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Now that we understand how traditional gaming works, let’s see how using blockchain technology can improve it!
On-chain gaming refers to video games that utilize blockchain technology to create decentralized, player-controlled game ecosystems. Think of it as having your own game world. Unlike traditional gaming, where all game data, assets, and transactions are stored and managed by the centralized parties, on-chain gaming offers greater freedom and control to players.
In on-chain games, data is stored on a blockchain, making it immutable (unchangeable), transparent, and accessible to all players. This decentralization allows for true ownership of digital assets, which means players can trade, sell, or even use their assets across different games or platforms. If you own two copies of a special sword in an on-chain game, you can send it to your friend or trade it for another item.
Additionally, on-chain games can incorporate decentralized finance (DeFi) elements, where players can earn cryptocurrency through gameplay giving much more economic opportunities.
Before we dive deeper, let’s go through a quick refresh on blockchain technology so we can better understand how it can enhance gaming.
A blockchain is a distributed ledger technology that records transactions across a network of computers in a secure, transparent, and immutable way. Each block in the chain contains a list of transactions, and once a block is added, it cannot be altered.
In gaming, using blockchain ensures that all transactions and changes are recorded on the ledger and can be verified by anyone. This reduces the risk of fraud and ensures fairness in gameplay. For example, if player Vince sells his in-game armor for cryptocurrency in an on-chain game, the transaction is recorded on the blockchain permanently, and anyone can verify it any time.
Blockchain’s decentralized structure eliminates the need for a central authority. Such as a game developer or publisher, to control every aspect of a game!
Read more about blockchain here.
Emerging along blockchain and cryptocurrency technologies, on-chain gaming is a relatively new field. The first significant integration of blockchain in gaming was with CryptoKitties, which launched back in 2017 on the Ethereum blockchain. CryptoKitties allowed players to breed, collect, and trade digital cats. With the game quickly gaining popularity, it showed the potential of blockchain in the gaming space.
Following CryptoKitties, several other blockchain-based games emerged, including Axie Infinity, which introduced the play-to-earn (P2E) model. This model allowed players to earn cryptocurrency rewards by simply playing the game. Axie Infinity became one of the most successful on-chain games to date.
On-chain gaming is an expanding field, with many developers working to replicate the success of traditional gaming on Web3.
On-Chain Gaming leverages several blockchain features to ensure high-quality gameplay. Let’s take a look at some of these!
NFTs are unique digital assets stored on a blockchain that represent ownership of specific items or pieces of content.
Unlike cryptocurrencies such as Bitcoin or Ethereum, which are fungible and can be exchanged on a one-to-one basis, NFTs are one-of-a-kind and cannot be exchanged like-for-like. In on-chain gaming, NFTs are used to represent in-game items such as characters, weapons, skins, or virtual real estate. For instance, each CryptoKitty or Axie is represented by a unique NFT, which has its own distinct code even if the items look similar.
Players can buy, sell, or trade these NFTs on decentralized marketplaces. Since NFTs are stored on the blockchain, players have true ownership of their in-game assets. Their non-fungibility also helps protect against fraud since each NFT’s code is unique to it and can be easily verified.
Learn more about NFTs here.
Smart contracts are self-executing contracts with the terms of the agreement directly written into their code. They automatically execute when their predefined conditions are met. For example, a smart contract might be set to transfer 1 ETH to a friend after 30 days.
In on-chain gaming, smart contracts manage in-game transactions, such as transferring NFTs or distributing rewards. They also facilitate decentralized game mechanics, where game rules are enforced by the blockchain rather than a central authority. Did you know that the breeding, battling, and trading of Axies in Axie Infinity are all managed by smart contracts?
Learn more about smart contracts here.
Decentralized Autonomous Organizations (DAOs) are organizations governed by smart contracts and run on a blockchain. Unlike traditional organizations, which are typically centralized, DAOs enable members to participate in governance by voting on proposals through a governance token that represents voting power.
DAOs are very useful in on-chain gaming because they give power to the player. Unlike in traditional gaming where the game developers make all the decisions, DAOs allow players to actively participate in the governance and development of a game. For example, if players don't like a new game mechanic because they think it's unfair or it ruins the game experience, they can propose changes through the DAO. Other players can vote on whether or not to push through with the proposal. This creates a more democratic approach to game development by encouraging players to engage and collaborate together.
A cryptocurrency wallet is a digital tool for storing, sending, and receiving cryptocurrency and NFTs. Crypto wallets are essential in on-chain gaming because this is where players can manage their in-game assets, such as NFT items and tokens. These wallets can either be software-based (e.g., MetaMask, TrustWallet) or hardware-based (e.g., Ledger, Trezor).
Software-based wallets, also known as hot wallets, provide ease of access but less security. On the other hand, hardware-based wallets, also known as cold wallets, provide more security but are less convenient and often more expensive. It is very important for players to understand how to create and secure their crypto wallets to protect their assets from theft or loss.
Creating a crypto wallet is fairly simple. After deciding what type of wallet you’ll use, download the wallet application, then create an account, and secure the wallet with a strong, unique password. Crypto wallets also come with a recovery phrase or seed phrase – a series of 12-24 words that grant access to the wallet. It’s crucial to write down and securely store this phrase. Enabling two-factor authentication (2FA) adds an extra layer of security. Players should be aware of common security risks, such as phishing scams.
Here are some examples of on-chain games!
Transitioning to on–chain gaming may seem daunting for traditional gamers, there are actually resources available to ease the process! For example, Tribally is a social gaming infrastructure platform that assists traditional Web2 gamers in entering the on-chain gaming space. It provides guides, onboarding programs, and various tools to help you navigate your Web3 gaming experience. The platform also features community elements like reputation ranking, PvP challenges, and match wagering to win rewards!
Now, let’s look at some specific benefits of on-chain gaming!
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