If you check out pricing websites like CryptoCompare or CoinMarketcap, you’ll see hundreds of cryptocurrencies. As you may imagine, not all of these are focused on being an alternative currency or payment system. From smart contract platforms like Ethereum to fiat-backed assets like the Tether (USDT), alternative cryptocurrencies can take many forms and serve a multitude of purposes.
Some Blockchain projects and their respective coins have been created to fill certain niches while others are obviously unnecessary and borderline fraudulent. There are a number of different areas in which the use of Blockchain-based technologies and tokens can have a noticeable impact. The online gaming industry is one of these.
Not only are the tech and gaming communities tightly connected, but Blockchain technology is also able to create new features and possibilities for games, gamers and fans, allowing them to connect, compete, collaborate, and negotiate directly to unlock new revenue sources in a $109 bln market. In short, Blockchain tech has become a game changer (pun intended).
Tokenization of In-Game Money & Items
If you’re a gamer, then you probably know how good it feels to finally get that item you’ve been looking for or how rewarding it can be to have large holdings of a certain in-game currency. Gamers put in hours and hours of work and, in a sense, it’s rewarding to see your effort pay off.
There is, however, an unbalance in the gaming industry in which our real-life achievements (money and time) can be used to benefit our in-game experience but our in-game achievements only exist within the game itself and, when it’s all said and done, it is as if they do not exist at all. The desire to tip the scale is there and it can be noted in the secondary markets that have popped up over time. It has become common practice for gamers to set up trades in which they exchange items or in-game currency for cash. However, these secondary markets have a lot of issues, including inflated prices and frequent scams.
Blockchain technology can change this in a simple manner. By turning in-game items and currency into unique crypto assets these can suddenly be owned just like real-life objects are.
Let’s start with one of the pioneers in this field, Spells of Genesis. This is a card game based on Blockchain technology, both in its infrastructure and storyline. Blockchain technology is used to tokenize trading cards, allowing these to be transferred directly on the Blockchain. Since the game was created with this functionality in mind, the user’s wallet is integrated, allowing the game to automatically track the transactions and ownership of cards/assets.
Although Spells of Genesis has set the foundation for the tokenization of in-game items, other projects like Dmarket are taking it one step further by incorporating existing games and allowing their respective items to be transferred just like the cards in the Spells of Genesis game, opening up a new world of possibilities for gamers.
DMarket is currently building the first decentralized marketplace for in-game items with the help of Blockchain and smart contract technologies. So, how does it work? By tokenizing in-game items on an immutable Blockchain, DMarket ensures that the item token can be freely transferred without any middleman and that it cannot be forged.
Tokens that represent an item can then be sold on the Dmarket exchange. Once an order has been matched, the Dmarket smart contract system is able to ensure that payment is only processed once the item has been correctly transferred to the buyer’s account. This is done with the help of an API that is able to track ownership changes in various games. The whitepaper explains:
“For trading operations in the system, the user will have to specify his credentials to enter a game. After that, the system will automatically synchronize the user’s game items with their personal cabinet on the trading platform. This synchronization will be completed via API, using the user’s game credentials. A synchronization of objects with the tradable property will be held between the Blockchain and the marketplace with the subsequent display of these items in the user’s cabinet.”
DMarket is able to open a new world of possibilities for gamers who want to monetize their efforts and even for casual players who may want to start playing a new game without having to leave a bunch of hard-earned items/currency behind.
Game monetization and platform gamification
The gaming scene has come a long way since the 1970s classic game "Pong". Today, there is no shortage of cool games out there, so it can be hard for developers and publishers to stand out and to monetize their games efficiently. Blockchain technology can help them set up revenue sources quickly and effectively, skipping the usual bureaucracy and the middlemen’s fees/delays.
Enjin, a gaming community creation platform launched in 2009, is currently building a Blockchain-centric ecosystem where developers will have access to a complete set of tools to allow them to kickstart their game monetization plans quickly and effectively, while also benefiting gamers and community leaders.
Much like DMarket, the Enjin ecosystem will use tokenization to allow in-game items and currencies to be owned by the user himself. However, the process is completely different. Game developers can “mint” virtual goods and currencies by locking up ENJ coins in a mint smart contract. These can then be transferred in and outside of the game and users can always destroy the token and recover the original ENJ that was locked in order to mint it, ensuring liquidity.
Tokenized items, cash, and privileges give developers a simple way to monetize their games, as these tokens can be sold by the game developers and they can even be traded on an ERC20-enabled exchange like EtherDelta. Developers and community leaders can even create time-limited and subscription-based virtual goods, allowing them to provide services like “power-ups, ranks, or unlock website content for subscribed users.”
Enjin also provides developers with the necessary tools to create a decentralized payment gateway quickly, allowing them to accept cryptocurrencies and Enjin-based coins and to implement features like carts, web invoices, email/SMS notifications, refunds and more.
eSports Economy and Trustless Betting
eSports are growing at an incredible rate, and, according to newzoo, the eSports economy will grow to $696 million and reach more than 380 million people by the end of the year. However, as a new industry arises, new problems arise with it. Lack of transparency and efficiency in the eSports betting industry has led to the creation of decentralized eSports platforms like FirstBlood and Skrilla, in which betting does not require a third-party entity.
In these platforms, the funds being gambled are held in smart contracts until the match ends, eliminating the need for an escrow agent. In FirstBlood, token holders are rewarded for inputting the results of the match into the smart contract, ensuring that the system cannot be rigged by a corrupt operator.
While the aforementioned projects are looking out for the betters, the DreamTeam project is focusing on bringing gamers together, leveraging Blockchain technology to build the first-ever eSports and gaming recruitment and management network. DreamTeam uses the DDT cryptocurrency token as the sole currency of the platform, leveraging smart contract technology to ensure trustless payments of player salaries and bonuses, sponsorship payments and prize money payouts.
This one is a bit obvious but we couldn’t really leave it out, could we? With their ability to cut out unnecessary middlemen and increase privacy and control for the user, cryptocurrencies and gaming just go along perfectly. In 2016, Valve realized this and added Bitcoin payments to its platform with the help of the Bitcoin-based payment service, BitPay.