The blockchain ecosystem is expanding rapidly, involving more and more individuals every day. Its applications are not limited to cryptocurrency networks; it offers groundbreaking solutions across various sectors. In such a way, the gaming industry is another area experiencing transformation due to blockchain technology.
The Gaming Industry Today
The current state of the gaming industry relies heavily on centralized models for online games. This means that all data related to the game is stored on servers controlled solely by the game administrators. This information encompasses account details and server history, which records and stores all in-game assets, such as virtual money, items, and collectibles obtained by the players. However, centralized servers have numerous limitations and vulnerabilities, such as system infiltration by hackers, technical issues causing server malfunction, game shutdown, undeserved account bans, lack of transparency regarding game mechanics and rates, and manipulation of the game economy by developers and administrators. Consequently, players have no real ownership of their accounts and assets, and gaming companies retain all control. Thankfully, blockchain technology can potentially eliminate or mitigate most of these issues.
How Can Blockchain Change the Gaming Industry?
A blockchain-based system, functioning as a distributed database, can be utilized to authenticate and safeguard digital data, such as tokenized assets, in-game history, and digital items. The concept is to remove the control from the gaming companies and restore it to the players. Consequently, each player has complete authority over their accounts and digital assets, enabling them to trade their resources at their own discretion. Various approaches exist to building and managing a blockchain game
How Is Blockchain Impacting the Gaming Industry?
Blockchain technology has the potential to revolutionize the gaming industry in numerous ways. Here are some of the most significant impacts that it may have.
In blockchain-based games, players have full control over their in-game assets, and they are represented by unique, non-fungible tokens (NFTs) that are maintained by a distributed network. This means that gamers have permanent ownership of their assets, including in-game cards, skins, equipment, and characters.
Blockchain-based games enable the creation of decentralized marketplaces, allowing players to freely trade their assets on a peer-to-peer basis. This eliminates the need for trust between players and also provides censorship resistance.
Optimizing Payment Processes
Blockchain and smart contracts can facilitate all sorts of payments, reducing fees and speeding up financial transactions. This includes trades between players (peer-to-peer), as well as payments between players and developers.
Players can trade assets between different games by linking in-game data and items to blockchain tokens. This may allow gamers to recycle their digital assets while experimenting with different games.
Fair Playing Ground
In some cases, Blockchain enables the creation of open-source, distributed, and transparent gaming servers. In such cases, changes to the gaming mechanics can only be made if the majority of the network votes in favor of them. This prevents hackers and cheaters from disrupting the game.
Unlike centralized servers, blockchain-based games can continue to exist even if the developers move away. As long as the blockchain network remains running, the game remains alive. In some cases, new developers take over the project to continue improving it.
Limitations and Challenges
The Potential of Blockchain in Gaming Blockchain technology has paved the way for numerous possibilities within the gaming industry, but it still faces challenges that need to be addressed. Some of these include:
- Scalability: Blockchains are slower than centralized networks, which may prevent the widespread adoption of games.
- Lack of adoption: Although hundreds of blockchain games exist, only some players are interested in them.
- Centralization: Some blockchain-based games utilize ERC-721 or other blockchain tokens but run on a centralized server.
- Simplicity: Most blockchain games are too simple and need more high-quality graphics or a complex gaming experience.
- Barriers to entry: Developers face difficulties raising funds to start and maintain a blockchain game, given scalability and adoption problems.
- Competition: Independent game developers (commonly referred to as "indie" game developers) face a tough time competing against giant gaming companies in the centralized world.
Thankfully, various solutions are being developed to tackle these issues. Teams are experimenting with Ethereum Plasma, Lightning Network, and other Layer 2 solutions to address the scalability problem.
Examples of Blockchain Games
Despite the fact that the niche is new and relatively small compared to traditional gaming, numerous DApps and games are built on top of blockchain networks. Ethereum blockchain is the most popular network for decentralized applications and gaming platforms like Enjin and Loom. Still, most games are being developed on other networks like WAX, EOS, TRON, ONT, NEO, VeChain, and IOST. There are various blockchain-based games, including the virtual reality platform Decentraland, the collectible game Cryptokitties, the trading card game Gods Unchained, the role-playing game My Crypto Heroes, the strategy game Cheeze Wizards, and so on.
The potential of blockchain technology in the gaming industry is undeniable, as it offers numerous benefits to both gamers and developers, primarily in the areas of decentralization, transparency, and interoperability. However, overcoming significant challenges such as scalability, lack of adoption, centralization, simplicity, barriers to entry, and competition is crucial. If these issues are resolved, Blockchain could revolutionize the gaming industry and create a new realm of entertainment that offers players more freedom.