Blockchains have been most successful as a store-of-value, in DeFi applications, speculation, and NFTs. However, certain identity & reputation protocols like ENS are beginning to gain traction as well. With this in mind, many people are wondering what the next big thing for blockchain will be. A lot of people in the crypto community seem to think that gaming is the answer. In this post, I will argue why blockchain gaming isn’t what many crypto people think it is. However, I will also show how it could still find an interesting niche.
Games are diverse
There are a lot of different types of games and gamers out there. It would be impossible to talk about all of them in one post. So, when I use the terms “games” and “gamers”, I’m talking about them in a general sense.
Why we play games
I see games as a form of entertainment. Gamers play them to have fun, to challenge themselves, and to find satisfaction.
A great quote from Todd Howard that captures the spirit of games:
Something people who don’t play many games don’t understand is that when you accomplish something in a game, it’s a real accomplishment. It’s something that has mattered to me and other people who love gaming. You can feel like a hero when you finish a game, and it’s a magical feeling.
In most cases, people use video games as an escape from the difficulties of real life.
Money is the antidote to fun
Real life doesn’t give you a second chance The most toxic element of real life is arguably money. Imagine this – you’re having a lot of fun in a game and you need to get an item that will give you some abilities to – you guessed it – have more fun. Sure, the game world has its own rules with their own consequences, but you can be sure that a mistake will never cost you in real life. This liberating feeling is essential to gaming. Real life doesn’t give you a second chance.
Whenever you mix real money with in-game content, it takes away from the immersion of the game. It’s important that a game’s economy is separate from the real world.
Play-to-earn is unsustainable, pay-to-win is loathed
It should now be evident that inflationaryplay-to-earn mechanisms are not economically sustainable. Some would argue that these mechanisms will “find an equilibrium”, but the truth is that it is only a matter of time before they fail – there are only a limited number of people who are willing to pay increasingly higher prices for the same product. Play-to-win systems are an improvement because they could be economically sustainable, but the downside is that they are not as fun. This is due to the separation of the game world and the real world, as mentioned above. Pay-to-win already exists in gaming – in the form of microtransactions – and it is safe to say that they are heavily disliked by core gamers, as proven by the Star Wars: Battlefront 2 debacle. Since then, the games industry has stopped using play-to-win mechanics, for very good reason. Most games now only have cosmetic microtransactions, which have no impact on gameplay.The only way to win money from the game is to pay to play it.
Though financial mechanics are always present in some way, they are most commonly seen in mobile gaming. Another way to encounter financial games is through gambling or trading, which blockchain technology has made more accessible by breaking down Borders, going around regulatory measures, and most significantly, allowing users to piece together different financial components. I don’t believe this last type of activity qualifies as gaming, but rather “GameFi”.
Creating a system where players can share assets between different games is difficult and would require a lot of new infrastructure.
It is commonly believed that game assets can be transferred to another game and continue to function if the original game shuts down. However, this is not the case as game assets from different games are not compatible with each other. In order for this to be possible, the developers of two different games would have to agree to use the same standard. Furthermore, even if this were possible, the assets would be rendered useless if the game shut down. Although, there is potential for common infrastructure that many games can use.
We need to build extremely complex infrastructure to enable these types of decentralized use cases. This is a very challenging task which may take several years to complete.
Epic Games is in a better position to create a standard SDK that different games can use to allow cross-game interoperability. However, there is not currently a lot of demand for this ability, so it is not a high priority. It would be much harder to do this without a central authority.
Decentralized gaming infrastructure is more than blockchains
Assuming the decentralization of gaming infrastructure is possible, “putting it on blockchain” is not a feasible option. Games require a much greater amount of computing power and storage than what the fastest blockchains can provide. For example, most “crypto games” are currently centralized and only the NFTs are stored on the blockchain.
Players will need to run peer-to-peer game clients, there will need to be decentralized storage layers, and dedicated execution layers.
Zero-knowledge proofs will play a key role in the infrastructure for games on blockchain. The infrastructure will need to be modularized, with different parts of the computation being done transparently at the game client end, or using traditional anti-cheat methods, or requiring the game clients to generate zero-knowledge proofs. Storage may be on decentralized systems like Filecoin/IPFS, while others may need consensus on specialized execution layers, i.e. application-specific recursive rollups/volitions or L3s. Composability & interoperability mechanisms between different types of computation will also be needed. In the end, the blockchain part – the L3s – may only be used for very specific purposes. State channels on top of L3s also show promise for certain types of multiplayer games.
The person writing this is recommending that whoever is building a distributed gaming system should start by asking themselves how Epic Online Services would go about it, and then decentralized it. They also advise not to bother building the entire gaming stack from scratch, but to focus on the parts that would be unique and valuable to a distributed gaming system, while still being able to plug into existing gaming engines and middleware.
Game development studios as DAOs?
Developing games is a creative endeavour, so it is important for the game to have a coherent, creative voice. Bazaar-style development does not work well for this. A well-ordered structure with creative directors and department leads is essential to producing a high-quality game. Some studios have tried a mild variant of this – and failed. Smaller indie developers work differently, but they also have no need for DAOs. A more promising avenue is using blockchain platforms for fundraising – there’s potential here to do better than Kickstarter.
People who are unfamiliar with the cryptocurrency world often underestimate how difficult it is to create a video game. I have seen plans that claim to be able to produce “AAA games in 6 months” or make general statements like “hundreds of AAA crypto games in development”. This is not how it works. The average AAA game costs $100 million, requires more than 100 people, and takes 3 years to develop. And most game developers don’t want to make cryptocurrency games. The talent simply isn’t there to produce so many high-quality AAA games. Sure, smaller independent games can be made for much less, but people involved in cryptocurrency tend to overhype “AAA crypto games”.
Some games are better as DAOs, meaning online game platforms with creative communities. Roblox is an example of a game that would be better decentralized, with better commissions and rights for creators. Briq is building this type of game.
It is also possible that multiplayer games will continue to develop. Once a game is created, it can be open sourced so that players who purchase the game can suggest and vote on changes to the rules. However, it is often difficult to please everyone and game developers are usually very motivated to do their best. In general, game developers for these types of games are practical and they pay close attention to suggestions from the community. Even so, the option to fork away is appealing and something I would like to see happen.
Game distribution
Although it is a valid idea, it will be very hard for a new game distribution service to be successful in 2022. Epic Games Store has spent a lot of money, but they are still far behind Steam. Other companies like GOG, Itch, and Microsoft Store only have a small part of the market. It would be better if there were many private companies competing against each other, rather than one decentralized platform that doesn’t have enough resources. Even so, there could be a market for this idea–for example, older games or trading cards.
Novel mechanics using smart contracts
The current conclusion is that blockchain technology is not necessary for the majority of video games. However, it can be used to improve certain aspects of specific games.
It’s interesting to think about new mechanics that can be created with smart contracts. Dark Forest is a good example of this. Imagine an AI that can create stories, puzzles, mechanics, and worlds in a digital world. With zero-knowledge cryptography, no one knows the solution. Yet, people from around the world can cooperate and coordinate to solve these. Granted, we are far from something like this, but it shows that there is potential for gameplay that can only exist with blockchain technology.
The games that are most successful are the ones that are entertaining and do not focus on financialization. Although some games may do well with a tokenization system, it is important to be careful with making these items tradeable.
Blockchain Provides A Safe And Secure Environment For Game Developers And Entrepreneurs:
Blockchain platforms use highly powerful data encryption technologies, like the private key-public key, to secure crypto token transactions. With the computing technology we have today, it’s impossible to hack these data encryption techniques. For more information, read “Explaining the Crypto in Cryptocurrency”.
Without a centralized point to attack, it would be impossible for hackers to take down a decentralized blockchain network. Each node in the network holds a complete copy of the database, so there is no single point of failure.
It is not possible for hackers to delete or modify a blockchain’s transaction history, nor can they launch a denial-of-service attack against the network. Instead, blockchain networks use “proof of work” or other consensus algorithms to keep the network secure.
For more information on POW algorithms, please see “Proof of Work vs Proof of Stake Comparison.”
When you develop your game on the blockchain, you have a secure environment.
Blockchain In Gaming Helps In Securely Buying And Selling In-Game Assets:
Ensuring that transactions involving cryptocurrencies are secure is now easier than ever before. If you develop your game using blockchain technology, players will be able to buy and sell in-game assets using digital currencies in a secure manner.
Keeping your digital currencies safe is important, and you can do so by using a web wallet like MyEtherWallet or a hardware wallet like Ledger Nano S.
Players need to take measures to ensure their private keys are secure in order to keep their transactions safe. This includes being proactive about computer security by regularly backing up data, avoiding risky websites, and not storing too many cryptocurrencies in web or mobile wallets.
To learn more about developing a cryptocurrency wallet, check out “How To Develop A Bitcoin Wallet App.”
Blockchain In Gaming Enables Interoperable Profiles Of Players:
You can use this to create cross-game economies and experiences. Crypto traders and investors can use their public address for transactions across different blockchain networks. If you create your games on the blockchain, your players can take their unique public address from one game to the other. You can use this to create cross-game economies and experiences.
People can use their cryptocurrencies for different games from the same public address.
Blockchain Gaming Enables The Projection Of Value On Intangible Assets:
Vancouver, British Columbia, Canada-based Axiom Zen launched CryptoKitties on November 28th, 2017. By December 6th, players had already spent $ 6.7 million on this game.
This indicates that if you construct an amusing enough game on the blockchain, participants won’t be unwilling to ascribe real value to intangible digital collectibles. The secret is a game that’s enjoyable to play.
Build a fun game and integrate blockchain technology to enable players to make instant, disintermediated cryptocurrency transactions. For more information on how to make your game app go viral like CryptoKitties, read “How to Build a DApp Game App Like CryptoKitties?”
Blockchain Will Let Players Securely Store In-Game Assets:
Hackers enjoy attacking centralized servers because there is only one target for them to focus on. If they are able to break the encryption on the server, they will have full access to all information stored on it.
Blockchain technology has the potential to change the gaming industry. For example, when players buy digital collectibles in a blockchain-based game, they can store them securely in their crypto wallets.
Scroll down on the Enjin Coin website and you will notice they have a wallet for players to store Bitcoin and Ether. Players can also secure their in-game items, which is one of several benefits of blockchain in online gaming.
Blockchain Gaming Allows Players To Truly Own Their In-Game Assets:
In contrast to the current reality where players do not actually own their in-game purchases, a key advantage of using blockchain in gaming is that players would own their assets. A blockchain-based game would utilize smart contracts to govern transactions within the game, which would make the distinction.
When the conditions in a smart contract are met, the contract is automatically executed and the results are irreversible. This means that when a player buys an in-game asset using a smart contract, the asset is transferred to the player’s public address. Smart contracts also allow for full transparency, so every player can view the rules.
The results of a smart contract’s execution are recorded on a decentralized blockchain, which cannot be changed by any centralized agent. This means that the ownership of in-game assets cannot be changed by anyone.
How to Deploy Smart Contract on Ethereum? Smart contracts deployed on Ethereum are irreversible.
Blockchain Allows Players Greater Control Over Their Favorite Games:
A game like CryptoKitties is a ‘Decentralized App’ (DApp). If you want to launch a blockchain-based game, the DApp route is likely the best option for you.
DApps have certain characteristics that set them apart from other apps, as follows:
- While the front-end code can be in any language, a DApp must have smart contracts as its‘ backend code.
- A DApp must run on a decentralized blockchain.
- A DApp must use crypto tokens created using a standard cryptographic algorithm, and no one entity can own a majority of those tokens.
- It must store its‘ data in a decentralized blockchain, following cryptographic standards.
- The code must be open-source.
- Most importantly, a DApp must run autonomously, and the user community must reach a consensus to modify a DApp.
If you want to learn more about DApps, check out “How to Build a Decentralized Application (DApps)”.
The text is saying that if you have a blockchain DApp game, you can’t just shut it down without the consent of the people who are playing it. This would give the players more control over the game and its future.
Blockchain Gaming Opens New Territory For Developers:
If you want to get a job as a developer for a gaming company, it is helpful to have experience in the gaming industry. Centralized gaming companies are very competitive, so having experience will make you more attractive to them.
There are many ways you can learn to develop a DApp game. For example, the Loom Network has created an interactive course that covers everything you need to know to make your own DApp game. Another great resource is the CryptoZombies coding school, which teaches you how to create games using the Ethereum blockchain.
I mentioned Enjin earlier, but there are other blockchain start-ups that provide SDKs for developing a blockchain-based game. Loom Network provides a Unity SDK that you can use to build your game. To get started, check out the GitHub material for Unity SDK.
You can also build your blockchain game from scratch as follows:
- Learn Ethereum development, including coding of smart contracts and DApp development.
- Create your Ethereum account.
- Install the tools you need.
- Code your smart contracts.
- Test, deploy, and run smart contracts you coded.
If you’re looking to build a blockchain-based game, you can find guidance by checking out the code of similar games. For example, if you’re looking to build something like CryptoKitties, you can check out their smart contracts in their EthFiddle repository.
Concluding
Most crypto gaming today is not beneficial and is not liked by the gaming community. Games do not need blockchain technology and it would be harmful to most games.
We can improve ourselves and become experts in new areas.
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