Ways blockchain gaming is driving demand for digital assets

What better way to motivate people to adopt a technology than by making it fun? Blockchain gaming is a compelling use case for distributed ledger technology. As the gaming and esports industry continues to grow, there are big opportunities to encourage more people to buy in-game items and build peer-to-peer marketplaces around them.


In many online games, gaming companies store in-game purchases on centralized servers. This leads gamers to question who really owns these assets. Gamers don’t fully own the virtual assets they purchased and they can’t sell or trade assets outside of the game. Using the blockchain to store items and characters enables decentralized and transparent asset ownership and will allow gamers to exchange them p2p, or exchange them for assets on other games.


Blockchain technology is changing different industries and the $100 billion gaming industry is no exception. Blockchain is here to change many aspects of video games that billions of people around the world are playing.


Virtual asset market

One of the benefits of blockchain technology in gaming is that it will increase the value of these virtual assets. By making digital in-game purchases rare and unique with cryptography, the community of gamers will create a virtual asset market. Some of the ways DLT will do this is by:

  • Providing gamers a way to use virtual items in and out of games will increase their value.
  • Creating platforms that will allow a gamer to sell the items for fiat will also increase their economic value.
  • Building a healthy marketplace for items will increase their social value.

All of this will change the name of those items from virtual items to digital assets.


Security increase

In traditional games, virtual items ownership and trading was not possible. Gamers used to work hard or pay to get rare and expensive items that counterfeiters copy later, leading those assets to drop in value. Blockchain will address that problem since it can stop the trade in counterfeit virtual assets on the black market.


It will also stop the illegal acquisition of keys by creating a decentralized and immutable ledger where users can store items and determine what belongs to whom. This will make duplicating the items impossible. It is the same principle of cryptocurrencies where the main purpose of the blockchain is to prove immutable ownership.


Faster Payments

Blockchain will make the purchasing of items and games faster and will ensure the payments are secure. Developers face many issues selling their software outside of app stores, which leads to huge commission fees and loss of control over the customers. Additionally, blockchains enable micropayments which allow developers to receive direct payment and enable them to make a larger profit margin.


ESport use cases

Electronic sports are gaining in popularity recently. Virtual tournaments centered on video games are no more just for fun and it is becoming a lot more serious sport with a huge number of spectators.


With the rise of eSports, interest to apply the powerful blockchain technology to it increased as well. Electronic sports will grow into a $1 billion industry in 2019 and will likely exceed major league baseball by number of viewers by 2020.


With this increasing popularity, new gaming celebrities are emerging and are contributing to the growth of this industry through their videos and streaming channels.


One of the best-known gamers is Tyler Blevins, more known by his online name Ninja. He is a Youtuber and Twitch streamer. As of May 2019, he is the most followed streamer on Twitch with more than 14 million followers and an average of 40,000 viewers per week. So just like in traditional sports, fans follow their favorite eSports personalities.


However, despite the growth and popularity of eSports, it is still facing some challenges especially when it comes to the establishment of eSports teams. Even though there is a big number of professional gamers, finding and tracking these gamers ranking and progress remains difficult.


To make a comparison, there are around 100 professional teams for the most popular eSport game in the world, League of Legends, while there are about 300 thousand football teams worldwide. The main reason for this small number is that it is not possible to track and contact good eSports players.


So establishing contracts, coaches, managers for eSports teams and gamers is a hard, time-consuming, and expensive process.


For the eSports industry to expect to reach its potential and grow to come close to sports like soccer, it needs to apply new technologies that have the potential to accelerate its growth and this is where the blockchain technology can come in.


Companies making a difference

One company that offers a flexible, free platform for creating, integrating, and scaling blockchain-based gaming assets is Enjin Coin.  It announced via its Medium page in March 2019 that it is going to launch a Testnet version of the Unity SDK. The SDK will allow users to integrate a robust suite of blockchain-based ERC-1155 assets into their games.


D Another company solving the problem of financial transparency in eSports is DreamTeam. They are providing an all-in-one platform that will allow gamers to find teammates, manage teams and earn money from competitions. The platform was launched in 2017 and since then it has acquired 1.3 million individual users. It connects gamers, sponsors and professional competition and is offering gamers the opportunity to apply to professional, semi-professional or amateur eSports teams with a more than 60% chance to get lucrative deals, receive prize money and set their salary.


Tron is also one of the most advanced blockchain projects. Tron is the standard for blockchain-based video games. Due to its potential for high scalability, it is becoming the go-to project for blockchain game developers.


blockchain gaming
CryptoKitty

Blockchain games

Starting with some history. Blockchain gaming started around 2013 with games such as HunterCoin but we had to wait until late 2017 for the general public to start paying more attention to blockchain gaming after the launch of Axiom Zen’s CryptoKitties.


CryptoKitties allows you to collect, breed and trade virtual cats on a market place. One Kitty sold for more than $170,000. As the game gained in popularity, it reached an all-time high in the number of transactions on the Ethereum network and famously crashed the network in December 2017.


The game operates as a non-fungible token (NFT) on the Ethereum network which is unique to each CryptoKitty. So each CryptoKitty is unique and owned by the user and its value can increase or decrease depending on the marketplace.


In October 2018, the game reached 1 million cats being bred with a volume of 3.2 million transactions on its smart contracts. It has processed more than $12 million in sales on its marketplace. There are other games as well that are gaining in popularity such as World of Ether on Ethereum, EOS Knights on EOS, Epic Dragons on Tron and many others.


Blockchain gaming gameplay

Most computer gamers find that the gameplay is still limited but the games are evolving and many game developers started giving more attention to blockchain games. Like Ubisoft that is planning to launch a blockchain based game called HashCraft. It is still in very early development, prototype form. The game is an experiment in what the future of gaming could be and it is inspired by famous games such as Minecraft and Fortnite.


The team behind it is led by Ubisoft’s Blockchain Initiative Manager Nicolas Pouard who is also a founding member of the Blockchain Game Alliance. The team spent the last year building the prototype and demonstrating it and Pouard says he had been shocked by how the public reacted to it with many gamers and journalists asking about when the game will launch. While the game itself is not quite ready for full release, it is pushing the boundaries of what was previously thought possible.


Conclusion

Blockchain technology has risen in popularity in recent years especially after bitcoin reached its high peak of $19,783 in December 2017 but it’s still far from mass adoption. Many believed that financial applications would lead to mass adoption. However, blockchain gaming may be the catalyst instead. The gaming industry and eSports are constantly growing in popularity and it has a proven history of being the catalyst for the adoption of new technologies such as artificial intelligence, virtual reality, and augmented reality. Blockchain technology is similarly likely to resonate with end-users through the value it brings to gaming communities. As more people enter and engage with others through online gaming communities, blockchain technology offers a way to tap into a billion-dollar market.