Blockchain in Gaming: Redefining the Industry

By the end of 2022, the blockchain-based gaming market size had reached a value of $4.6 billion. Experts predict that the gaming blockchain market will skyrocket over the next five years, climbing to $65.7 billion by the end of 2027. That represents a compound annual growth rate of 70.3%!

What is a blockchain game, and why has this market become so popular virtually overnight? In this guide to blockchain in gaming, you’ll learn about blockchain games, the role of cryptocurrency in this emerging genre, and the benefits associated with merging video games with decentralized finance (DeFi).

What Is Blockchain in Gaming?

First of all, what is blockchain gaming?

Blockchain is a decentralized digital ledger that facilitates secure transactions and creates immutable records. Integrating blockchain in games allows developers to support in-game purchases and elevate the player experience.

Gamers can trade assets like skins, weapons, and collectibles using blockchain technology. Sometimes, they can even sell in-game assets they’ve earned for cash.

The Role of Cryptocurrency in Blockchain Video Games

At first glance, blockchain and gaming may seem like an unusual pairing. In reality, the technologies were made for each other.

Blockchain tech supports an astounding variety of gaming functions, including the following:

NFTs

Non-fungible tokens, or NFTs, are unique digital tokens representing virtual or real-world assets. In blockchain gaming, NFTs represent in-game assets like characters, costumes, weapons, and more.

NFTs allow you to actually own your digital assets — a record of your purchase or trade will be securely stored on the blockchain.

Play & Earn

Blockchain in gaming has paved the way for an entirely new genre of video games known as “crypto games.” You can earn cryptocurrency by playing a crypto game and accomplishing essential tasks.

Once you earn your crypto, you can trade it, keep it, or exchange it for real money. You can also spend it to purchase new items and gear within your game.

Virtual Events & Tournaments

Virtual tournaments and other events have been a staple of the gaming industry for years. Thanks to blockchain, organizing and regulating gaming events is much easier. Organizers can use blockchain to track sign-ups, monitor match performance, and distribute awards to top performers.

The Benefits of Blockchain in Gaming

Now that we’ve answered the question “What are blockchain games?”, let's shift our attention to why blockchain technology has taken the industry by storm. While there’s no definitive answer, it can be chalked up to blockchain's significant benefits.

Here are a few of the most notable perks of using blockchain in gaming.

Secure Digital Identities

By integrating blockchain into the gaming environment, developers give players the ability to protect their digital identities. That has become increasingly important in the modern gaming environment, as players frequently link payment cards and other personal identifying information to their accounts.

Elevating the security of digital identities with blockchain allows developers to attract more players and encourage in-game transactions.

Secure Transactions

Blockchain technology can be (and often is) used to create immutable records of digital transactions. Gamers can use this feature to make in-game purchases or trade gear with other players. Administrators can refer to the blockchain to settle the dispute if there's a discrepancy.

Improved User Experience

Blockchain elevates the overall user experience by facilitating secure, efficient transactions. With blockchain gaming, users can create characters, swap gear, and immerse themselves in the play experience without worrying about being the victim of fraud or losing their progress.

Total Player Control

Blockchain-based gaming also gives players more control over their gaming experience.

Under the traditional in-game purchasing model, players can no longer derive any value from the digital goods they buy after they finish a game or upgrade to other add-ons. However, when these goods are stored on the blockchain, players retain ownership of the digital products, meaning they can sell or trade them with other gamers at will.

Improved Player Security

Blockchain uses embedded encryption systems to protect sensitive data at rest and in transit. Developers can use blockchain security features to protect sensitive data, such as game progress files, player information, transaction records, and more.

Secure Game Developer Environment

Blockchain isn't just used to elevate the player experience. It’s also improving the game development workflow.

With blockchain technology, developers can safeguard their work, minimize the risk of data loss, and reduce the likelihood of a leak. Enhancing the game developer environment improves the quality of the final deliverable, meaning players will receive a more complete and refined product.

Interoperability

Blockchain technology is known for its high level of interoperability, meaning it can easily exchange data with other software or computer systems. This attribute can help facilitate cross-platform compatibility of digital products, such as gear or characters.

Trading Resources

Incorporating blockchain into the video game ecosystem allows players to trade the resources they earn or buy while progressing through a game.

Since blockchain creates an immutable record of ownership, players can enter into transactions with confidence knowing their goods won’t be duplicated or stolen. They can leverage this feature to trade items for other resources or sell them for a profit.

Ability to Earn Rewards

If you play a crypto game, you can earn rewards for the missions you complete and the hours you log. As in traditional games, you can put the points you earn toward in-game purchases and upgrades. But thanks to blockchain, you can also use your hard-earned points to buy tangible products or cash them out for real money.

The Challenges of Blockchain in Gaming

Anytime an industry evolves, there will inevitably be some growing pains. The same concept applies to blockchain in gaming.

Several hurdles are currently limiting the adoption of blockchain gaming technology. Here’s an overview of some of the most notable.

Technical Challenges

Playing crypto games can be a bit of a challenge, especially for less tech-savvy players. But it's not because the game developers cranked the difficulty up to 11 — instead, the challenge lies in setting up your game.

You must set up an account and create a dedicated crypto wallet to play a crypto game. You may also need to purchase specific amounts of certain cryptocurrencies. All these extra steps might not deter the avid gamer, but casual players may decide that playing crypto games isn’t worth the hassle.

Limited Selection

While the blockchain gaming market is projected to explode over the next five years, it’s still a relatively new sector. As a result, there aren’t many titles on the market yet, but the industry is expected to snowball in the next few years.

If you like a niche genre of games, you might struggle to find a title that aligns with your interests. That said, if you’re open to playing any type of game as long as it offers engaging gameplay and an intriguing storyline, there are more than enough blockchain-based games on the market to keep you busy.

Competition

The gaming industry is highly competitive. Every month, dozens of new titles hit the market, meaning gamers are inundated with options regularly.

For this reason, blockchain games may find it challenging to gain traction among gamers, especially if they’re released alongside the kind of best-selling perennial titles that tend to dominate the market.

Scalability

Blockchain technology is notoriously complex, which makes it tough to scale. Since developers want to reach as many players as possible, this lack of scalability could discourage more prominent brands from integrating blockchain tech into their products.

Regulatory Risk

Blockchain technology remains relatively new. As such, blockchain and standard digital trading tools like cryptocurrency and NFTs aren’t regulated. If state or federal governments pass new regulations restricting blockchain use, these laws could unravel this gaming industry niche.

Vulnerable Centralized Service Providers

While blockchain technology is remarkably secure, the servers developers use to deliver games to players are sometimes vulnerable to cyberattacks. These security issues could hinder the widespread adoption of blockchain gaming among concerned players.

The Future of Blockchain Gaming

Blockchain gaming will undoubtedly become more prevalent in the near future. That should be no surprise, as integrating blockchain into the gaming experience provides many clear advantages for players and developers.

The gaming industry comprises many creative individuals and teams. Together, developers and the businesses that back them will undoubtedly devise solutions to the challenges associated with blockchain in gaming to increase accessibility and expedite the time to market.

Whether you’re an avid gamer or a casual player, blockchain promises to reshape your gaming experience in the coming years. Are you ready to get in on the action?

Get Started With FreeNFT

Blockchain in gaming revolutionizes the industry by enabling decentralized ownership and secure transactions of in-game assets. This innovation boosts player engagement and fosters a vibrant gaming economy. Moreover, blockchain-based games promote interoperability, allowing players to seamlessly use their holdings across multiple gaming platforms.

If you want to use blockchain in games, sign up for FreeNFT, the free non-fungible token-trading platform that makes trading, collecting, or selling your gaming NFTs easy. With FreeNFT, you can connect with an ever-growing community of collectors, obtain rare NFTs, and take your gaming experience to the next level.