Blockchain in Gaming – Potential, Limitations, and Real-World Examples

Posted by James Smith on November 28th, 2022

Blockchain technology is the next big thing in the gaming industry. Blockchain-based games have been all around the corners for a few years. However, the industry has seen a surge in the number of games in recent times. This technology has opened new opportunities for businesses that want to create decentralized gaming apps.

As per the latest Technavio report, the global gaming market is expected to grow by 5.65 billion, increasing at a CAGR of 12.40% from 2020 to 2025. The integration of Blockchain technology in gaming apps is the significant factor driving the market growth.

The graph given above clearly explains the growth in the gaming market. However, to further know more about Blockchain in the gaming industry, let’s move forward to our blog that addresses some of the aspects related to exploring the potential of Blockchain

in gaming and its limitations. Some real-world examples and the future of Blockchain in the gaming industry, which is slowly gaining popularity among business owners and entrepreneurs. Let’s delve deeper to understand more.

But before moving forward to introduce blockchain technology in gaming, let’s understand what is blockchain and how it is used in the gaming industry.

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What is Blockchain and how is it used in gaming?

Blockchain is a decentralized and distributed digital ledger that enables secure transactions and maintains records. It has created a new gaming experience for both businesses and players who use NFTs and cryptocurrencies to purchase in-game assets that could be exchanged for real-life money. For instance, Axie Infinity has millions of players globally that use Ethereum-based cryptocurrencies. 

Role of cryptocurrency in gaming

With its popularity in the gaming industry, cryptocurrency has also evolved. Cryptocurrency is a digital currency that uses cryptography to secure, verify and facilitate transactions. It allows users to make payments online without going through traditional payment systems like banks and credit card companies.

Cryptocurrency, such as Bitcoin and Ethereum, enables secure and fast payments for various in-game purchases, like avatars, power-ups, themes, unique artifacts, etc. It also allows players to earn rewards or Crypto tokens while playing games.

With a significant boom in the gaming industry, you can’t deny the changing cryptocurrency trends that took away the entire gaming market. Moreover, with the rise in crypto games/blockchain games, there are various ways in which blockchain technology is being used in the gaming industry that include:

NFT’s

NFTs are non-fungible tokens that can be traded or used within blockchain games to purchase characters, memes, videos, and other digital assets. NFTs create a way for gamers to own their digital possessions truly. This gives players more control over what happens to these items and makes them easier to trade and sell since there’s no need for an intermediary like another player.

Play & earn

Blockchain has given rise to a new sub-genre called “Crypto-Games.” Crypto games are different from traditional games because they allow players to earn cryptocurrency (or digital currency) by playing the game. Cryptocurrency from these games can be converted into real money or used to buy new items within the game. So how does this work?

When you play a crypto game, a cryptocurrency is rewarded to you that can be used outside the game in “the real world.” The idea is to encourage gamers to continue playing by giving them an incentive in cryptocurrency so that they can redeem it for real-world goods and services.

Virtual events and tournaments

Virtual events and tournaments are a critical component of the overall gaming industry. For decades, virtual events have been organized globally, which requires many resources for managing teams, prize pools, and event venues. However, many challenges have been faced in this process, such as the high registration cost, ticket prices, bandwidth, cybersecurity, etc. Also, it isn’t easy to verify the rewards participants earn.

Blockchain technology can make this process easier by providing the ability to track and verify who has received the rewards for their matches or competition wins. Blockchain technology is decentralized and offers secure transactions among users, and it automatically tracks data from any network where it is implemented. Therefore, it is easy for gamers to participate in virtual events and tournaments using blockchain technology.

According to a Newzoo report, In-game transactions will generate 9.6% revenue growth on a mobile platform by 2023.

While the above discussed are a few ways that allow users to earn digital assets cautiously, there’s no doubt to it that the gaming industry is transforming using blockchain technology. How? Let’s find out.

How is the gaming industry transforming using Blockchain technology?

It’s evident that Blockchain technology has been around for a while, but it recently received more attention for its potential to transform various industries. In recent years, due to its benefits in the different sectors, it’s seen as the first choice for the gaming industry. 

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