When Bitcoin was first released as the world’s first cryptocurrency in 2009, just a tiny percentage of the population believed in it. Now, more than a decade later, Bitcoin and several other cryptocurrencies have taken the global financial industry by storm.
Since the Bitcoin space exploded in 2021, many analysts and professionals have been predicting that cryptocurrency is the way of the future for payments. After all, the number of businesses that have taken to Bitcoin has grown, and many of the world’s most respected worldwide firms now accept cryptocurrency payments.
One industry in particular has been a strong advocate of cryptocurrency in recent years: online casinos. Since these gaming sites are all online, cryptocurrencies are ideally suited for making payments on these platforms.
The main reason why players like cryptocurrencies are because they allow them to make secure online payments. Cryptocurrencies are based on blockchain technology, which is a decentralized network. Thanks to cryptography, all crypto users acquire a certain level of online anonymity, which raises their overall security. In addition, there is a significant distinction between crypto and traditional payment methods like credit and debit cards.
When people buy a game with a debit/credit card or withdraw money from an online casino, the money is taken out of their account right away, but banks need a few days to process it, which means the other party will have to wait for the money, making the process inefficient.
Cryptocurrency transactions, on the other hand, are instantaneous and secure. As a result, many experts consider cryptocurrency to be the most effective form of online payment.
Gaming is a vast industry. The gaming business is expected to be valued at over $160 billion by end of 2021. In comparison, the music industry was valued slightly under $62 billion at the end of 2020, and the global cinema industry was predicted to be worth $136 billion in 2018.
People adore gaming, and they play games every day in the millions. Xbox Live, for example, had over 100 million monthly active users by the end of 2020.
These astonishing stats only serve to emphasize the growing popularity of games as a form of mainstream entertainment. We are surrounded by technology, from the ubiquitous mobile phone to tablets, laptops, gaming consoles, and even our televisions. It therefore makes sense that we can now play games on almost any platform. In other words, gaming is a popular form of entertainment because it is immediate, accessible, and reasonably priced.
However, despite the immediate and indisputable reality that gaming will only grow in value in the next few years, the gaming business is structured so that gaming money benefits the retailer who sells the game, the publisher who monetized the IP, and the studio that created it. In other words, the revenue flow is only one-way. The gamer receives no monetary compensation for participating in a game that could have cost millions of dollars to develop.
However, during the last year or so, that unidirectional revenue flow has begun to shift. Gamers can now obtain a piece of the gaming money pie thanks to blockchain technology and non-fungible tokens (NFTs).
Let us take a look at how this is happening.
In the traditional gaming ecosystem, a studio makes a game, which is then distributed to merchants, who then sell it to consumers (gamers). Previously, this distribution took the form of a physical CD, with some games requiring multiple disks. Most games are now released digitally through services such as Xbox Live or Steam, making sales and distribution far more convenient than they were in the past. Every stakeholder, including the store, shipping company, publisher, and studio, receives a portion of the game’s income. What does the gamer receive? Someone might devote a significant amount of time and effort to the game, understanding its subtleties, maps, and gameplay. Shouldn’t this work be acknowledged as well?
The present game manufacturing and retail economic model generates profit for stakeholders but little value for the gamer – the introduction of NFTs has addressed this problem.
Video games, especially massively multiplayer online role-playing games (MMORPGs), have extensive in-game economies that frequently result in significant real-world earnings. EVE Online’s economic structure, for example, is worth $55 million in real money. In addition, some in-game assets can be sold for reasonable prices. However, all of these items are found in the game. In other words, you cannot use them outside of the game. They are valuable, to be sure, but their worth is restricted to what you can do with them in the game. The use of blockchain technology to tokenize gaming assets allows for a paradigm shift in how these assets are handled as well as how their value, scope, and significance changes.
The ability to tokenize in-game objects opens up a whole new universe of possibilities. People can buy an in-game item, such as a new ‘skin’ for one of their favorite characters. Right now, this new skin would only make the character look incredibly nice in the game. Imagine, however, that they obtain this skin as a tokenized asset or a non-fungible token (NFT). Suddenly, that skin can be used in other places (a different game environment or any other ecosystem that supports digital assets -digital art exhibitions, for instance.) Blockchain-based games and assets have enormous growth potential: they can multiply the game’s economy. This could lead to the creation of entirely new game genres, ultimately providing significant value to gamers.
Let us dive into the properties of gaming NFTs. For a variety of reasons, blockchain technology is disruptive. It offers a revolutionary new way to manage trust in network contexts, and it is decentralized, eliminating many of the problems that plague legacy systems. The application of blockchain technology in gaming NFTs marks the introduction of a totally new asset class of in-game items, with three distinguishing characteristics: ownership, scarcity, and interoperability.
In ‘conventional’ gaming environments, in-game goods are only helpful and used within the bounds of that same environment. For example, a skin purchased in Epic Games’ battle royale game Fortnite cannot be utilized outside of the game. ‘Ownership’ (of that skin) is merely an illusion in this concept. Although someone may have paid for it, it remains the property of the game developers because the gamer is unable to use it elsewhere.
Tokenized assets turn this concept on its head by allowing the player to legally own a piece of property. Gamers who buy that skin (or any other in-game object, for that matter) can keep it, sell it to other players, use it in another blockchain-based game, or transform it into digital art.
In the gaming industry, rarity generates value. (A Revenant Carrier, one of EVE Online’s most valuable ships, costs roughly $8,000 in real money, while a 1999 First Edition Shadowless Holographic Charizard Pokemon sells for nearly $370,000.) This uniqueness is what makes these items so valuable to collectors. However, in order for these objects to retain their worth, they must be genuine. This is where the blockchain comes into play. Thanks to the inherent immutability of blockchain data, gamers can verify that gaming NFTs are real before making a purchase. This allows gamers to spend their money with confidence by identifying the origin of a particular item. Thanks to the distributed ledger’s data traceability, subsequent collectors can do the same.
Until now, games have been played on centralized servers using siloed, proprietary systems that do not communicate with each other. (Cross-platform gaming, which allows Xbox Live gamers to compete against PC or Playstation Network players, is a relatively new concept that only works with a few games). In general, in modern games, centralization reigns supreme. Through the tokenization of in-game assets, blockchain technology upsets this paradigm. Items obtained in one game can be used in any other game on the same blockchain, or even in another blockchain, provided both technologies are connected.
GameFi AG has developed a earn-as-you-play model for blockchain games, rewarding gamers in the native currency – Pika Cyrpto – as they play games. With this concept, GameFi AG has developed a platform that connects NFTs and blockchain gaming to the rest of the world. GameFi AG is a complex organization of interconnected smart contracts utilizing the latest blockchain technology. This cryptocurrency gaming platform is revolutionizing the blockchain gaming space with exciting, play-to-earn games. The team aims to provide gamers with unique NFT games and create a niche space where artists can sell their art and gaming NFTs. They have developed a groundbreaking three-tiered token system that’s absolutely unique because it allows gamers to evolve one token into another while playing. In this system, each token – Pika, Thunder and Rai – has a unique application in the games.
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