Blockchain in Gaming

2-minutes Read

Blockchain in Gaming

In the traditional gaming industry, the majority of gaming data is fully controlled by the gaming companies, including account information and in-game assets collected by the players such as skin, collectibles and virtual money. As everything is owned by the gaming company, the players don’t really have the ownership of their accounts or in-game assets. Such centralized models may present vulnerabilities like server malfunction or hacking. The gaming economy is also controlled by the company and when a game is shut down, the players will lose everything with it.

The decentralized technology can eliminate these problems and there can be two models: decentralized or hybrid. In the fully-decentralized model, the game is completely run on a blockchain, so the game developers cannot alter the game without consensus from the community. In a hybrid model, the game itself still runs on a central server but the in-game assets are tradable via a decentralized marketplace. In either model, the in-game assets are stored and transferrable on the distributed network and owned by the players.

Tokenization and Ownership

Each in-game asset can be represented by a unique, non-fungible token (NFT) such as ERC-721 or ERC-1155. There are a few crypto wallets supporting these token standards such as Trust Wallet and Enjin, so players can store the in-game assets in their crypto wallets and have full control over the assets in the same way as holding cryptos like bitcoin. The immutable nature of blockchain will also help to prevent fraudulent items and create scarcity – some in-game assets can cost thousands of dollars based on scarcity.

Compared with other real-world use cases transforming with blockchain, the tokenization of in-game items is a smoother transition as gamers are already used to tokenization/virtual currency.

Decentralized Marketplace and Multi-Universe

While gaming companies can manipulate gaming mechanisms and make in-game items untradable, in the decentralized world, gaming mechanisms can only be altered if the distributed network reaches consensus, it thus rebuilds the relationship between game developers and players and encourages user-generated content; players are free to trade their in-game assets on a peer-to-peer basis via Smart Contracts, and they are even allowed to recycle their digital assets or trade across different games on the same blockchain network, creating a digital multi-universe.

Secure, Fair and Unlimited

A centralized server may become the target of attack as the hacker can possess all assets when the server is compromised, and a gaming company can choose to shut down a game anytime they want.  With the distributed nature of blockchain, no central game servers can be attacked or shut down, as long as the blockchain network still exists, the players can play the game even if the gaming company is closed.  In addition, it can also prevent cheaters from disrupting the games, as the records are all traceable and immutable.

Trends

At present, the games on blockchain are quite simple and the quality is still far from the traditional games with great gamer experience. And blockchain tends to be much slower than centralized networks, which also hinders the mass adoption. The hybrid approach is likely to be feasible in the near term, with key gaming titles still running on the centralized server and sale of in-game assets on the blockchain. There may be some commercial issues to be resolved though.

AI Link Group Limited, through its operating affiliates, AI Link Finance Limited (collectively “ALG” or “AI Link”) provides TradeFi, an integrated platform which allows holders of Ethereum-based stablecoins to earn interest income generated from trade finance assets.

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