The world is unraveling new use cases for blockchain technology each day. Although most people think of Bitcoin and finance when they hear the word ‘blockchain’, the technology extends its reach far beyond those two things.
You may already know that agriculture businesses, energy companies, and the art world are integrating blockchain into their operations. But, there’s another unsuspecting sector also joining in: online gaming. Numerous cryptocurrency projects are picking up their controllers, so to speak, and some of the industry’s biggest names are contributing their support.
In this article, we’re going to tell you how blockchain technology is entering the over $50 billion online gaming market.
Right now, fraud is rife in the virtual goods market. A lack of marketplace trust leads to segregated, centralized trading platforms who oftentimes charge excessive fees when you exchange your assets. Additionally, the abrupt shutdown of a gaming platform could cause your hard-earned goods to all of a sudden be worthless.
Wax and Enjin Coin are two projects transforming this ownership of virtual goods, albeit in slightly different ways.
WAX, which stands for Worldwide Asset eXchange, is a decentralized platform that you can use to build virtual marketplaces. Created by the OPSkins team, the platform uses WAX tokens to enable you to trade any virtual asset for cryptocurrency. Although they’re targeting online gaming, they state that you can tokenize any type of virtual good on the platform.
Enjin Coin takes blockchain-based ownership one step further by creating and managing goods directly on the Ethereum blockchain. Using the platform, gaming communities create currencies, items, and even attributes that are backed by the parent Enjin Coin. The project also includes a Smart Wallet in which you can trade your goods across different gaming platforms.
As with other industries, traditional gaming payment systems are usually slow, cumbersome, and expensive. They can also cause a maldistributed ecosystem of wealth as the middlemen and large vendors benefit the most from those inefficiencies.
With cryptocurrency payments, in-app purchases become frictionless as micropayments can transfer directly from players to the game developer. There’s no more need for a middleman in this transaction. The security and immutability of blockchain technology are enough to facilitate this type of trustless exchange.
The blockchain also brings value to game distribution. Instead of publishing to a centralized marketplace like the Apple App Store, game developers can reach consumers directly through a decentralized marketplace. Once again avoiding a centralized middleman, the developers pay only a fraction of what they normally would on sales fees.
GameCredits is building this exact type of payments system. The project is aiming to become the sole payment system of the online gaming industry. You can use GAME, the project’s cryptocurrency, to pay for games and make in-game purchases. GameCredits also includes GPlay, a decentralized app store that pays out 90% of the sales revenue directly to the game’s developer.
You may already know about CryptoKitties and the dozens of other collectible-style games on the blockchain. However, blockchain technology is being used for more than just cute, digital animals.
Decentraland is a “virtual reality platform powered by the Ethereum blockchain.” In essence, it’s a virtual world that you can own a piece of. You purchase land in the Decentraland world, and the record of ownership is recorded on the Ethereum network. You’re free to do whatever you choose with your land.
Over time, each player will build on their digital real estate creating an entire virtual universe complete with businesses, services, and social activities. The only limit is in the imagination of the players on the platform.
Some projects are blurring the lines between virtual reality and actual reality. This trend began with augmented reality games such as Pokemon Go and is continuing through the blockchain. Because of the frictionless nature of cryptocurrency, you can receive monetary rewards for real-life actions that you’re able to spend across virtual platforms.
Experience Points (XP) is just one project making this happen. Experience Points is starting by offering incentives on online gaming platforms but has plans to expand into the real world.
Here’s how it works: You earn XP, the platform’s native token redeemable for gaming items and services, when performing certain tasks. These tasks can range from unlocking a gaming achievement (virtual) to getting an “A” on a math test (physical). The team’s mission is to gamify life and reward you for everyday experiences.
Just as with casino gambling, eports betting benefits from blockchain technology. The tech creates a trustless, secure ecosystem for low fee betting outside the control of a central party. This opens up jurisdictions that are notoriously strict on betting to a whole new market of gamblers.
The most notable project tackling this area is the Mark Cuban-backed startup, Unikrn. The project uses its Unikoin Gold cryptocurrency as the medium of exchange for esports betting on the platform. Unikrn raised ~$31 million in its October 2017 initial coin offering (ICO).
As you can see, blockchain technology is affecting almost every aspect of the online gaming world. It’s tokenizing virtual goods, improving betting and payments, and driving breakthroughs for a host of new types of games.
This is just the start, though. As the blockchain industry evolves, online gaming will evolve with it to bring a whole new set of gaming innovation.
CoinCentral’s owners, writers, and/or guest post authors may or may not have a vested interest in any of the above projects and businesses. None of the content on CoinCentral is investment advice nor is it a replacement for advice from a certified financial planner.