My anthropology thesis was based on the video game Second Life when I was an undergrad. It wasn’t simply a video game, though, and it was a virtual environment where users’ avatars may live, play, and work.
People needed a method to exchange value with one another, just as they did in the real world. Someone who made virtual clothing wants to be compensated for their efforts.
What is the solution? The game’s creators, Linden Labs, devised a virtual currency that users could spend and even exchange for real money outside of it.
That is what we now refer to as cryptocurrency. It was just a way to compensate people or pay for goods and services within the game at the time. Fatboy Slim even performed a concert on one of the virtual islands at one point, charging people to watch it.
Linden Labs has launched a new virtual world project called High Fidelity. They’re employing blockchain to back their internal network currency this time. That shouldn’t come as a surprise, given that the gaming industry was one of the first to witness the peer-to-peer behavior that has become the foundation of today’s cryptocurrencies.
While the gaming industry has led the way in many ways, it may be overtaken by the technologies it helped to develop. Here’s how to do it:
A Developing Sector
The gaming business has a long history of assisting gamers in exchanging real-world currency in a virtual environment. Although digital assets are not new, our ability to trade them improves.
The CryptoKitties craze on Ethereum’s network, for example, is built on collecting and exchanging real-valued digital kittens. Even though it is still relatively new, Ethereum is already experiencing transaction volume issues, and as the game progresses, the volume of the game will only rise.
The interesting thing is that we now have a blockchain-based gaming engine that can be utilized for digital asset trading and collection. It’s building the framework for more complex blockchain-based games, as well as forcing the network’s volume capacity to grow.
Business Models That Are Changing
Blockchain is transforming the industry’s business models and improving game engines. The eSports business model is currently based on streaming, sponsorship, and traditional sports compensation. As blockchain technology becomes more widely used, we may witness a change toward a more decentralized remuneration and sponsorship model. We can see a direct link between players and the firms who support them, with new revenue structures that benefit gamers.
However, the changes may affect developers as well. Rather than relying solely on centralized companies to create games, independent developers might be rewarded for improving them in exchange for nominal transactional fees.
There are a lot of enthusiasts and developers who want to help but can’t because of the current models. They want to work in game development, but they can’t get a position with a major firm, so they’re effectively shut out of the field.
Independent game creators would build on common frameworks and get reimbursed for their efforts thanks to blockchain’s open-source mentality.
Developers are compensated.
However, for value to be exchanged virtually, the game must include a marketplace or some form of ecology. This opens up exciting possibilities for game producers and gamers who wish to have more influence over and involvement in the games they’re playing.
Let’s say a developer wants to create a game within a game. Token payments could be used to motivate them to help construct it. As a result, skilled gamers will have more opportunities to create and own the game.
Imagine you want to add something to your favorite game but lack the technical know-how to do so. As a result, you pay a developer in tokens to accomplish it for you, thereby compensating them for bringing your concept to reality.
The difficulty is that video games work the same way that movies and television shows do. They’re quite one-sided, and the customer accepts what is provided to them and follows along passively. The blockchain represents an opportunity to reclaim some of that power for the players. We may soon have games conceived or developed in part by the people who play them.
The value exchange that began in virtual worlds such as Second Life has yet to attain its full potential, and we can’t yet transfer money from a game to a bitcoin wallet to a Paypal account — or even cash in hand. However, blockchain technology is gaining traction, and the gaming business is both driving and being influenced by it as time goes on.