This article is a collection of features that blockchain enables in games that goes towards achieving my main hypothesis: Gamers deserve to be compensated financially for the time and money that they spend playing games.
There are a number of reasons why I believe this should be the case:
- Gamers create a lot of value for game developers that is disproportionate to the value they receive from playing games (yes, they get to ‘have fun’, but for the value they generate for game developers, they should be getting more).
- Gamers are already trying to find ways to monetize their game-playing efforts, such as by selling assets, avatars or entire accounts after leveling them up and making them valuable.
- Gaming, in terms of time-value, is often limited to people who can afford not to spend that time producing value or making a living in the real world (usually younger people).
As such, the features that blockchain enables in games that I will outline below are simply the means towards achieving this goal.
1. Blockchain enables a game item’s entire history to be recorded transparently and permanently.
⚙ How does this work?
When developers create tokenized assets on the blockchain, they can choose the specific characteristics or information about that item (‘metadata’) that they want recorded in the item’s code. Because this code exists on the blockchain, it is available for anybody to view and verify.
? Does it need a blockchain?
Technically, a game can simply record the history of an item (ownership, game levels completed, kills, accomplishments, etc.) and showcase that to the user or to others who might want to view that information. In fact, if a game did this, this information would be collected and stored much more quickly in the game’s centralized database than if it was to be stored on a blockchain.
? Why does it benefit gamers?
This feature, combined with true ownership, means that gamers are incentivized to ‘level up’ their item in order for it to increase in value. Playing the game becomes a sound financial choice for the gamer because the more they play, the more valuable their asset becomes.
Not only can the gamer sell this item to a willing buyer, he could potentially also use it in the same way as he can use ‘real-life assets’, such as for the collateral of a loan.
What cool things can you record for game items?
One set of information that is naturally recorded on the blockchain is an item’s ownership history (or transaction history). You can see how many times an item has been bought and sold, and the number of owners it’s had in its lifetime.
Other information that can be stored in a game item’s metadata include: Number of kills made with a weapon, number of levels a character has successfully completed in a game, amount of successful battle victories, or past prices paid for the item.
As you can see, this information can make two identical game assets, well, not very identical… Because a sword that has, say, more game accomplishments than another, or was previously owned by a famous pro-gamer and used in an iconic match, will be valued more highly on the open market, especially as a collector’s item.
Game developers can also enable items that have achieved certain levels of achievements to unlock further benefits, ie. a sword that has killed 20 minotaurs now has the ability to kill a dragon in one swoop. In this case, an item will increase in value due to its enhanced utility in the game.
2. Blockchain enables the amount of game items available on the market to be unchanged and verified.
⚙ How does it work?
Developers can encode into an item’s smart contract the limit on the number of those items that exist. The code is open source so anyone who can read it can verify this number.
Developers can also set a limited time at which they can create new items, after which they provably remove from themselves the ability to create new items.
? Does it need blockchain?
Yes. When code is deployed on the blockchain, it cannot be changed. Not only that, it exists forever. The developers who put it up cannot take it down. However, code that exists on a central server or database can be edited by its owners. Even if the owners promise that they won’t make changes, the fact that they have the ability to means that a decentralized solution will always be in the gamers’ better interest.
? Why does it benefit gamers?
This means that players never have to worry about an item’s supply increasing and the items that they hold decreasing in value as a result. Conversely, because others know that an item is in limited supply, being the owner of such an item may result in an increase in the value of your asset later on, especially if the item becomes desirable as a collector’s item.
3. Blockchain enables gamers to truly own their game items
⚙ How does it work?
Game items exist as blockchain tokens, which means that the record of their ownership is held in a decentralized ledger that is cryptographically verified by nodes all over the world. When an item is transferred to you, either in the course of gameplay (ie. if you earn a loot box), or you purchase that item from the game’s store or from another gamer, it is sent to your wallet, which is an address that only you can access (unless, of course, you give access to someone else).
? Does it need blockchain to work?
Yes, because all existing ownership methods require that a centralized entity holds your assets/information and you can simply access that using a password (which you get when you create an account with that entity). Because this information or asset is held by a centralized database, there are number of vulnerabilities:
- Having access keys stored on a centralized server means that instead of authenticating yourself, you trust an authentication service to do so. This process is vulnerable to a greater number of threats.
- The fact that it exists on a central database means that there is only point of failure for hackers to target.
- The centralized entity can shut down, at which point it will likely close down the servers required to maintain the records of your ownership.
- The centralized entity can decide to negate your ownership of that item for any reason.
? How does this benefit gamers?
In addition to the features outlined above (record of history and provable scarcity) this is the clincher that makes games profitable for gamers. The above outlined features that make game items more valuable, but true ownership is what really enables gamers to fully profit from these items.
When gamers spend time in a game, they are doing a number of things that benefit the game developers:
- Providing opponents and teammates for other gamers (who wants to play a game that has no other gamers?)
- Providing the ‘work’ that goes into making a game’s assets valuable, ie. leveling up and re-selling those items to gamers who do not have the time to level up their own characters.
- If they are trading game assets in an open market, they are providing free publicity for the game as people come to know it through valuable assets or collector’s items for sale.
- Creating secondary communities for a game of people who are interested in a game not for its gameplay aspects, but as a source of investment and asset appreciation.
- Targeting new players of the game by creating assets that have greater utility value within a game (ie. a sword that has been ‘leveled up’ in order to more effectively defeat opponents) that is purchased by people who want to participate in the game, but do not have the time to grind for hours.
However, currently, gamers don’t profit from these contributions. They are expected to be satisfied with the ‘fun’ that they derive playing the game. This is why many people, as they grow up and their responsibilities to support themselves and their families increase, spend less and less time playing games. However, if game developers want their business to be sustainable and to continue growing and taking advantage of all demographics in the market, then it would be handy for them to consider these benefits.
Hoard Exchange Article Part 2
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