List of contents

  • The gaming industry today

  • How does it work?

  • How will blockchain impact the world of gaming?

    • Real ownership

    • Decentralized market

    • Streamline payments

    • Multi-universe game

    • Fair playing field

    • Unlimited games

  • Limitations

  • Examples of blockchain games

  • Closing


The blockchain ecosystem is developing at a rapid pace, generating an ever-increasing impact every day. Although this technology is mostly used in cryptocurrency networks, it can also be used to produce innovative solutions in the broader industry.

On Binance Academy, you can find all kinds of articles discussing the uses of blockchain. Important examples include health, government, supply chain, IoT, and charity.

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


The gaming industry today

Currently the majority of online games follow a centralized model. This means that all data involved is stored on servers that are completely controlled by the game administrator.

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

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

  • Server crash due to technical problems

  • System infiltration by hackers

  • Game closing

  • Ban inappropriate accounts

  • Lack of transparency in terms of game mechanics and rates

  • Manipulation of the game economy by developers and administrators

In other words, the power is in the hands of the gaming companies. But fortunately, blockchain technology can eliminate or mitigate most of these problems.


How does it work?

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

This way, each player can have full control over their account and digital assets, and they are free to exchange these assets at any time. There are several different methods of developing and maintaining blockchain games.


How will blockchain impact the world of gaming?

This section introduces some of the most common ways in which blockchain technology can impact the gaming industry.


Real ownership

As already mentioned, blockchain-based games allow players to have permanent ownership and complete control over their in-game assets. Typically, each asset is represented by a unique non-fungible token (NFT), such as ERC-721 tokens.

These assets are in-game cards, skins, equipment, and characters. But whatever the type of asset, they can all be linked to blockchain tokens, which are managed by a distributed network.


Decentralized market

Game companies have the power to manipulate the drop rates and economics of their games. They can also lock or bind in-game items, so they cannot be traded.

In contrast, games built on blockchain networks allow the creation of decentralized markets. This means players don't have to trust other players, while also providing censorship resistance. All players can freely buy, sell and exchange their in-game assets in a peer-to-peer manner.


Streamline payments

Blockchain and smart contracts have the ability to reduce costs and speed up financial transactions. It can also simplify all types of payments, not only for exchanges between players (peer-to-peer) but also between players and developers.

 

Multi-universe game

By linking in-game data and items to blockchain tokens, players can exchange their assets between different games. This also makes it possible to recycle their digital assets while playing different games.

Since game items are represented using digital tokens, players can exchange these tokens to other game markets, which exist on the same blockchain.


Fair playing field

Depending on the implementation, blockchain enables the creation of open-source, distributed, and transparent game servers. That way, the game mechanics can only be changed if the majority of the network chooses to.

Additionally, the inherently distributed nature of blockchain prevents hackers and cheaters from tampering with the game because there is no single point of failure.


Unlimited games

When the game is on a centralized server, developers can abandon and close the game at any time. With blockchain, players can continue playing the game even if the developer is no longer around.

As long as the blockchain network remains running, the game will remain alive. In some cases, new developers take over to continue project development.


Limitations

Even though blockchain technology opens up new horizons in the gaming environment, there are still big challenges that must be faced. Some of them are as follows:

  • Scalability. Blockchain tends to be slower than centralized networks, which makes it difficult to adopt on a global scale.

  • Lack of adoption. Even though there are hundreds of blockchain games available, demand is still very low. Most games have a very small number of players.

  • Centralization. Not all blockchain-based games are completely decentralized. Some do use ERC-721 tokens or tokens from other blockchains but are actually run on centralized servers.

  • Simplicity. There are some better ones, but most blockchain games are too simple to hold the attention of players who value quality graphics or want a complex gaming experience.

  • Barriers to entry. Raising funds to start and manage a blockchain game is somewhat challenging. Lack of adoption, along with scalability issues can hamper the work of developers.

  • Competition. Blockchain games are often developed by small independent groups (indie games). This team may find it difficult to compete with large gaming companies from a centralized world.

Fortunately, various solutions are being developed. Several teams are testing Ethereum Plasma, Lightning Network, and Layer 2 others to address scalability issues.


Examples of blockchain games

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

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

  • 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

Closing

It is very clear that blockchain technology has great potential in the gaming industry. Blockchain provides significant advances for players and developers, especially in terms of decentralization, transparency and interoperability.

If developers can overcome the major limitations that exist, blockchain will likely change the world of gaming for the better, and we will see a new field in the world of entertainment that gives players freedom.