Cryptocurrencies are a new, decentralized form of money that is slowly gaining adoption with the mainstream. Their profit-making capabilities have made crypto exchanges and trading platforms like Bitlevex increasingly popular in the past few years.
That said, the appeal of making profits can only go so far regarding mass adoption. Cryptocurrencies need to have more use-cases so that the general public starts considering them as legitimate forms of money and investment instruments.
On the other side of the spectrum, the gaming industry has quickly surpassed other entertainment sectors in terms of reach and size. With around $150 billion revenue per year, it’s considered to be larger than the box office and the music industry combined.
Consequently, blockchain games are quickly rising in popularity and provide gamers with a new way to earn money through their favorite hobby. In this article, we take a look at the impact of blockchains on the gaming industry and how this combination can lead to increased adoption of cryptos as a whole. Let’s get started.
What are NFTs?
Blockchain in gaming is mainly made possible through the proliferation of non-fungible tokens or NFTs. These are digital assets that are recorded on the blockchain possess a number of unique characteristics making them easily distinguishable from one another. More importantly, they benefit from the blockchain in many regards, including:
- They can be transferred easily from one user to another.
- They are durable, cannot be destroyed, or have their access revoked.
- Their origin can be easily verified through the immutable digital ledger.
- They can provide value to the user through their uniqueness and rarity.
When used in games, NFTs can provide real-world value to the players for their hard work in the game. In-game items or characters can be tokenized on the blockchain, providing direct ownership to the gamer of these assets.
What is GameFi?
Blockchain ownership in games has contributed to the birth of a new financial ecosystem – GameFi. In a nutshell, GameFi is the financialization of gaming. Blockchain-based games provide the players with multiple ways to make profits from time spent in different games.
They reward gamers with cryptocurrencies or NFTs that can be later sold on open markets such as Opensea for immediate profit. Previously, game items or collectibles were confined to the game’s ecosystem and couldn’t be exchanged for real-world money or moved around. Game publishers such as Electronic Arts have perfected these microtransactions into a billion-dollar industry. Blockchain technology enables players to avoid the toxic pay-to-win model and replace it with a more user-friendly play-to-earn model.
Today, blockchain games such as Axie Infinity are seeing incredible success thanks to this model. By being good at the game, users can win NFT rewards and cryptocurrency tokens and make a profit with their gaming hobby.
How has gaming contributed to crypto adoption?
Almost anyone in the crypto community is familiar with Axie Infinity, the multi-billion dollar game that has taken the world by a storm. In this game, players need to invest in a team of digital monsters called Axies and take part in quests and battles to gain SLP tokens. These tokens can then be sold for cash or other cryptocurrencies or used in-game to create new Axies which are recorded as NFTs.
It’s a lucrative opportunity that many people have adopted all around the world. In some less-fortunate countries, where wages are minimal, playing this game is a better career opportunity than most regular jobs.
This popularity is certainly going to bring bigger game developers to slowly start incorporating GameFi elements into their games. Soon, we can expect AAA titles to have some sort of NFT capability, providing users with more control over their digital assets.
Creation of a metaverse
Additionally, this gaming economy is actively contributing towards creating a metaverse. A metaverse is an alternate, virtual world where users can connect and interact. The Ready Player One film is an imaginary representation of a metaverse, which isn’t very far from the truth.
Blockchain assets can be used within a metaverse to connect the real and the virtual world through their value. Gaming NFTs might have their value in the game for their power or uniqueness, but they can also be sold in the real world and provide steady revenue for gamers.
The GameFi ecosystem is continuously growing and is undeniably becoming a major factor in crypto adoption. Blockchain games are putting cryptocurrencies and NFTs in millions of gamers’ pockets.
The incredible success of games such as Axie Infinity is bound to have an impact on the way game publishers view NFTs. Consequently, we can expect some major game franchises to slowly start adopting NFTs in their game systems. This could increase the exposure of the mainstream public to cryptocurrencies dramatically, contributing directly to a stable and more secure crypto market.