Why gaming could be a ‘killer app’ for the blockchain

Photo credit: tiumentseva / 123RF

While 2017 was a blockbuster year for blockchain technology and cryptocurrency, it’s still not clear to the person on the street how this technology impacts everyday life.

The key to taking blockchain mainstream might be one of the most consumer-friendly markets: gaming. Startups are using crypto tokens and launching a number of video game-related services based on blockchain tech.

Gamers are arguably a great target audience for blockchain applications like cryptocurrencies. They are used to online payments and dealing in fungible items that only exist within a digital ecosystem. They’re familiar with virtual currencies too. Online games and game stores like Steam often have their own digital wallets that contain credit bought with fiat currency.

Not to mention there are people out there right now breeding, selling, and buying cute cartoon kittens that only exist as objects on the Ethereum blockchain.

A new market

“Gamers are already fluent in virtual economies both in and outside of games, with many virtual items worth significant amounts of fiat currency,” says Lisa Hanson, founder and managing partner at market analysis firm Niko Partners. This makes them ideal early adopters of cryptocurrencies, several of which cater specifically to gamers.

Singapore-based startup Bountie is planning an online gaming platform where players will be rewarded in its own cryptocurrency for the time they spend playing games and participating in the community. They can then use Bountie coins to purchase new games and merchandise or buy into online tournaments.

Besides enabling payments, blockchain records could help gamers build a profile of their in-game achievements, forming a “resume” when joining tournaments or esports teams. The startup hopes this will help proliferate Bountie coins among the community.

“Virtual currencies can only be used within one ecosystem,” says Bountie CEO Lex Na. Cryptocurrencies, on the other hand, can be exchanged for fiat currency or converted into other cryptos through platforms like Changelly.

“I think that the interoperability, the value of allowing gamers to bring the online into the offline world, is taking cryptocurrencies and the blockchain mainstream,” Na muses.

Gamers are ideal early adopters of cryptocurrencies, several of which cater specifically to them.

Australian company Game Tester plans to give small game developers a platform where people can play games, spot bugs, and offer feedback. Players get paid for their efforts in GTCoin, the company’s own token. They can then use the coins to buy more games, in-game content, or gaming hardware, using blockchain technology to register and catalog gamers’ contributions and payments.

Game Tester is currently working out deals with vendors and manufacturers. The idea is that a user could buy, say, a gaming laptop with GTCoins. The laptop vendor would then sell the GTCoins back to Game Tester in exchange for fiat currency, unless they choose to hold on to the tokens. “But we’re making the assumption that a hardware company is predominantly going to want cash in their local currency, so we’ll manage that for them,” explains co-founder and CEO David Dobson.

Singapore-headquartered startup Enjin focuses on ownership and trading of virtual goods. The global virtual items market is estimated to be worth over US$52 billion, according to Frankfurt Stock Exchange operator Deutsche Börse, which created a virtual goods trading exchange called Swapster in 2015.

Not just a gimmick

Battle royale