The connection between video games and Web3 is evident. Both exist digitally, using virtual goods and currencies, and incorporate elements of gamification. Although Web3 itself is not a game, it provides a platform for developing games. Furthermore, while current in-game items and currencies may not be crypto tokens, they have the potential to become them when the game is built on blockchain technology.
The growth of this industry is insane: the video game industry was poised to be worth approximately $159.3 billion by 2022. This recently got updated with projections from 2023 to 2027, the value is projected to grow from $312 billion, showcasing a compound annual growth rate (CAGR) of 7.9%. For blockchain gaming in particular, growth estimates are even more astonishing. Last year, the market was worth just over $7 billion, but over the next 10 years, it’s expected to each well over $700 billion!
So, what are blockchain games exactly?
Regardless of the genre, blockchain games seek to foster a fairer and more transparent relationship between players and developers. However, the specific integration of blockchain technology can vary across different video games.
Crypto and blockchain games are a novel class of online games where blockchain technology and cryptocurrencies are incorporated as core mechanics. Unlike traditional online games, these games offer players true ownership of in-game assets, often in the form of tokens or Non-Fungible Tokens (NFTs).
This decentralization enables gamers to have direct control over their virtual items, potentially allowing for real-world monetization. This differs from traditional video games, in which in-game items hold value only within the game itself and cannot be used in other games or in the real world.
How do blockchain games differ from traditional online games?
Unlike traditional online games, blockchain games provide players with decentralized and verifiable ownership of in-game assets, usually in the form of tokens or NFTs. This means assets can be traded, sold, or even used across different games.
How does gaming with cryptocurrency function?
To grasp the mechanics and advantages of blockchain gaming, it’s helpful to examine the unique tools that crypto gaming developers use. Key among these are crypto wallets, smart contracts, and blockchain tokens.
Some games directly accept payment with cryptocurrency to fund in-game purchases. Also on the increase lately are casino sites that allow bitcoin as a payment method for gambling games. The casino gaming industry has a long history of embracing new technologies, and the integration of cryptocurrencies is the latest example of this. They offer the same games players expect from other online casinos, but offer other unique benefits, as we’ll see next.
Why casinos have adopted crypto and blockchain technology
The rise of cryptocurrencies represents more than just a change in how we make payments; it signifies a larger shift towards decentralization and transparency. With crypto, transactions become more secure, faster, and unrestricted by traditional banking limitations. Users also benefit from the added advantage of anonymity, which can be essential in locations where fiat currency gambling is not permitted.
Additionally, the emergence of provably fair games, enabled by blockchain technology, provides players with a transparent and secure gaming experience that builds trust in online platforms. Smart contracts further reinforce this trust by automating and facilitating instant payouts.
The integration of cryptocurrency in casino gaming represents more than just a modern approach to playing. It creates a gambling environment that is inclusive, transparent, and secure for players worldwide.
Why have crypto games gained popularity?
The rise of crypto games can be attributed to the fusion of gaming and financial tech, giving gamers tangible rewards for their in-game efforts. Additionally, the allure of unique, tradeable, and sometimes rare in-game items has created a booming market, catching the attention of both gamers and investors alike.
Historical Context: Evolution of Blockchain Gaming
So where did it all begin? Blockchain gaming traces its origins back to games like “CryptoKitties”, a virtual cat breeding game, which became a sensation in 2017. Players would breed, collect, and sell these digital felines, with some kitties fetching astronomical prices.
Post-CryptoKitties, the gaming industry saw the potential of integrating blockchain. This led to the creation of decentralized gaming platforms and game-specific tokens. 2019 and 2020 were pivotal, witnessing a surge in play-to-earn models, with games like Axie Infinity leading the charge. These models offered players opportunities to earn by playing, trading, or holding assets, revolutionizing traditional gaming dynamics.
Basic Principles of Blockchain and Cryptocurrency in Gaming
Although Bitcoin is the original and best-known crypto, within gaming, tokens, often based on Ethereum’s ERC-20 or ERC-721 standards, represent in-game assets or currencies. Non-Fungible Tokens (NFTs), for instance, offer unique digital ownership, ensuring that each token (like an in-game sword or character) is distinct and cannot be replicated.
In crypto games, the in-game economy often revolves around these tokens and NFTs. Players can earn them through gameplay, trade them on in-game or external marketplaces, and sometimes even use them across multiple games. This ecosystem allows players to have true ownership of their in-game assets and earn real-world value from their virtual adventures.
Within a crypto casino, players will deposit bitcoin, ether, litecoin, or dogecoin (usually, although some platforms accept other cryptos) and use them just like they’d use fiat currency to play games at other online casinos. In these settings, cryptocurrencies work just like any other money.
Popular Blockchain Game Mechanics
P2E has reshaped the traditional gaming experience. Instead of just investing money into games, players can now earn returns by participating in in-game activities. Games like Axie Infinity allow users to earn tokens which can be traded on open markets, leading to potential profit. Crypto casinos could also come under this category, as you can earn crypto by winning the games.
Non-fungible Tokens (NFTs) in games
NFTs have become the backbone of many crypto games. Each NFT represents a unique digital item or asset, from characters to plots of virtual land. Their uniqueness and rarity can make them highly valuable and sought after.
Decentralized gaming platforms
Platforms like Decentraland provide virtual spaces where users can create, own, and monetize content. Built on the Ethereum blockchain, such platforms pave the way for a decentralized virtual realm, controlled and owned by its users.
Top Crypto and Blockchain Games to Watch or Play
If your curiosity has been piqued by the above, here’s a look at some of the top crypto games to try:
To get started, you’ll need to buy three Axies. Once you have your team, playing Axie Infinity is simple and intuitive. The main concept of the game revolves around breeding, battling, and collecting the cute and lovable Axie creatures. It’s important to note that Axie Infinity operates on the Ethereum blockchain platform and utilizes two in-game currencies: Smooth Love Potion and Axie Infinity Shards. If you can imagine Pokémon combined with a cryptocurrency twist, then you’ll get the idea behind Axie Infinity.
The Sandbox is a community-driven platform where creators can monetize their gaming experiences on the Ethereum blockchain. It’s a virtual world that brings the essence of gaming, designing, and ownership together. Drawing parallels with games like Minecraft and Roblox, The Sandbox stands apart with its emphasis on true ownership of assets and its play-to-earn model.
At the core of The Sandbox are three main components:
- VOXEDIT: A software allowing users to craft, rig, and animate their 3D objects, turning them into game-ready assets.
- MARKETPLACE: A decentralized space where creators can upload, price, and sell their assets. The platform’s native currency, SAND, facilitates these transactions.
- GAME MAKER: A drag-and-drop toolset where creators can utilize assets to build, share, and monetize interactive games.
The Sandbox empowers players by offering LANDs, unique virtual real estate plots, which they can populate with games and experiences. With its utility token, SAND, users can purchase assets, secure LANDs, and even stake to earn rewards. Blurring the lines between creation and gaming, The Sandbox proposes a decentralized metaverse of unlimited possibilities.
The pioneer, CryptoKitties involves breeding, collecting, and selling digital cats. Some rare kitties have even sold for hundreds of thousands of dollars! The game is credited with popularizing the concept of NFTs in the broader digital landscape and introduced a wave of interest in the intersection of gaming and blockchain technology.
Key Features of CryptoKitties:
- BREEDING: Players can mate two of their CryptoKitties to produce a new, unique kitty. Each kitty has its own set of “Cattributes,” genetic traits that can be passed down or result in the emergence of rare traits.
- COLLECTING: Kitties come in various forms, from common ones to limited edition and rare breeds. Collectors often seek out those with rare Cattributes, increasing their value.
- TRADING: Just like traditional collectibles, CryptoKitties can be bought or sold in the game’s marketplace. Their value can vary based on rarity, demand, and other unique traits.
- BLOCKCHAIN INTEGRATION: Each CryptoKitty is a unique NFT, representing true digital ownership. Built on the Ethereum blockchain, every kitty is immutable, which means it cannot be replicated, taken away, or destroyed.
CryptoKitties made waves not just for its innovative approach but also for its profound impact on the Ethereum network at its height, causing significant congestion. It remains a testament to the potential and challenges of incorporating blockchain into gaming.
Getting Started: A Beginner’s Checklist
Once you’ve chosen your perfect game, there are a few things to know before you start playing crypto or blockchain games, and some steps you’ll have to take that you won’t when playing traditional online games:
- Setting up your digital wallet: Before diving into any game, set up a digital wallet like MetaMask or TrustWallet. This wallet will hold your game earnings and assets.
- Choosing the right game for you: Research different games, their gameplay mechanics, potential returns, and community feedback. Pick a game aligned with your interests and financial goals.
- Investment: Remember, while you can earn, you can also lose. Don’t invest more than you’re willing to lose.
- Time: Some games require a significant time investment to see returns.
- Research: Always stay updated. The crypto and blockchain space evolves rapidly!
Safety and Security in Blockchain Gaming
- Importance of security in gaming and transactions: With real money at stake in blockchain gaming, ensuring security is paramount. Hacks, scams, and frauds have occasionally rocked the crypto space. Be sure to check game reviews before spending any money on them.
- Common scams and how to avoid them: Phishing attacks, where attackers trick users into giving up sensitive info, are prevalent. To avoid such scams, always double-check URLs, never share private keys, and use hardware wallets for significant amounts.
- Tips for secure gaming: Regularly update and back up software and wallets, employ multi-factor authentication, and be cautious of too-good-to-be-true offers. Remember, in the decentralized world, you’re your own bank – and security guard.
Monetizing and Profits in Blockchain Gaming
- How gamers can earn real-world money: By trading in-game assets, participating in tournaments, staking, or simply playing games, players can earn tokens. These tokens can then be converted to cryptocurrencies and eventually, fiat money.
- Withdrawing and converting game earnings: Most games and platforms connect to digital wallets like MetaMask. Gamers can transfer their earnings to these wallets, exchange them on crypto platforms like Coinbase or Binance, and then withdraw in their preferred currency.
- Tax implications and considerations: It’s crucial to note that earnings from crypto games may be subject to taxation. Players should maintain records of their transactions and consult a tax professional to ensure compliance.
Future Predictions and the Evolution of the Industry
The horizon of blockchain gaming is vast. In the future, we’re expecting to see:
- Interoperability: Players might be able to use assets across different games. Imagine using a weapon or character from one game in another.
- VR Integration: As VR tech advances, combining it with blockchain could give players an immersive experience where they can also earn.
- Mainstream Adoption: More conventional game developers could integrate blockchain features into their games, pushing the technology to a broader audience.
- Future collaborations and integrations in the gaming industry: Expect to see collaborations between major gaming studios and blockchain companies. These partnerships could combine high-quality gameplay with the innovative features of blockchain.
However, there are still potential challenges and criticisms that would need to be overcome for the industry to really grow and thrive as predicted:
- Scalability Issues: Current blockchain networks might struggle to handle large-scale global games. Solutions are being developed, but it’s an ongoing challenge.
- Environmental Concerns: Proof-of-work blockchains, like Bitcoin, require vast amounts of energy. The industry will need to address these concerns, possibly by adopting more eco-friendly consensus mechanisms.
- Regulation: As the industry grows, so will government interest. Regulations could be a double-edged sword, bringing stability to the sector but possibly stifling innovation.
Crypto and Blockchain Games FAQs
What was the first popular blockchain game?
“CryptoKitties” is often credited as the game that popularized blockchain gaming. It’s a virtual cat breeding game where players could breed, collect, and sell digital cats.
What are NFTs in the context of gaming?
NFTs, or Non-Fungible Tokens, represent unique digital items or assets within a game, such as characters, weapons, or land plots. They are distinct and cannot be replicated, ensuring true digital ownership.
How can players earn real-world money from blockchain games?
Players can earn through various means such as trading in-game assets, winning tournaments, staking, or simply playing the game. These earnings can be converted to cryptocurrencies and eventually to fiat currencies.
Are earnings from blockchain games taxable?
Yes, in many jurisdictions, earnings from crypto games, just like any other cryptocurrency transactions, may be subject to taxation. Players should consult with a tax professional for specific guidance.
How do players store or manage their in-game assets?
Most blockchain games connect with digital wallets, such as MetaMask or TrustWallet. These wallets store the players’ earnings and in-game assets securely.
What is the Play-to-Earn model?
Play-to-Earn (P2E) is a gaming model where players can earn real-world value, typically in the form of cryptocurrency or tokens, from their in-game activities and achievements.
Are blockchain games safe?
While the blockchain technology itself is secure, players should be cautious of scams, phishing attacks, and ensure they use trusted platforms and wallets. It’s essential to conduct thorough research and take security precautions.
Where can I start with blockchain gaming?
Begin by setting up a digital wallet and then choosing a game that aligns with your interests. Always do thorough research and consider joining related communities or forums to get insights from experienced players.
Blockchain gaming marks the intersection of entertainment and finance, offering players not just fun but potential profit. As this realm continues to evolve, the lines between gaming, investing, and even work might blur. For now, it offers an exciting prospect for those looking to merge their passion for gaming with the innovative world of blockchain. Dive in, but always with caution, research, and the spirit of exploration.
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