Blockchain technology has the potential to change many different industries radically, and one it’s currently changing is online gaming.
We’re witnessing a revolution occur right in front of us as the pay-to-play and free-to-play models give way to a new one: play-to-earn. We’re also watching the real-time transformation of online gaming into a more honest, fair, and transparent industry. Let’s dive into the depths of how blockchain technology is changing the $200 billion global gaming industry.
What is the play-to-earn model?
The play-to-earn model is a relatively new model for gaming, and blockchain technology is speeding up its adoption. Before, players either purchased the game, subscribed monthly or funded gameplay through in-game purchases, but now with the blockchain-based play-to-earn model, players make micropayments of fractions of a cent to make moves such as striking opponents. By accomplishing certain tasks such as finishing on game leaderboards or winning tournaments, players can also earn from gaming, hence the name play-to-earn.
Play-to-earn games aren’t just a fantasy or a hypothetical concept. There are several great games available right now. For example, we learned about Legends at War by Sabre Games on the recent Polish blockchain gaming webinar, and regular CoinGeek readers know all about BSV’s most popular play-to-earn game CryptoFights. How fast are they catching on? In the aforementioned webinar, we learned that play-to-earn games are already rivaling local salaries in some developing nations.
The play-to-earn model has the potential to disrupt the entire gaming space. Players can embrace a ‘pay as you go’ model that allows them to make money, while game developers can earn micropayments on every game interaction regardless of the outcome. Just how small can these micropayments be? On the BSV blockchain, payments can be processed for fractions of a penny, so it doesn’t have to be expensive to play these games, but at the same time, both players and developers could earn fortunes via millions or even billions of micropayments landing in their wallets.
It’s still early days for the play-to-earn model, but gaming only undergoes big disruptions every decade or two, so it will be exciting to watch this unfold. If it succeeds, the old models are likely to go the way of the game cartridge or CD-ROM as play-to-earn games take over the world.
How can micropayments transform gaming?
The play-to-earn model as we know it wouldn’t be possible without Satoshi Nakamoto’s real innovation: micropayments. These tiny payments make it possible to disrupt the revenue models that have dominated gaming for so long.
While we’ve already touched on how players can earn micropayments by finishing on game leaderboards, micropayments have the power to disrupt gaming in several other ways that aren’t immediately obvious. For one, think about how games are created today. Big corporation X hires a bunch of developers, pays them a fixed salary, puts together a game, and then makes billions. A few key employees get a bonus, but otherwise, the shareholders get the money. Sounds familiar, doesn’t it?
Micropayments can change this model because payments can be split into dozens or even hundreds of directions. Suddenly, the graphics designer, the audio technician, the game coder, the scriptwriter, and everyone else involved can earn ongoing payments each time players interact with the game. To see how this works in reality, visit the Haste Arcade, play in the penny league on any game, and watch how dozens of players who have finished above you on the leaderboard get paid a slice of your penny (or vice versa). Truly tiny payments are finally possible!
Micropayments can transform gaming in other ways, too. Aside from allowing players and developers to earn money in new ways, they enable game moves to be recorded on an immutable public blockchain. Imagine how much fairer and more transparent eSports tournaments will be when every move is recorded on a public database that no single party can alter. Micropayments are the cost of such transparency; someone has to pay the miners/transaction processors to write the ledger entry.
Games will have to be built on a scalable blockchain capable of true micro and nano payments for all of this to be possible. Right now, Bitcoin SV is the leader by a long way.
Do NFTs play a role in transforming gaming?
There’s been a lot of buzz about NFTs in the last year or so, with Bored Ape JPEGs being snapped up by famous artists like Justin Bieber for millions and artists like Beeple selling digital collages for $69 million. NFTs are the ‘hot thing’ right now, but few have stopped considering their true utility.
Under the radar of all the hype and buzz, NFTs are changing gaming in multiple ways. For example:
- Players can earn and win valuable NFTs that they can keep or sell. For example, in CryptoFights, players can forge and win valuable weapons and armor.
- Certain NFTs can entitle players to perks. For example, they might unlock access to an exclusive game tournament or a hidden level.
- NFTs can make game assets tradable much more easily. It’s well known that ‘skins’ in games like CS:GO are traded on external marketplaces. With NFTs, all of this can be done within the games, and ownership can be tracked and transferred on the blockchain.
These are just a few ways NFTs can change existing gaming models. As things evolve, players and developers will come up with endless alternative use cases that are beyond the scope of what we can imagine today.
Making gaming more transparent
Transparency is always a good thing, and that’s especially true when it comes to game tournaments. FYX Gaming CEO Adam Kling has repeatedly mentioned how eSports tournaments are rife with accusations of cheating, but since the data exists on servers accessible only to game developers, it can be challenging to prove what happened and who was at fault.
That changes when games are built on scalable public blockchains like BSV. Remember how we said above that micropayments pay miners to write transactions to the blockchain? Think about how that will change these disputes about cheating in eSports tournaments; rather than players firing around unprovable accusations and being frustrated when nothing is done about what they view as foul play, third-party auditors or anyone with analytics tools will be able to pull the data from the blockchain and prove exactly what happened and when. In other words, claims of cheating will finally be provable or falsifiable.
Are you beginning to realize what public blockchains like BSV are yet? They’re not just about payments; if they scale, they’re also powerful data management tools that usher in a new era of transparency across all industries that build on them. Gaming will be transformed for the better when it moves onto the blockchain.
Responsible gaming on the blockchain
No discussion about gaming would be complete without covering real money gaming. Every day, millions of players worldwide have fun playing slot machines, card and table games, and other games like dice and coin tosses on apps like Peergame.
Sadly, some players become addicted to these games. This can lead to all kinds of problems such as financial hardship, relationship breakdowns, mental health issues, and worse. According to research by the U.K. government, 0.5% of the population can be classified as problem players, with 3.8% being ‘at risk.’ In an effort to combat this, many iGaming operators have embraced the concept of ‘responsible gaming’ to protect players. Ideas like self-exclusion and daily limits have been introduced across the industry, but they don’t go far enough, and they aren’t 100% effective.
With blockchain technology, it’s possible to build all kinds of new tools to enhance responsible gaming and protect vulnerable players. Again, it comes down to effectively storing and sharing data. When gaming operators can all access the same data, it makes it easier to identify these players and intervene by blocking further payments when they’ve reached their self-imposed limits or by alerting other operators in real-time that they’re displaying erratic behavior.
Responsible gaming solutions are already being built by nChain and others. Check out this discussion for more insights into how blockchain-based tools and solutions will transform real money gaming.
Learn more at the BSV Global Blockchain Convention in Dubai
If this article piqued your interest in how blockchain technology and micropayments can transform the gaming industry, the best way to learn more is to hear from the experts at the BSV Global Blockchain Convention in Dubai. It will run from May 24-26, and if you can’t make it in person, you can always attend online. We hope to see you there!
New to blockchain? Check out CoinGeek’s Blockchain for Beginners section, the ultimate resource guide to learn more about blockchain technology.