How Gaming Leads to Blockchain Adoption
It’s December 2018, a year after bitcoin’s meteoric rise firmly positioned cryptocurrency and blockchain in the public eye. Supporters of this next generation technology have been quick to list the potential benefits in FinTech and other industries — but why has blockchain not moved towards widespread utilization? Companies and consumers are still waiting for THE mainstream opening / application for blockchain — and where cryptocurrency and finance have failed, gaming will succeed in a global breakout of adoption.
The user base in gaming is tech-savvy and ready for the next wave of disruption — a shift in power from industry developer giants to the players themselves. Blockchain is a powerful force in leading this change by offering strong incentives for gamers (to complete objectives and create unique content), and robust security (to defend against hacking and fraudulent transactions that plague players monthly). Growing support and development of blockchain in gaming is expected to rise over the next 5 years, as big tech and startups are ramping up resources and funding to move the whole industry towards crypto-gaming.
Origins of Crypto-Gaming
A new niche in the gaming industry, blockchain-based games (with cryptocurrency rewards) are about 5 years old, starting in:
2013 - HunterCoin was launched, allowing players to earn crypto for completing various objectives which could then be used for the purchase of in-game content. Early games actually paid incentives in bitcoin!
Late 2017 - CryptoKitties (created by Axiom Zen) brought the genre to the forefront with the greater public, as a game in which a player collected, traded, and breeded cats — each uniquely recorded and owned securely with blockchain (the highest price paid was $170K for a cryptokitty!);
2018 - other games were launched and became available on the Google Play Store such as Spells of Genesis, Miner Simulator, and Itadaki Dungeon.
Blockchain games are still in early development and lack the depth and skill, and popular titles available is small compared to traditional gaming platforms. Despite all the buzz behind CryptoKitties this year, daily active users have fallen off under 2000, from a peak of 14,000.
Hashcraft was created by Ubisoft, a popular gaming studio for PlayStation and Microsoft Xbox, and involves a player being stranded on an open-world island that he / she is able to explore freely, and customize as their own virtual world — they can invite others and get paid if they upload their island for public use.
Industry Disruption for Gamers
Player ownership of game assets (instead of solely game developers) is the future with all created content being uploaded to the blockchain (decentralized and accessible to all, at anytime) — currently all game functions are running on servers that are centrally controlled and maintained by gaming companies.
This ecosystem would create a self-governing marketplace of player-created content, which can easily be listed publicly, exchanged, and increase in value. Adding the use of smart contracts (a computer protocol intended to facilitate and verify the performance of a contract without a third party) would allow transactions between peers to take place autonomously on the blockchain, without an intermediary.
Fraud continues to be a concerning issue in the online gaming community, as the rate of accounts getting hacked continues to rise (in December 2015, there were 77,000 Steam accounts hacked monthly), exposing a customer’s private data and a potential for financial losses. Maintaining content and data on blockchain greatly reduces the risk of fraud as posted transactions are immutable and unable to be tampered with.
The future is bright for blockchain gaming with some big-names getting involved:
GMO (a Japanese Internet Services company) is releasing “Whimsical War”, containing bitcoin-based in-game rewards;
Sony is planning to move its PlayStation Network database of records on blockchain, and a game (Plague Hunters) to launch in 2019 on the Ethereum blockchain;
Epic Games, creator of Fortnite, is working on blockchain for an upcoming project.
Ultimately, the catalyst of the gaming industry towards blockchain-based games will be on the ability to deliver what players want most: transferring in-game purchases to other games and other platforms. This major industry benefit of transferability would make player-generated content (and hours of game time played) more valuable and useful — blockchain would be the structure to maintain all records and facilitate transactions. With the amount of games in development, big-name companies funding projects, and player communities demanding change — blockchain can start full adoption mode in 2019.
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Original article - Singularity Hub