Blockchain Gaming: Why You Should Be Paying Attention

Get ready to reimagine the way you play. Blockchain gaming is rapidly transforming the gaming landscape, offering a new level of ownership, value, and engagement for players. Whether you’re a seasoned gamer or a curious newcomer, blockchain gaming is a trend you can’t ignore. In this blog, we’ll delve into the world of blockchain gaming, exploring the innovative ways it’s changing the game. We’ll unpack the core concepts, highlight the benefits for players, and explore why blockchain gaming deserves a spot on your radar. So now, let’s get started!

Blockchain Gaming: Why You Should Be Paying Attention

What is Blockchain Technology and How Does It Work?

What is Blockchain Technology?

Blockchain technology is a decentralized digital ledger that records transactions across many computers in such a manner that the registered transactions cannot be altered retroactively. This technology provides a secure and transparent way to conduct transactions without the need for a central authority, such as a bank or government. The concept of blockchain is foundational to cryptocurrencies like Bitcoin, but its potential applications extend far beyond digital currencies.

How Does It Work?

Every action in the blockchain is considered a transaction. When a transaction occurs, it is transmitted to a network of peer-to-peer computers scattered across the world. These transactions are then grouped into what are known as blocks. Each block contains a certain number of transactions depending on the blockchain.

The network of computers, often referred to as nodes, validates the transactions and the user’s status using known algorithms. A verified transaction can involve cryptocurrency, contracts, records, or other information. Once a block is complete, it is linked to the previous block in the chain by a unique identifier called a hash. This hash is a digital fingerprint created from the data in the previous block, ensuring the integrity of the entire blockchain.

The verified block is then added to a chain in a linear, chronological order. Each block in the chain contains a hash of the previous block, which links the blocks together in a secure manner and prevents any block from being altered or a block being inserted between two existing blocks. Unlike traditional ledgers or databases that are controlled by a central authority, blockchain is decentralized and distributed across the network of computers. This means that any attempt to alter data in any one block would require altering all subsequent blocks in the chain, which is practically impossible due to the cryptographic security and the consensus mechanism.

Different Types of Blockchain

Blockchain technology has evolved significantly since its inception, leading to the development of various types of blockchain networks, each designed to suit specific needs and use cases. These types can be broadly classified into the following categories:

types of blockchain

Public Blockchains

  • Public blockchains are completely open and decentralized networks where anyone can participate without permission. These blockchains allow anyone to read, write, or participate in the consensus process (e.g., mining in a Proof of Work system).
  • They are considered highly secure due to their decentralization and the large number of nodes that validate transactions.
  • Examples include Bitcoin, Ethereum, and Litecoin.

Private Blockchains

  • Private blockchains are permissioned networks managed by a single organization or entity. Participation in these networks is restricted, and only authorized individuals or organizations can join.
  • They are faster and more efficient than public blockchains because they involve fewer participants in the consensus process.
  • Private blockchains are often used within an organization or among a consortium of businesses for supply chain management, internal record-keeping, and other enterprise functions.
  • Examples include Hyperledger Fabric and Corda.

Consortium Blockchains

  • Consortium blockchains are semi-decentralized and are governed by a group of organizations rather than a single entity. The consensus process is controlled by pre-selected nodes.
  • These blockchains combine some elements of both private and public blockchains. They are often used in banking, supply chain, and other sectors where multiple organizations need to securely and efficiently share information.
  • Examples include Quorum and Energy Web Foundation.

Hybrid Blockchains

  • Hybrid blockchains offer a mix of both private and public blockchain features. They allow businesses to set up a private, permission-based system along with a public, permissionless system that can interact with each other.
  • This type of blockchain provides the flexibility of private blockchains while still offering the security and transparency of public blockchains.
  • Hybrid blockchains are suitable for businesses that require high security and privacy for internal data but also need to share certain information with the public or specific entities.
  • An example is Dragonchain.

> Related: Top 10 Leading Blockchain Developer in Singapore For 2024

What is Blockchain Gaming?

Blockchain gaming, simply put, involves video games that are operated with or partially built using blockchain technology. Depending on how they utilize blockchain technology, they are sometimes referred to as crypto gaming, NFT gaming, web3 gaming, or metaverse gaming. The technology underpinning blockchain gaming means it can differ from traditional video gaming in several key ways:

  • Decentralization: Blockchain gaming can be developed and maintained by many independent members of a decentralized autonomous organization (DAO); rather than by a corporation or single entity, making it more difficult to compromise or discontinue. Of course, traditional video game developers could still offer blockchain gaming experiences with similar benefits without managing them via a DAO.
  • Interoperability: Games based on blockchain can interact seamlessly with other blockchain games, broadening the potential market for assets tied to any specific game.
  • In-game ownership and play-to-earn incentives: Blockchain gaming offers opportunities for users to purchase or win digital assets such as native tokens or NFTs. Gamers can retain or sell these assets on decentralized marketplaces in exchange for fiat currency.
  • User portability of data: Blockchain gaming can empower gamers with control over their data and assets, allowing them to transfer them from one platform or game to another as it suits them.

Blockchain Technology & Gaming: How They Relate

How can the fusion of blockchain technology and video games be realized? The foundational technology of blockchain gaming encompasses a range of elements; from the smart contracts that enable in-game transactions to the creation of digital in-game assets such as NFTs; as well as the validation and documentation of all in-game blockchain transactions. This very technology also enables players to gain financial rewards through gameplay. Furthermore, blockchain technology plays a crucial role in funding blockchain gaming projects — native tokens are offered via initial game offerings (IGOs) or initial coin offerings (ICOs) to developers, gamers, and institutional investors who have an interest in these games.

#1 NFTs and Gaming

In the realm of blockchain gaming, NFTs represent distinctive digital assets that players can acquire, utilize within games, and trade with other players and collectors. These assets are typically available in limited quantities, fostering digital rarity and enhancing their worth. Some NFTs might have the capability to be used or moved across different games. Hence, allowing owners to leverage them within various blockchain gaming environments, showcasing a key aspect of interoperability. As with all NFTs, the proof of ownership for gaming-related NFTs is securely recorded on the blockchain. This ensures that they cannot be replicated and their genuineness is verified.

The chart presented utilizes OpenSea rankings to depict the leading ten NFT collections from blockchain games, based on transaction volume from June 2022 to October 2023. Following the Axie Infinity security breach and the downturn in the cryptocurrency market towards the end of last year, the fervor for purchasing NFTs has diminished.

#2 Metaverse Games

Metaverse gaming encompasses digital universes that integrate cryptocurrency-based economies. These immersive platforms allow participants to navigate expansive 3D realms using avatars for real-time interactions with others. Enhanced by virtual reality (VR) technology, some metaverse games push the boundaries of immersion and realism even further.

A standout in the realm of metaverse gaming is Decentraland, built on the Ethereum blockchain. Within this digital universe, players employ tokens to craft identities, acquire virtual real estate (depicted as NFTs); and create engaging virtual events such as concerts and art exhibitions for fellow participants. Revenue opportunities exist through leasing or trading their digital properties. The governance of Decentraland is managed by a DAO, requiring members to procure MANA, the platform’s currency; to partake in voting, or to buy NFTs symbolizing digital territories or realms within the game.

Blockchain gaming, though not often associated with metaverse initiatives at present, shares many similar goals:

  • To cultivate more expansive, open-ended economies
  • To foster connections among individuals and communities
  • To extend the limits of digital ownership
  • To distribute and decentralize the value they generate
  • To enhance the immersive experience of virtual worlds, making them as real as actual reality

#3 Play to Earn

A significant benefit of blockchain gaming compared to traditional gaming is the play-to-earn (P2E) model; which allows players to earn native cryptocurrency tokens or NFTs through gameplay or time invested in a blockchain game. In P2E titles such as Axie Infinity, gamers have the opportunity to exchange these assets with fellow players within the game or monetize them on decentralized NFT marketplaces. This financial incentivization draws players into P2E crypto games and maintains their engagement with the gameplay.

#4 Ownership of In-game Assets

In the metaverse gaming paradigm, participants have the opportunity to trade in-game assets, such as NFTs. This capability grants players enhanced autonomy over their gaming journey, a notable departure from conventional gaming frameworks. Blockchain gaming safeguards player assets through encryption by leveraging decentralized networks. And because these games are not hosted on centralized servers, the risk of cybercriminals compromising player assets or tokens is significantly reduced. Moreover, the transparency inherent in blockchain ledgers enables players to monitor their assets and transactions more effectively. Hence, fostering a sense of ownership absent in traditional video games.

> Related: Beyond Crypto: 10 Real-World Blockchain Applications That Will Surprise You

Benefits of Blockchain Gaming

Blockchain gaming introduces numerous distinct advantages for both gamers and publishers.

In the realm of traditional gaming, the game’s creators maintain total control over data and servers within a closed ecosystem. This means if the creators decide to discontinue the game, players are left without recourse. However, when game assets and data reside on a blockchain, the gaming environment becomes more robust. Unlike traditional gaming models that rely on subscription fees or the purchase of non-transferable assets, blockchain gaming allows players to permanently earn and own assets, with the flexibility to utilize them across different games or virtual environments. This ownership model enhances player engagement significantly compared to conventional gaming experiences.

advantages of blockchain

Moreover, the decentralized framework of blockchain gaming fosters greater community involvement and personal investment. Blockchain games often operate under the guidance of collectives such as DAOs, which actively seek and incorporate player feedback, leading to enhancements that are more aligned with player preferences. These collectives have been instrumental in sculpting the landscape of blockchain gaming.

An additional benefit of blockchain gaming is the inherent transparency and immutability of blockchains, which prevent any form of cheating, thereby enhancing player trust. Smart contracts utilize cryptography to authenticate in-game activities, guaranteeing fairness in gameplay.

Limitations & Challenges of Blockchain Gaming

Since Tennis for Two emerged as one of the pioneering video games in 1958, traditional video gaming has evolved significantly in both design and concept over the decades. Now, as the latest entrant in the gaming arena, blockchain gaming is playing catch-up, especially in terms of user experience (UX). The UX challenges in blockchain gaming manifest in various ways:

For players unfamiliar with cryptocurrencies, navigating blockchain gaming can be daunting due to the necessity of conducting crypto transactions to acquire in-game assets. This requirement can act as a barrier to entry, given that such knowledge isn’t widespread in today’s society. Network scalability remains a persistent issue, particularly on Ethereum, a popular platform for blockchain games. Network congestion can lead to in-game delays during transaction-dependent activities, deterring players. Additionally, congestion can cause transaction fees to spike, increasing the cost of gameplay and frustrating users. Technical problems with the blockchain network can negatively impact the gaming experience. From a visual and narrative standpoint, blockchain gaming currently falls short of the advanced graphics, storylines, and game complexity seen in traditional video games. However, it’s anticipated that blockchain gaming will bridge this gap as innovation within decentralized apps (dApps) continues to grow.

> Related: The Ultimate Guide to Master VR Game: What You Need to Know

The Future of Blockchain Gaming


Compare traditional game models and blockchain game models - future of blockchain
Compare traditional game models and blockchain game models

The world of gaming is on the cusp of a revolution, and blockchain gaming is at the forefront. From true ownership of in-game assets to exciting play-to-earn models, blockchain gaming offers a more immersive, rewarding, and potentially lucrative experience for players. Whether you’re a developer seeking to build the next generation of games or a player eager to explore the possibilities, blockchain gaming is worth paying attention to.

While the technology is still evolving, its potential is undeniable. Here at AMELA Technology, we are at the forefront of blockchain development, providing innovative solutions that can help you navigate the exciting world of blockchain gaming. We offer a comprehensive suite of services, from concept development and tokenomics design to smart contract creation and security audits.

Contact us through the following information:

  • Hotline: (+84)904026070 
  • Email: 
  • Address: 5th Floor, Tower A, Keangnam Building, Urban Area new E6 Cau Giay, Pham Hung, Me Tri, Nam Tu Liem, Hanoi

Editor: AMELA Technology

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