is able to eliminate or mitigate most of these problems.
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How does it work?
As a distributed database, a blockchain-based system can be used to verify and secure all types of digital data, including game history, digital items, and tokenized assets. The main idea is to take the power away from the game companies and give it back to the players.
In this way, each player can have full control over their accounts and digital assets and can trade these assets at any time. There are many different methods of developing and maintaining a blockchain game.
How can blockchain affect the gaming world?
This section presents some of the most common ways blockchain technology can impact the gaming industry.
As mentioned earlier, blockchain-based games allow players to have permanent ownership and full control over their in-game assets. Typically, each asset is represented by a unique non-fungible token (NFT) such as ERC-721 tokens.
Assets can include maps, skins, gear, and characters. But regardless of the type of asset, they can all be linked to blockchain tokens held by a distributed network.
Game companies have the power to manipulate the drop rate and economics of their games. You can also lock or bind in-game items, making them untradeable.
In contrast, games based on blockchain networks allow for the creation of decentralized markets. This eliminates the need for trust between players while providing resistance to censorship. All players are free to buy, sell and trade their in-game assets on a peer-to-peer basis.
Blockchain and smart contracts have the power to reduce fees and speed up financial transactions. They can facilitate all kinds of payments, not only for exchanges between players (peer-to-peer) but also between players and developers.
Multi universe of games
By linking game data and items with blockchain tokens, players can trade assets between different games. This can allow gamers to recycle their digital assets while trying out different games.
Since game items are represented by digital tokens, players can trade those tokens on other game marketplaces hosted on the same blockchain.
Fair playing ground
Depending on the implementation, blockchain enables the creation of open-source, distributed, and transparent game servers. In such cases, game mechanics can only be changed if the majority of the network votes for it.
Additionally, the distributed nature of blockchains prevents hackers and scammers from disrupting the game as there is no single point of failure.
If a game exists on a central server, developers can abandon the project or end the game at any time. With blockchain, players can keep playing even if the developers leave.
As long as the blockchain network works, the game stays alive. In some cases, new developers take over to further improve the project.
Although blockchain technology has opened up a new horizon for the gaming environment, it still has significant challenges to overcome. Some of them include:
- Scalability. Blockchains tend to be much slower than centralized networks, which can prevent games from being rolled out on a global scale.
- Lack of adoption. Although hundreds of blockchain games are available, demand is still very low. Most games have a very small number of players.
- Centralization. Not all blockchain-based games are fully decentralized. Some of them use ERC-721 or other blockchain tokens but actually run on a central server.
- Simplicity. There are a few exceptions, but most blockchain games are too simple to appeal to players who value high-quality graphics or an intricate gaming experience.
- Barriers to entry. Raising funds to start and maintain a blockchain game can be challenging. The lack of adoption, along with scalability issues, can limit developers’ work.
- Competition. Blockchain games are often developed by small, independent groups (Independent Games). These teams might have a hard time competing with giant gambling companies in the centralized world.
Fortunately, numerous solutions are being developed. Several teams are experimenting with Ethereum Plasma, Lightning Network, and other Layer 2 solutions to solve the scalability problem.
Examples of blockchain games
Compared to the traditional gaming industry, the blockchain gaming niche is still quite new and relatively small. Still, there are hundreds of DApps and games based on blockchain networks.
Most decentralized gaming apps and platforms run on the Ethereum blockchain (like Enjin and Loom). But there is a growing list of projects being developed on other networks such as EOS, TRON, ONT, NEO, VeChain, and IOST. Some examples of blockchain-based games are:
- Decentraland (virtual reality platform)
- Gods Unchained
- My Crypto Heroes
- Cheeze Wizards
- Crypto Space Commander
- Axie Infinity
- EOS Dynasty
- EOS Knights
- Beyond the Void
- HyperDragons Go
It is clear that blockchain technology has great potential in the gambling industry. It offers significant improvements for gamers and developers, especially in terms of decentralization, transparency, and interoperability.
If the developers manage to overcome the major limitations, the blockchain is likely to change the gaming world for the better and is likely to open a new field of entertainment that will bring more freedom to the players.