Content

  • The gaming industry today

  • How it works?

  • How can blockchain affect the gaming world?

    • Real property

    • Decentralized markets

    • Simplified Payments

    • Multi-universe of games

    • Fair gaming environment

    • Unlimited Gaming

  • Limitations

  • Examples of blockchain games

  • Final considerations


The blockchain ecosystem is growing at a rapid pace, impacting more and more people every day. While the technology is primarily used in cryptocurrency networks, it also enables innovative solutions across a number of different industries.

On Binance Academy, you can find several articles that discuss blockchain use cases. Examples include healthcare, management, supply chain, IoT, and charity.

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


The gaming industry today

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

Typically, the data includes account information and server history - which records and stores all game events and assets collected by players (such as collectibles, items and virtual money).

Since the database is owned by a single company, players have no real ownership of accounts and items. Additionally, centralized servers have many limitations and vulnerabilities, which may include:

  • Server malfunctions due to technical problems

  • Hacker infiltration into the system

  • Game shutdown

  • Unfair account bans

  • Lack of transparency regarding game mechanics and fees

  • Manipulation of the game economy by developers and administrators

In other words, the power is in the hands of gaming companies. Fortunately, however, blockchain technology is able to eliminate or mitigate most of these problems.


How it works?

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

This way, each player can have full control over their accounts and digital assets and can trade these assets at any time. There are several methods of developing and maintaining a blockchain game.


How can blockchain affect the gaming world?

This section presents some of the most common ways that blockchain technology can impact the gaming industry.


Real property

As mentioned, 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 cards, skins, equipment, and in-game characters. But regardless of the type of asset, they can all be linked to blockchain tokens, which are held by a distributed network.


Decentralized markets

Game companies have the power to manipulate the drop rates (probability of getting items) and the economy of their games. They can also lock or bind game items, making them non-negotiable between players.

On the other hand, games built on blockchain networks allow for the creation of decentralized markets. This eliminates the need for trust between players as well as providing censorship resistance. All players can freely buy, sell and trade their in-game assets using a peer-to-peer basis.


Simplified Payments

Blockchains and smart contracts have the power to reduce fees and speed up financial transactions. They can facilitate all types of payments, not just for peer-to-peer trades, but also between players and developers.

 

Multi-universe of games

By linking in-game data and items to blockchain tokens, players can trade assets between different games. This could allow players to recycle their digital assets while trying out different games.

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


Fair gaming environment

Depending on the implementation, blockchain allows the creation of open-source, distributed and transparent game servers. In these cases, the game mechanics can only be changed if the majority of the network votes in favor.

Furthermore, the distributed nature of blockchains prevents hackers and cheaters from disrupting the game because there is no single point of failure.


Unlimited Gaming

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

As long as the blockchain network continues to function, the game will remain alive. In some cases, new developers may take over to continue improving the project.


Limitations

Although blockchain technology has opened a new horizon for the gaming environment, there are still significant challenges to be overcome. Some of them include:

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

  • Low adoption: Although there are hundreds of blockchain games available, demand is still very low. Most games have a small number of players.

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

  • Simplicity: There are some exceptions, but generally blockchain games are too simple to attract players who value high-quality graphics or a more elaborate gaming experience.

  • Barriers to entry: Raising funds to start and maintain a blockchain game can be very difficult. Lack of adoption, coupled with scalability issues, can limit developers' work.

  • Competition: Blockchain games are generally developed by small independent groups (indie games). These teams may encounter difficulties when competing with large gaming companies in the centralized world.

Fortunately, numerous solutions are already 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

When compared to the traditional gaming industry, the blockchain gaming niche is still very new and relatively small. Still, there are already hundreds of DApps and games built on blockchain networks.

Most games run on the Ethereum blockchain, but there is a growing list of projects being developed on other networks such as EOS, Enjin, Loom, TRON, ONT, NEO, VeChain, and IOST. Some examples of games based on blockchain networks:

  • 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 considerations

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

If developers are able to overcome key limitations, blockchain will likely change the gaming world for the better and see a new field of entertainment with much more freedom for gamers.