article.provider.name Where brands share their insights. What's This?

How Blockchain Gaming Will Completely Disrupt the Video Games Industry

How Blockchain Gaming Will Completely Disrupt the Video Games Industry
Image credit: Courtesy of Chimaera
By Chimaera

The disruptions blockchain technology is causing in different industries is becoming increasingly obvious. The $116 billion video game industry is no exception. More and more blockchain game projects are emerging in the crypto space and this is just the beginning. Given the broad interest shown by various audiences, it could very well be on its way to mainstream adoption and largely disrupt the gaming industry as we know it.

Many blockchain game and platform projects have arisen over the past year with several simple games already running and playable. However, while individual games may be entertaining, they aren't equipped to bring forth industry-level disruption. The most interesting projects that will cause tsunami sized waves are the various platforms. Several of the top-rated blockchain gaming platforms include Chimaera, DMarket, GameCredits, and Refereum. Each offers a different spin on how to use blockchain technology for video games.

Referreum looks to streamline and disrupt video game marketing with a blockchain-based referral program.

GameCredits aims to replace fiat currency with its GAME token for purchasing games and making in-app purchases.

DMarket facilitates secure asset storage and trading for in-game items.

Chimaera has a native currency and supports the creation of blockchain-based game currencies and assets. It also allows full decentralization of games to run serverless on the blockchain.

Blockchain-based Ownership - What’s Yours is YOURS

As it stands with games to date, there's no real ownership of any digital goods. Instead, those assets are merely entries in databases linked to accounts that rely on relatively low security. Hackers regularly steal accounts from people and there is no reliable way to estimate the levels of their thefts.

With blockchain-based ownership, ownership is absolute and guaranteed on the blockchain. While thefts are still possible, they're much more difficult as direct hacking vectors are cut out of the equation. Blockchain-based game accounts are effectively unhackable.

A major benefit of this absolute ownership is that accounts and game assets can never be confiscated or blocked. This represents a decentralization of power from service providers and empowers consumers/gamers.

Dmarket and Chimaera offer this feature.

Fraud-Proof Payment Gateways

Virtually every blockchain game platform includes a token or coin as a currency, and facilitates a relatively easy payment gateway. Advantages to running a cryptocurrency payment gateway include low transaction fees and no third parties, which can charge extremely high fees, such as Apple's App Store and Google's Play Store, which charge around 30%.

With worldwide in-app purchase fraud at about 7.5:1 (fraud to legitimate purchases), fraud-proof payment systems benefit developers. They also help maintain stable game economies as fraudulently purchased items don't dilute the legitimately obtained supply. That is, fraud causes inflation in game economies.

GameCredits and Chimaera offer this feature.

Secure Asset Storage and Trading

One of the easy benefits of blockchain is secure asset storage. Information can be assigned and transferred quickly and securely. Everything from real estate and marriage vows to game accounts and magical swords can be stored, traded, and sold.

Fraud-proof trading frees the markets, and proper price discovery can ensue. In addition to other metrics, price discovery can serve as another performance indicator for game developers.

For gamers, these features can bring peace of mind. Instead of trading in dodgy forums or chat boxes, trades are perfectly transparent. For developers, that peace of mind for gamers makes their offering more attractive.

Both Chimaera and DMarket offer this set of features.

Blockchain Gaming - More Benefits

Putting games entirely on the blockchain is a non-trivial matter.

However, with a game running on the blockchain, it can be demonstrated that the game is provably fair, and that in-game assets, such as items, coins or resources, are similarly provably fair. Under these conditions, those assets can transcend from virtual value to real world value.

Pure blockchain games also benefit from not needing servers. With the game running entirely on the blockchain, servers are a relic of the past. This reduces costs for game developers, and provides guaranteed 24/7 uptime for gamers. Of course there are barriers as well, with one of the largest being scalability.

As an illustration of why scalability matters, CryptoKitties , a collectible trading game, saw such a high demand that it caused serious disruption for the entire Ethereum blockchain and spiked transaction fees worldwide.

Gaming projects like Chimaera are focusing on solving scalability issues using Game Channel technology, which allows for near real-time gameplay and reduces the size of the blockchain. For example the full Ethereum blockchain is now approaching 1TB after just 2 years.

The Chimaera team claims their platform enables a play-to-earn gaming experience (“Human Mining”), and backs up their claim with the Huntercoin experiment, the world’s first blockchain game that was launched in early 2014 and enabled players to earn in excess of $10,000 a day just by playing a basic game.

In the End, the Disruption is Economic

Blockchain in the cryptocurrency tradition of Bitcoin and Namecoin empowers the individual through decentralization. In video games, it delivers true ownership to gamers. Accounts that can't be hacked and game assets that can't be confiscated put gamers in firm control.

This control will percolate into mainstream games as gamers demand it more and more. Pure blockchain gaming with its play to earn model will attract gamers worldwide and put pressure on traditional game studios to adopt that model.

"Show me the money!" remains the investor's litany, and the heaven-made match of blockchain with video games is no different. In the end, mass adoption and it’s faithful partner called ‘profit’ determine which new technologies replace old ones. The main disruption caused by blockchain gaming is still a couple years ahead, but the signals for its inevitable arrival are clear.

More from Entrepreneur

Are paying too much for business insurance? Do you have critical gaps in your coverage? Trust Entrepreneur to help you find out.
Get Your Quote Now

One-on-one online sessions with our experts can help you start a business, grow your business, build your brand, fundraise and more.
Book Your Session

Whether you are launching or growing a business, we have all the business tools you need to take your business to the next level, in one place.
Enroll Now

Latest on Entrepreneur

My Queue

There are no Videos in your queue.

Click on the Add to next to any video to save to your queue.

There are no Articles in your queue.

Click on the Add to next to any article to save to your queue.

There are no Podcasts in your queue.

Click on the Add to next to any podcast episode to save to your queue.

You're not following any authors.

Click the Follow button on any author page to keep up with the latest content from your favorite authors.

One of the Biggest Issues Facing Blockchain Is Its Lack of Ability to Scale