The role of blockchain and cryptocurrencies in the gaming industry
So-called blockchain games are becoming increasingly popular. It’s a complicated concept, at first glance, explained very simply. Blockchain games are games that are based on blockchain technology and use elements of cryptography. They are often games that use cryptocurrency as an in-game tool.
The most important thing that this technology carries within the game is the absolute ownership of an item. For example, by purchasing an in-game NFT token, the player can dispose of it outside of the game. It is also possible to trade with other players completely unhindered.
Practically, we are witnessing the birth of a whole new economy, where each player can create their own unique content. Another possibility in cryptogames is to get monetary rewards for completing quests and gaining experience. One of the most successful projects is the game Axie Infinity. The most popular type of cryptogame today is farming-based games. There are many games that allow you to accumulate cryptocurrency. These are DeFi games where you can actually earn money, though in a certain equivalent, cryptocurrency or NFT.
At first glance, it’s not clear how the developers can monetize the game. The easiest option is a commission on the trade for each subsequent resale of the NFT. More often than not, game creators take advantage of this very option.
Blockchain technologies have become increasingly sophisticated and interesting over the past few years. They are evolving and scaling up. As the world becomes increasingly digital, user curiosity continues to grow. But in 2022, the situation is somewhat different. The war in Ukraine and the negative performance of the cryptocurrency market have hampered the steady growth that games have shown over the past year. Nevertheless, a report from DappRadar and BGA Games reports that user activity in blockchain games has increased by 2000% since 2021.
In addition, gaming apps are becoming a priority investment area. Venture capital funds and investors are pouring multibillion-dollar capital into blockchain games and metagame projects. The total investment has already exceeded $2.5 billion. Meanwhile, financial institutions such as Morgan Stanley estimate the economic potential of a decentralized meta-universe at $8 trillion.
The threat to the integration of cryptocurrency into the gaming industry is posed by security incidents. For example, the hacking of the Ronin cross-chain bridge, allowed the same asset to be transferred between different blockchains. The Ronin bridge involved in the blockchain game Axie Infinity was hacked. Taking advantage of a vulnerability in the software, an attacker withdrew crypto-assets worth ~$625 million.
However, security issues, such as the Ronin bridge hack, and difficulties in achieving full interoperability remind everyone involved that full adoption of cryptocurrency in the gaming industry is still a long way off. To reach that point, cryptocurrency has an important role to play in fully integrating into full video games. While this process will be slow and complex, we are witnessing the creation of a new gaming economy.