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Blockchain Gaming for Dummies

Here completely by accident? Wanna know wtf crypto games are?

Most people involved in the crypto gaming world will have gotten quizzical looks at a party before. In first instance, because of our eccentric demeanor (a t-shirt bearing some cute digital animal brandishing a rainbow sword, if you’re in a development team; or just frazzled hair and a crazed look of exasperation if you’re a Gameunculus news reporter, like yours truly). But in second instance, because we “work in crypto games”. After that quizzical look, there always comes the question: “I know a bit about bitcoin and stuff – but how the hell do you make a game out of that?”

Next time someone asks you what the hell blockchain games are, just forward them this article. You’re welcome.

0. What even are crypto games?

Crypto games, also called blockchain games or gaming dapps, are online games (mobile or PC) who’s code is partly or entirely run on a blockchain. A blockchain is nothing more than a decentralized, distributed, cryptographically secured digital ledger. Even more simple? It’s just a group of people who agree to all keep a copy of the same data file in their computers; whenever one of them adds new data to the file, everybody’s copy updates. But honestly, if you don’t know what a blockchain is, we recommend you take a few days to learn the concepts before you invest in crypto games, or even dare lay your eyes on our article. Bye Felicia.

Blockchain is a protocol, not a magic net of blue dots.

Blockchain is a protocol, not a magic net of blue dots.

1. Why put games on a blockchain?

"Mainstream gaming is perfectly fine. Blockchain people just wanna put everything on a blockchain for the hype and the money!", I said when I first met Gameunculus in that creepy alleyway one cold, rainy night. He slapped me right there and then. Of course mainstream gaming isn't perfectly fine, it has a ton of issues! And blockchain people are crazy greedy, but that's not the point! I got into his diamond studded lambo and we drove away to the headquarters.

Centralized, mainstream gaming has issues (stay tuned for next week's in depth discussion of the matter). One of them is that, over the past decade, gamers have spent valuable time and money grinding for digital items whose ownership they could not secure nor prove. This may seem a minor inconvenience to the more emotionally balanced human, but is a real concern for serious athletes of MMORPGS and MOBAS such as Warcraft and League of Legends, or for proud owners of super hard-to-get cards in games like Hearthstone and the FIFA Ultimate Team. In case of a server crash, rollback or reset, players lose these digital items, which have a real world value to all players invested in the game economy. Furthermore, it's always unclear who is the real owner of the items; the developers or the gamer? This question can be translated into another, more down-to-earth one: who has the right to sell the digital item? Why can't a gamer who's done with the game sell their high-level sword they worked so hard for, for cash? There's certainly many other gamers out there who would gladly pay for it ... the fact that this sword doesn’t exist IRL hardly matters.

Of course, FIFA cards did come to life after the developers cast some voodoo on the code…

Cryptocurrency hype and lambo-hungry rich kids aside, blockchain technology has, at least in theory, the potential to offer a solution. It has to do with tokenization and transparency.

2. Tokenization

Tokens are sometimes described as an on-chain representation of somebody’s right to sell an asset. The token itself is not physical; it’s just a piece of cryptographically secured code, which only you have access to (this entails that only you can sell it!).

Crypto games try to solve the problem of digital item ownership by tokenizing said items. Since (most) blockchains are public and transparent, tokenizing game items (i.e. representing their ownership on a blockchain) means anybody can check the blockchain and see that Billy owns two rare swords and one level 9 ruby shield in the game CryptoKnights (ficitonal game). Or that Jessica owns a unique digital level 4 banana with a black helmet who does motorbike stunts (sadly, also fictional).

Pre-sale for Xtreme Bananas starts January 2019

Pre-sale for Xtreme Bananas starts January 2019

Blockchains prove to anybody who participates in them who is the owner of each item. And since they’re hard (not impossible!) to hack, and they’re decentralized (to an extent) – bye-bye resets and official server crashes. There are no official servers!

3. Fungus?

Tokens on a blockchain may be fungible or non-fungible. Fungibility is explained by a finance doctor here. But in short, fungible tokens are all interchangeable, and have the same value. In gaming, they usually work as a native currency that is used within the game. The token may be called the XBN, for example, and you could pay with it when buying banana gear, or engaging in competitions against other fruits. If you win the battle, you might be rewarded with more XBN! Again, the benefit of having them on the blockchain is everybody can see how many XBN tokens you have earned and lost on the game Xtreme Bananas. A common industry standard used for fungible tokens is the Ethereum ERC-20 standard.

On the other hand, non-fungible tokens are unique. Each one represents an individual item with its own properties and value. In the game Xtreme Bananas, your level 4 banana with the black helmet would be a non-fungible token. The hottest non-fungible token standards are the ERC-721 and the ERC-1155. We recently covered standards in this article.



Read more about standardization here.

4. Transparent code

Not all crypto games are created equal. As we’ve explained before on Gameunculus, some games are more decentralized than others, and some – so-called off-chain games – are not really decentralized at all (just their items are). When we say decentralized, we’re talking about going a step beyond tokenizing items. With blockchain, the bits of code – or, “smart contracts” – that make up the gameplay itself, can actually run on the blockchain. In these cases, the inner working of the gameplay is transparent. This doesn’t mean developers can't purposefully code a faulty game or rig battles; it means that, if they did, you could see them doing it in real time. And promptly decide not to play anymore, and tell all your friends.

Transparency and trustlessness are not to be taken for granted, even with blockchain. Different kinds of games out there achieve them with varying degrees of success, and with different costs to the performance and enjoyability of the game. Crypto games are like butt plugs: it’s all about being informed and choosing which kind is best for you. We advise you read our article about this. Is the article about games or butt plugs? The answer may shock you.

5. Will crypto games work?

We don’t have a time machine, so we don´t know. This industry is still young and chaotic, so of course, most of the hundreds of games out there currently suck. But who’s to say the future won’t be better?

Earlier in 2018, some hoity toity crypto experts weighed in on the viability of blockchain apps. They actually had a few promising things to say about gaming! Here’s a quote, to make us seem like a serious news outlet:

“Apps that seek to build on blockchain need to explore novel social spaces that are uniquely enabled by blockchain. More specifically, there seems to be an opportunity (in leveraging) provably scarce items (…) Decentraland was the first example, and Cryptokitties more recently popularized the idea. Pokemon Go and Minecraft immediately come to mind as existing mainstream apps that should leverage blockchain in this capacity.”

Because of the success of mainstream gaming, we know humans do value digital objects; sometimes, as much as physical ones. And humans definitely value scarce objects: think of coveted pieces of art, precious stones, or rare lambos, if you’re a crypto person. Gaming has already proven that you can build apps that harness this value, and that engage communities around it.

Though the authors (which include Kyle Samani, Jesse Walden, Tony Sheng, and David Jefferys) say they’re not sure if it’s smart for generalized blockchain apps to compete with incumbents like Facebook, Reddit, and Twitter, games are a different niche. The provable scarcity and self-sovereign asset ownership natively provided by blockchains is tapping into a real need that some gamers have; and yes, there will be money in it – and diamond-studded lambos – if it works.

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