Bitcoin & Gaming: Marriage of Convenience or Soul Mates? (Op-Ed)

Blockchain is just a distributed ledger, a database of sorts. Being simplistic, games can be thought as a database too, one with a very fancy UI. Why would any game need the blockchain?

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Bitcoin & Gaming: Marriage of Convenience or Soul Mates? (Op-Ed)

With Bitcoin, innovation seems to be around the corner as blockchain technology is already disrupting the financial world. Big firms, like Samsung, IBM and UBS, are already researching what to do with the underlying tech for things like storage. But what about gaming?

Can games make use of the blockchain?

In itself, a blockchain is just a distributed ledger, a database of sorts. Being simplistic, games can be thought as a database too, one with a very fancy UI. Why would any game need the blockchain? They already are a database.

Not only that, every game is a fast database. The blockchain is far from it, a game needs an update every time the engine ticks; which might range from 1/30th of a second to several orders of magnitude less (for physics, AI, etc). How could a blockchain help here? Bitcoin gets a block every ten minutes.

Moreover, P2P in gaming is not new. Although many of today’s online gaming passions reside in centralized servers, the technology for LAN (and dial-up) multiplayer exists since the 90s, every old school DOOM player can attest to that. Where would it help to use a blockchain here? The problem is already solved.

Anyone thinking about P2P distribution is overlooking the fact that not long ago 12.6 million IPs were downloading tens of gigabytes of pirated content through the BitTorrent protocol each month. The blockchain is now a mere ~31GB while any big release by a triple-A game studio is well over 20 GB. Who would change torrents for this? Blockchains are redundant here.

Cheating in games is as old as games themselves, and there are decade-old counter-measures to it such as Punkbuster, Blizzard’s Warden, Valve Anti-Cheat, and others. There should be nothing a blockchain could do here.  Well, actually, it is the domain of Bitcoin to be pretty much unfalsifiable. So it’s not unfeasible to use the tech behind it to implement something similar. When will the blockchain be used for this? I don’t know, go ahead and steal this idea. Now.

The blockchain as intermediary

Since 1994 there have been online casinos in the world, and not surprisingly even the first was secured cryptographically. It was only natural that with the advent of Bitcoin a new form of online venue would emerge: the Bitcoin Casino. These casinos are different in the sense that people no longer play with “chips” or “credits”, they play with bitcoin; which is much more like money, but lacking the “store of value” attribute.

These games do not integrate the blockchain in their insides as some of the previous comparisons would suggest; but they rather interact with the blockchain, and that is where its power resides: as an intermediary.

The bitcoin blockchain is a great intermediary, one that does not depend on any company whatsoever; it is not chained to any specific provider apart from its chosen few developers and their holy code. Messages in the chain will be protected by its voracious miners and their virtual hashing pickaxes.

At a cost, any game can record entries in the ledger. For a Casino, they are just plain bitcoins to be played with instantly; for an MMO they could represent a virtual item such as a sword, a hat, or even a character… so then why not the game’s data itself?

Storing games in the blockchain

People have already stored arbitrary data into the blockchain by using a hacky method where one sends Bitcoin to fake address, which by themselves encode the needed data. Since finding the private key for such addresses ranges from astronomically improbable to impossible, those coins are irremediably lost forcing clients to register them into the UTXO set (unspent output set).

Don’t get confused, that arbitrary data is not the public notes blockchain.info can assign to bitcoin transactions; although blockchain.info used to store that data into the blockchain. Since those days and because of the bloat it generates, it was decided that up to 80 bytes of data could be embedded into a transaction.

With 80 bytes of data, a simple game like The Legend of Zelda: A Link to the Past could be compressed to 630,589 bytes with 7z and embedded into the blockchain in about 7,883 transactions, whose cost could range from 7883 satoshis (with zero fees) to a perhaps reasonable 0.78837883 BTC (including a fee of 0.0001) or at the current price is just about US$200, which is perhaps not a bad price to store something ad infinitum all over the world; and certainly not good news for Nintendo if someone decided to do this. (However, other encoding schemes can increase this to 20000 bytes per transaction, reducing the cost to almost a dollar (US$0.80008), although its reliability is menaced by the possibility of blockchain pruning.)

Can Nintendo roll this back? No. Can they sue, send cease-and-desist letters or try to indulge in profits? No, it’s not a youtube channel. It is a cryptographically secure globally distributed database.

This is one of the magic qualities of the blockchain: It’s like a vault, once something’s in it the knights templar of mining will keep it secure as long as they can.

However, this is not what Bitcoin was thought for; this is a hack – a useful one, but still a hack. Given the ever dropping costs of storage and the high efficiency that a dedicated decentralized solution can surely provide, people would be far better off with something like storj.io or MaidSafe.

Making games store things in the blockchain

This is an interesting approach that might seem to contradict the early rhetorical statements that games did not need databases. It turns out that for some use cases, it might be a good idea to store user data in the blockchain.

Think about it. Small things such as accounts could be stored in it. Picture someone buying a game and getting a token on the blockchain; part of this token, which is actually an asymmetric pair of encryption keys, could be easily used as a login by having a user sign with their private key and letting the owner verify it, which would constitute enough proof of ownership for the user to be validated.

Since bitcoin addresses are just hashes of public keys and can’t be really seen until they’re spent, it would work wonders. The game client could be cracked to only validate a known payment, but hey, small steps first.

In the same vein, it could be used to credit purchases such as DLC or in-game items or cosmetic improvements. Don’t be surprised if EA starts “researching” Bitcoin tech. Jokes aside, this is good news for indies who have no dedicated servers to store immutable user data. So far, a collectible card game owner (Deckbound) is taking this approach to store and generate trading cards for its games.

Bitcoin for crowdfunding

Before Bitcoin, Indie game developers have never had so much freedom to collect money. Let’s face it Kickstarter is the place to go for indie game funding, there’s no denying that indiegogo is flexible and great, but KS stats are very likely to still dominate it; and it is really not accessible for anyone outside the handful of eligible countries.

While some bitcoin-exclusive crowdfunding sites have emerged, none of them has really taken off. The Latin American “Kickstarter”, idea.me, is perhaps the most well known crowdfunding site that accepts bitcoin; but it is even dwarfed by indiegogo.

If there’s a reason any of these bitcoin kickstarters haven’t had any success, it is because they’re really not needed at all. Why use a middleman when you’ve already got the best impartial intermediary available? Sure, KS “all or nothing” approach won’t work without one, but indiegogo’s flexible funding translates transparently to direct bitcoin funding.

If an indie game developer is clever enough to write a game, it should be a no-brainer for him or her to set up a mock KS page with a different bitcoin address for each reward tier.

Bitcoin for e-sports

Here again gambling comes into the scene, it is currently possible to bet bitcoin on e-sports by accessing traditional sports betting sites; and there’s services like leetcoin which allow players to bet between themselves.

Sadly, there’s not much to do with Bitcoin here. With little organization and services like challonge and twitch, it is really easy to setup a tournament. It is only a matter of community management.

Bitcoin micro-transactions for indie game developers

Again, bitcoin strikes a liberating blow to free indie developers from the clutches of payment processor fees; with a handful of code and the proper APIs, it is really easy to implement micro-transactions on video-games.

This will allow many game developers to implement business models like F2P with even less friction than before. Generate a QR inside your game, communicate with the blockchain via bitcoind or any blockchain API you prefer, and there you go.

The only “drawback” might be the fact that a minimum transaction fee has to be paid in order for miners to pick the block relatively soon, at current prices the recommended minimum transaction fee (0.0001 BTC) is about 2.3753 cents of a US dollar.

Blockchains for game company IPOs

Conceivably, this might be the option that has the largest friction of all the non-gambling gaming uses of Bitcoin tech; as the legislation for initial public offerings and incorporations is deep and varied. Yet, if properly executed it might be one of the most radical amongst them.

Once more, the ironically named blockchain, will liberate developers to create corporations whose stock can be represented digitally in a decentralized manner. While the words “corporation” and “indie” might seem extreme opposites, it is a feasible way of raising funds and sharing profits.

Reddit had tried to do this with its “reddit notes” but as of February this year it has desisted in doing so, as the new leadership is not interested in cryptocurrencies.

Maybe reddit is in no hurry to raise and share, but can indies afford not to? With Epic Games and Unity Technologies announcements early this year, together with platforms such as Steam Greenlight and Desura, it seems game development is getting so much more democratical. Why not share ownership?

Conclusions

While much can be said about possible innovations in gaming with blockchain tech, many aspects of it are not really needed by the gaming industry. Modern games are currently on the forefront of many technologies and constitute the main source of demand for billion dollar gpu companies like nVidia and AMD.

The prospects for Bitcoin interaction with games are really bright, as it feels like a niche that was previously not properly filled. In addition, the low legal friction that exists between most of its non-gambling uses should accelerate the adoption of the practices and techniques that will surely keep emerging.

Unless really innovative solutions are developed, the playing field is now more inclined towards small producers and indie developers as there is a new very low-cost middleman at their service.

Your feedback is very welcome. Thanks for reading.


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