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What are Crypto Games?

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Published/Updated in: December 10, 2021
Written by XFLOKIVERSE Crew

Crypto games are playable programs containing items that can be acquired and sold for cryptocurrency, in exchange for other tokens, or real money via a registered crypto exchange - or can just be held. 

The crypto industry has become increasingly popular over the past few years and is being accepted by more companies by the week. New blockchains are being created by innovators of the original Ethereum and Binance chains, with the aim of providing what the main chains lack or solving what they suffer from. Game developers have jumped onboard the crypto train and are creating applications using blockchain technology, as well as endeavouring to become a metaverse platform

The blockchain interacts with a network of systems, essentially as a storage center for information. Data that has been loaded onto the blockchain cannot be removed or altered - an attribute that many tech enthusiasts have a keen interest in, including the team at XFLOKIVERSE. We like the idea of securing our system to a top level by having the information being shared across multiple networks, there will be no single controller for it.
The current gaming industry is centralized of course, whereas crypto gaming allows decentralization with developers who wish to build a game on a blockchain. This is because all traditional games assets are confined to each application, like coding infrastructure, in-game items, and progress for example. Games built on the blockchain can be partly owned by players through the token associated with the application, therefore proposing the ability to transfer rewards or holdings to other applications as well. 

How does it work?

A game can use blockchain technology to build the application or to simply create a cryptocurrency as the in-game currency, by using smart contract verification for all transactions that correspond to the game. For blockchain-built games, all interactions are stored and run through blocks on the chain. A block is essentially a verified transaction record for data transfers like a ledger page. 

Crypto gaming is decentralized, meaning that there is no primary control group for the system - instead its spread through to a network, community, or specific group of governance owners. Some ecosystems have multiple tokens, with one delegated to governance, usually with a low supply and increased price to attract the long-term investors who believe in the project. 

Players can own assets in-game that come in the form of an item, generally used for improving or customizing user experience - avatars, skins, and weapons for example. Traditionally, in-game items once bought cannot be sold as they are specific to that game, and to allow real-world exchanging of the items brings a cascade of legalities and potential problems. 

There are some platforms that contain a community market, most notably Steam - the Steam community market allows players of accepted games to sell and buy in-game items for cash. The catch with this is that the cash can only be transferred to users' Steam wallets, not into their bank accounts. So if you purchase an item and decide you don’t want it, you’ll have to spend the refund back on the steam store. 

With crypto games, users can use a digital crypto dashboard to sell their items for cryptocurrency, which can be traded on the open market for other tokens or cash, depending on the tradeable pair. It essentially allows digital assets to be swapped for real-world money, a process many gaming enthusiasts have had trouble doing in the past decades with micro-transactions becoming a standard in the industry, and confining items to only the games economy. Using the blockchain to store ownership transactions of the digital assets in the game is how users can own unique items and sell them to make money with crypto gaming.

Decentralizatized Gaming

For the current gamers, you may not know the difference between centralized and decentralized gaming but it’ll make sense once broken down. Gaming right now is centralized, meaning items, entities, and assets are confined to the game itself and cannot be accessed externally. Developers own everything corresponding to the game, and if you read the terms and conditions of applications, users essentially purchase the ability to use the application rather than own it outright. Now this isn’t necessarily for some scheme to earn more money, but is to prevent players from reselling, modding, and hacking, as the developers wouldn’t have the ability to ban players who do not follow the rules, if they owned the game. 

Nobody can recreate the game or create an alternative version of it, but what does that mean for crypto gaming, people have more freedom and can essentially break rules? No. The blockchain allows the games to be built with a foundational code, which cannot be altered and acts as the mainframe of the application. The developers are essentially there to maintain it, but if the problem were to occur that an update was disliked by the player-base, another version or older version of the game can be activated to create a reverse-effect. The contract also goes through the smart-contracts system ensuring the core-coding is intact and inaccessible by anyone. 

Crypto gaming slices the traditional system in half, and decentralizes the digital assets like in-game items, to give users the ability to own the items they purchased and sell them for cryptocurrency or cash to use in a different game. This adds tangible value to in-game items, which hasn’t been seen on a scalable level currently, and is also a reason why a lot of players refuse to spend additional money to get items. If you play any game right now, and you spend $200 on customizations or weapons, that value may be worth in-game but when you stop playing, every penny you put in is essentially worthless. 

Now, because this system has been unchanged for many years, it's become accepted but with blockchain technology, crypto, and NFTs, the ability to own digital in-game assets is definitely achievable if adopted by mainstream developers.

NFTs Built for Cryptocurrency

An NFT is a non-fungible token defined as being an asset of data stored on a ledger with the use of smart contracts on blockchains. They cannot be replicated, and are unique to the creator. Proof-of-ownership is a system the NFT goes through to ensure it is non-replicable and an authentication of ownership is applicable. The assets can be anything digital, most commonly artwork in the form of photos, drawings, videos, and other digitized art, but are becoming utilized in the crypto game market through avatars and items.  

NFTs have grown exponentially in popularity since its inception into the crypto space, but arguably for the wrong reasons. Most NFTs on the market are intangible, and provide no use besides an investment based on hype and speculation but there are many tangible opportunities that come with the token, and projects are beginning to utilize it, as well as game developers. Any cryptocurrency can technically create their own NFTs, tangible or not, and is available to be built on different blockchains like Binance, Ethereum, and Solana - with each possessing their own qualities that others may not have. 

There can’t be a multi-ownership of one NFT, there can be releases of more than 1,000 NFTs but each one won’t be exactly the same as the other, regardless of whether it's released together or not. This is the attraction to these digital assets, the fact that it can’t be copied because of the smart contract system the new blockchain technology has, there are many things plagiarized in the real-world and to find the true item is sometimes a lengthy process. In crypto gaming, each entity created in the form of an NFT possesses tangible value if used as a core item within the game, like a character or attribute that improves a user’s ability to complete something or do something that they previously weren’t eligible to do. 

Limited in-game items on crypto related applications are NFTs that are essentially a collector’s item for whoever purchases it. In today’s centralized games, items usually have an unlimited supply unless specified otherwise, but there is still no value to this as you can’t sell it, whether it's limited or not. NFTs, because they have to be created uniquely, can’t be copied and released every time a user wants one, so skins, avatars, and other items created in limited quantities could potentially be highly valuable assets in crypto gaming, and will provide another a form of investment that isn’t the traditional stocks, currencies, or metals.

You will be able to sell these NFTs just like any in-game item offered with crypto gaming, on a crypto NFT marketplace designed for the trading, buying, and selling of digital assets. Of course, the value of the NFT is dependent on how much the buyers are willing to pay for it, but if it claims utility within the application and is a limited release, it is expected to increase in value as the game progresses. 

Playing a Crypto Game

Crypto games run just the same as traditional games, but usually require the user to own the currency associated with the game or blockchain, like games on the Ethereum Network require users to buy the ETH cryptocurrency. There are many exchanges available for you to choose from, offering fiat to crypto swapping and vice versa. Some offer their native token as a reward in the game, to grow the ecosystem as a whole - through utilities with the token like being used as the in-game currency. Most games use their token as the in-game currency because it correlates directly with the ecosystem, and can be controlled to add any future purposes.  

Play-to-earn games are a big attraction in the crypto space right now due to the ability to sell in-game items. There are games like Battle of Guardians and Axie Infinity that will offer a rewarding system of some sort, whether its progression-based or quest-based is still unknown but its the new way for users to buy in-game customizations that have both game-value and real-value. Play a game and earn real assets while doing so? Although gaming is primarily for entertainment, it’d be an added bonus to receive money considering how much time players put into their progression on these applications. Imagine what a thousand hours worth of playtime could net you? Who knows, but playing these upcoming crypto games will test the theory for sure.

Does the Future of Game Development lie on the Blockchain?

Gaming is a massive industry alone, and has been soaring ever since the release of the internet. Multiplayer games have connected millions of people around the world onto platforms of interaction. Now that blockchain technology is becoming the new age for the tech industry, it has been proven to provide benefits to many other industries so why not implement it into games. Decentralization, tangible value, P2E, and smart contracts are among the reasons that crypto gaming could quickly become the future of gaming.

The XFLOKIVERSE gaming platform we are in rapid development of will see the implementation of blockchain technology put to good use. On our roadmap, we have detailed plans to successfully launch the game on the XRP Ledger, and once they release NFT support we will be able to offer our users the ability to obtain assetized in-game items, and sell or trade them, as described in the whitepaper.

The blockchain’s value to gaming resides in the micro-transactions that take place within the games, giving tangible value to digital assets obtainable by players, of which can be sold on the open market - ultimately for fiat cash. As crypto is going to inevitably become accepted in a lot of industries across the world in the decades to come, there is a high chance that decentralized blockchain gaming will be applied to every respective development in the future.

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