What is Crypto Gaming? Blockchain Games Explained

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Last updated Apr 04, 2024 | 01:39 PM UTC

For decades, video games have been one of the most popular digital mediums on Earth, with billions of people playing them every day.

Crypto gaming hopes to upgrade this experience bringing earning potential and ownership to the gaming community.

What is crypto gaming?

Crypto gaming intersects blockchain, digital assets, and the video gaming industry. It involves the integration of digital assets and decentralized tech to create new and innovative gaming experiences. 

How does crypto gaming work?

Crypto gaming combines multiple Web3 technologies to revolutionize the gaming experience.

With blockchain as a fundamental piece of infrastructure, games can incentivize players with play-to-earn (P2E) mechanics often referred to as GameFi, as well as unique in-game ecosystems where in-game assets such as characters, items, and other virtual goods are represented as non-fungible tokens (NFTs) and other forms of crypto. 

Players are granted total ownership of their unique in-game assets, fostering ownership and value in an industry often criticized for monetizing loot crates and virtual assets that have zero worth both in and outside of the game.

A user can purchase any number of gaming cryptos, access their desired platform, and begin playing, creating, trading, and monetizing their gaming experience, all secured with a distributed ledger and smart contracts.

Can you make money from crypto games?

This model is proving transformative for single-player and multiplayer games, especially within online role-playing games (RPGs) where people play for hundreds of hours, building their character, crafting equipment, trading items, and so forth.

For example, Web3 games that The Sandbox (SAND) is a Minecraft/Roblox style game where users can purchase in-game assets, build with them, and monetize those experiences. In The Sandbox, a player can stake their crypto gaming altcoins on the game they’ve built and offer those rewards for other players willing to pay and test their skill. 

Other games such as Axie Infinity (AXS) allow players to collect and trade miniature monsters that are NFTs. Players can take them on single-player adventures, battle with them in multiplayer tournaments, breed and create new ones, attach varying accessories too, and much more, all while being rewarded for their efforts. Players can also purchase plots of land in-game, granting additional monetization opportunities.

Source: Axie Infinity
As these games increase their earning potential through new features, updates, upgrades, and integrations, so do their active player bases. During a market uptick when a majority of cryptocurrencies are gaining in price, players are often extra incentivized to play as they can now earn even more.

The integration of decentralized finance (DeFi) protocols into crypto games has proven popular as it adds earning possibilities to their idle assets, giving an additional stream of income if the player desires it.

In most cases, you won’t be able to earn enough to make a full time living from just one game, but it is still a fun way to earn some extra income just for having fun playing video games.

Can you play games with altcoins?

Yes. Most crypto games have their own altcoin that is used to play their game. 

In-game currencies are an essential means to interact with the game. These tokens are often offered as part of the P2E reward system, accessing premium features, and other interactions such as upgrading equipment. They also provide the in-game ecosystem with liquidity, meaning players can readily and easily trade their in-game assets.

Tokenized assets such as NFTs can represent unique in-game items, land, resources, etc., that players can utilize in one way or another. 

When considering which crypto game to play, it is important to understand the ins and outs of the game, how it rewards and incentivizes players for their investment and engagement, how many players there are, and the liquidity of the in-game market and its altcoin.

How big is crypto gaming?

At present, the blockchain market size is estimated to be valued at over $3billion, with bullish projections estimating it to reach between $56 to $90bn by the end of the decade.

In 2023, the global gaming industry was the most valuable media market in the world commanding an estimated value of $187bn, eclipsing the likes of the music and film industries. Furthermore, the total number of players worldwide is projected to reach well over 3.3 billion by the end of 2024, making it one of the largest consumer demographics in the world.

If trends continue, blockchain gaming could encompass up to 20% of the global gaming market, and this could be likely given that major publishers and developers are experimenting with the technology, and are looking to implement crypto gaming models to varying extents within their titles. 

Is crypto gaming the future?

Though we may never see cryptocurrencies in major Triple-A video games with millions of players such as Fortnite, World of Warcraft, and League of Legends, fully embrace blockchain as the underlying infrastructure of their gaming ecosystems, crypto gaming is most certainly a part of the future. 

Industry titans such as Sega, Ubisoft, Square Enix, Electronic Arts, Bandai Namco, and others are experimenting with the technology at every level, seeking ways to enhance the mainstream gaming audience with the subtle implementation of Web3 technologies.

Gamers may find that being able to indefinitely own, trade, and leverage their in-game assets in a multitude of ways very appealing, but may not want them to be coupled with highly volatile and speculative crypto assets, faulty and vulnerable experimental technology, etc.

That said, games that fully implement crypto may prove highly popular and even sources of stable income for certain demographics and or regions of the world. 

How do I start crypto gaming?

In order to get started, follow these steps to begin your crypto gaming journey:

  • Have a basic understanding of blockchain and crypto, as well as how they are integrated with gaming. Also, research popular cryptocurrencies and the most popular crypto games available today.
  • Choose a game. After exploring different types of games on the market, pick the one you’ll have the most fun with, and try not to place too much expectations on how much you’ll earn. Consider factors such as a number of active players, P2E mechanics, and community engagement. 
  • Set up your crypto wallet. If you don’t have one already, create a secure crypto wallet where you’ll be storing your assets and funds. Choose a reputable provider such as MetaMask or Coinbase Wallet as they allow you to hold more types of crypto and access many games; some Web3 games such as Axie Infinity require you to use their own specific wallet applications.
  • Purchase crypto. Whether directly through your wallet or an exchange, purchase the necessary tokens and in-game assets required to participate in the game. 
  • Learn, Play, Earn. Once you’ve completed the above steps, you’re ready to go. Learn how to play the game, have fun with it, and explore the many possibilities available to you in crypto gaming. 

Bonus: We also highly recommend that you engage with the community of your chosen game. The best games will often have highly active Discord channels, Twitter feeds, Reddit communities, and so on. Players are often more than happy to help you learn your way around the game and have the best time possible. 

Doing so will also keep you informed and therefore, adaptable. As we’ll get into in the following section, there are some risks with blockchain gaming, and regularly checking in on the player base and the activity of the developer is an essential practice if you want to avoid any unexpected losses.

Does blockchain gaming have risks?

Just like any emerging technology, decentralized networks come with their own risks and challenges, especially when it comes to security breaches, hacks, smart contract vulnerabilities, market volatility, and so on.

When it comes to the security of the technology itself, improperly configured codes and smart contracts can result in the loss of in-game assets and funds. Furthermore, the player’s ability to manage and govern their private keys, passwords, and other sensitive data can also lead to undesirable outcomes.

Cryptocurrency gaming altcoins are often no different from any other crypto in that their price can fluctuate in value. High volatility is undesirable as it can have an effect on the player's experience. If a gaming crypto falls significantly enough the players will lose interest, look for ways to get their funds out of the game as soon as possible, and may even lose all of their time and financial investment.

Ultimately, just as is the case with any other crypto-related product, the user must take the time to understand the risks associated with cryptocurrencies and the underlying technologies, as well as find a reliable game they want to invest their time and money into.

Frequently Asked Questions

What is crypto gaming?

Crypto gaming combines video games with blockchain, NFTs, cryptocurrencies, and more to enhance player’s experiences, grant ownership over in-game assets, and introduce novel means to earn and monetize time spent gaming.

How to invest in crypto gaming

In order to get started, first you’ll need to find a crypto game you want to play, set up a crypto wallet to interact with it and purchase the altcoins associated with that game. You can usually do this directly through the platform or many major centralized exchanges.

 

Written by

Eddie is a seasoned crypto writer and Bitcoin maximalist.