Crypto in Online Gaming Platform
Let's begin this article with understanding the term Cryptocurrency. In simple terms Cryptocurrency can be understood as "money in digital form". Technically, it has been well defined by Merriam-Webster Dictionary as — "any form of currency that only exists digitally, that usually has no central or issuing authority but instead uses a decentralized system to record transactions and manage the issuance of new units, and that relies on cryptography to prevent counterfeiting and fraudulent transactions."
The invention of Cryptocurrency can be traced back to the years between mid 2008 and yearly 2009 by an unknown person (or may be a group) under the name (or pseudo-name) Satoshi Nakamoto. It uses Blockchain technology. The term 'Blockchain' formed of two words 'Block' and 'chain' – represents blocks of data connected through a chain system whereby the data are decentralized and the transactions are recorded in a digital ledger. By this it becomes a highly secured and unalterable system.
Cryptocurrency in Online Gaming: How it all began?
Prior to advancement of technology, online gaming was just meant for fun and not taken seriously as a part of a "wealth accumulating industry". There was no such recognized profession such as "Professional Gamers". It was beyond imagination to think of it as a career. But with the passage of time, the world witnessed immense technological growth starting from hi-tech gadgets, smartphones, 4G, 5G network and high bandwidth connectivity, cloud spacing, etc. easing the way towards the development of a virtual glamorous industry of Internet or Online Gaming. The Online Gaming Industry is not insignificant like before but it's a massive industry and definitely a wealth accumulating industry. Having said about the technological advancements which paved the way towards the blooming of the Online Gaming Industry, it is further required to add another major reason behind the growth of the industry which is the pandemic period and subsequent lockdown worldwide. Global Pandemic gave a boost to the Gaming platform. The figure below indicates the same
Figure 1. showing surge in video game revenue owing to COVID-19
The strengthening of the online gaming industry led to commercial growth of real money in the gaming space. Gaming is now a source of decent income. Play-to-earn has become a trendy phrase of the virtual gaming world. Gaming is not a simple time pass anymore but a real business if someone really wants to make a career in this platform. Big platforms like YouTube saw an increasing number of Gaming Channels and high subscriptions of them on the said platform. The following picture shows the "subscriber graph" (in millions) of the "Top YouTube Gaming Influencers for the year 2020"
Figure 2. Bar graph representing subscribers of Top YouTube Gaming Influencers in 2020
Monetary transactions entered the gaming space in the form of
in-app purchases, which allows players to buy virtual assets related to online gaming such as avatars, lives, coins, etc.;
affiliate marketing which is posting of affiliate links in gaming videos and displaying of unique affiliate promo codes in live streaming of gamers; and
rewarded-ads., which allows users to get rewarded in exchange for watching an ad through a minimum period of time. Thus, generating a good deal of money for the developers, and high engagement or retention time of viewers boosting advertising, and
various other ways.
More the money involved in online gaming, more the risk of possible security threats and frauds. Owing to which Cryptocurrency turned out to be a big market player for this platform. Below are the prime advantages which allows it to have an upper hand from the other normal financial transactions–
High security- Cryptocurrency is based on "Blockchain Technology". The blockchain technology decentralizes data and records transactions in digital ledger in such a way that it is almost impossible to make any changes to it and thus, making it highly secured.
Direct- Cryptocurrency ensures direct dealing by eliminating the role of financial institutions like banks, making the process hassle free.
Safety- Personal data is safe owing to safety of data records through cryptography.
Development in Technological infrastructure and the push to move towards Gaming platforms post COVID-19 has led to the evolution of high-end virtual spaces like Metaverse and Web 3.O. Another revolutionary creation of the era is that of Cryptocurrency. Cryptocurrency began to be seen as a great solution for the existing problems related to financial transactions in online gaming platforms.
Concept of Crypto Gaming
Concept of Crypto gaming can be understood by either of the two:
The game is built upon crypto or blockchain technology;
It uses crypto or blockchain technology for in-game purchases.
In case 1 the games are developed by blockchain technology whereby there is decentralization of information. Such information is available to all the computers connected on the same network.
In case 2 the game is not developed on blockchain technology but only the transactions related to in-game purchases are based on cryptocurrency like Bitcoin, Ethereum or Non-Fungible Tokens (NFTs).
Concluding with the impression that at a time of high security threats owing to leakage of personal data and hacking of centralized data on servers, the blockchain or crypto system is definitely a great boon for future years and with the added advantages and possible disadvantages there is a need to do in-depth analysis on the use of this technology for gaming platforms in coming years.
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