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Usecase of the Month: Blockchain Games

The advantages of a blockchain are decentralization, security against manipulation and failure, and direct transactions. All of these advantages can be used in the context of virtual games - and in some cases already are.

Blockchain technology makes it possible to store and transmit digital content in a tamper-proof way using a decentralized database. This potential is increasingly being recognized by the gaming industry and use cases are being created where blockchain technology could play a crucial role in current games.

Virtual currencies and items take on real value and can be traded beyond the dedicated game interface - even when a game's servers are no longer online or the developer has discontinued support for the game in question. In this Usecase of the Month, we present two of these games and give a preview of what else we might expect in the coming years.

Blockchain Games up to date

Currently, there are two major types of games that use blockchain technology: The first type are the so-called "collectible games", i.e. games that focus on buying and selling digital goods using the blockchain. Emblematic of this, we would like to introduce CryptoKitties.

CryptoKitties is a very abstract online game released in 2017 by the Canadian developer Axiom Zen. Digital cats, which are basically just the visualized form of a digital token, are collected and traded via a platform. The gameplay is kept minimal and is limited to creating new cats and trading cats. Since every action is recorded in the Ethereum blockchain, every action costs real money. The cats have different characteristics such as eye colors or a special coat, wear hats and disguises. Particularly rare specimens have already changed hands for the equivalent of several thousand euros.

Verspielte, bunte Katze aus CryptoKitties
These cats and more can be digitally bred. Image: CryptoKitties.com

The other form of blockchain games are the so-called "gambling games", which are digital games of chance and encourage the user to spend cryptocurrencies in order to be able to win back a much larger sum of them.

Fomo3D was one of those games. Like KryptoKitties, it was based on the Ethereum blockchain (ETH) and also used the technology of smart contracts to provide a "gaming experience" and could also be understood as an experiment, which uses the mechanics of a snowball system. The game principle explains: While a timer runs down, all players have the opportunity to buy into the game via so-called "keys". The trick: these keys become more expensive over time and with each generated key. If the timer expires or no new key is bought for a certain amount of time, the player who bought the last key gets most of the saved ETH. In 2018, the pot to be won there was at times over $9 million, converted to Ethereum in size, and at times had thousands of users and a trading volume of 3,000 ETH daily. The game was discontinued in 2019, but has found dozens of more or less successful imitators.

Oft für Blockchain Games verwendete Kryptowährung: Ethereum
Ethereum, a cryptocurrency commonly used in the gaming context.

Outlook

At the end of 2020, Activision Blizzard, one of the world's largest game manufacturers, filed a patent for the use of blockchain technology. Results and in-game currencies are thus to be secured via the blockchain and, above all, protected against digital theft. Virtual goods are also to be made unique and tradable. However, it will probably be some time before this is actually used in games such as Call of Duty. One thing is certain, however: user-centric game developers can use blockchain technology to secure their own digital content against fraud and promote a secondary market based on cryptocurrencies, which can improve the game's appeal. At the same time, people get touch points with the economics of cryptocurrencies who have not dealt with it before. So everyone can benefit from this development.

Blockchain technology is unlikely to revolutionize the gaming industry. However, it does provide exciting new concepts and shows once again that there are many useful ways to apply this technology.

Would you like to learn more about blockchain technology or exchange ideas on the topic? Feel free to write us!

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