What Are Blockchain Based Games?
Blockchain and gaming have been inexplicably linked since blockchain was invented. Seriously: the original Bitcoin 0.1.0 source code, published by Satoshi Nakamoto, contained rudimentary code for a blockchain-based poker client. Many believe that Satoshi himself was a poker player, and perhaps even a skilled one at that, but the world will likely never know unless he comes out of hiding and finishes his on-chain Bitcoin poker game that has since been abandoned by subsequent Bitcoin developers. Nonetheless, and despite it never being finished, blockchains are uniquely good at doing one thing: establishing trust between two parties with an ultimate and immutable source of truth — the blockchain. This potent ability to create trust between two strangers happens to be perfect for playing games where money is involved, and gave rise to a number of “provably fair” Bitcoin gambling sites in the early days of Bitcoin. Despite some bad examples and flat out scams, these Bitcoin dice sites can be considered one of the first instances in the wild of a blockchain based game, as the hash from a Bitcoin block was used to determine the randomness of a dice roll.
Nowadays, blockchain based games have come quite a far way, and often involve fully fledged smart contracts and frontend interfaces. In this article, we will dive into the exciting world of blockchain based gaming, and what exactly that means.
The most intentionally broad definition of a blockchain based game is a game which is hosted on, and/or derives the logic that drives the game, from a blockchain. Bitcoin may have been the first cryptocurrency to implement blockchain gaming, but blockchains with smart contract capabilities have taken over the limelight in recent years with their increased ability to process data and provide unique interactive experiences that you can’t find anywhere else.
But before we move on, it is important to note that these rudimentary Bitcoin-based games establish an important truth: there doesn’t actually have to be any gameplay in a blockchain-based game in the traditional sense of gameplay.
Another such early example of this was Fomo3D, a smart contract-based gambling game created in 2018 and hosted on the Ethereum network that involves users purchasing “keys” to enter into a pot of pooled funds from other users who played the game during that round; the last user to buy a key wins the entire pot. There was absolutely no gameplay, but the simple ability to use a smart contract that can be trusted by users combined with the human greed of those users to win the entire pot was enough to keep the game running. That is to say that the use of game theory and economic incentives are also fundamentally at the core of blockchain gaming.
While Fomo3D is a great example of a blockchain based game without any gameplay, another project was released at around the same time with a completely different concept: CryptoKitties. Crypto enthusiasts may remember that CryptoKitties brought the entire Ethereum network to its knees as users rushed to play the game and gas prices rose dramatically. The purpose of CryptoKitties is simple: users can purchase, collect, breed, and of course sell virtual, NFT-based cats. CryptoKitties highlights another important aspect of blockchain games: they are decentralized and ownership-based, with NFTs often used as the medium to represent user ownership of assets. Once you own a CryptoKitty you own it forever, and its traits can be passed on to its offspring via the breeding mechanism. This incentivizes user behavior to collect CryptoKitties with rare traits, as they will often fetch a premium price on NFT markets.
So far we have learned that blockchain based games are decentralized, ownership-based, and utilize game theory to incentivize user behavior. Great! But what does the future look like for blockchain gaming?
To start, blockchain gaming is getting more advanced every day. Users want to engage with AAA-rated games, not rudimentary browser-based games that remind us all of the 1990s. We are currently seeing the Unreal Engine being used to create immersive 3D environments within a game, but we believe that game engines will continue to be pushed to a full-fledged desktop gaming experience. Importantly, there will also be more user choice as competition continues to heat up for those valuable active users, so we should expect to see blockchain based games coming to fruition in every segment of the gaming industry. First slowly, then all at once.
Additionally, as mainnet cryptocurrencies continue to experience scalability concerns as they are adopted more, we believe that the transaction layer that underlies blockchain based games will move more towards layer 2 and sidechain networks that are more apt to be able to process the numerous transactions that a blockchain-based game may need to use. GamiFi aims to position itself at the center of this burgeoning industry by providing a launchpad for Metaverse, Play-to-earn, and blockchain-based gaming applications designed to support launches and build strong communities of players.