The gaming industry has grown remarkably during the past decade, as witnessed by over 3 billion active gamers around the globe. Moreover, the fact that gamers spend approximately 160 billion dollars on games yearly further shows the growing demand for virtual games.
Blockchain-powered games such as casinos, game cards, and Real-Time Strategy (RTS) continue to increase annually, with gambling being the leading blockchain-based game. It is on this backdrop that tech-giants such as Algorand have come up with innovations to power games using blockchain technology.
How blockchain technology affects the gaming industry?
Blockchain has enhanced scalability, transparency, fairness, network speed, lower cost, and greater participation in the gaming sector. Developers have also created many games, enabling many people to improve the quality of life through gaming.
Blockchain enables easy acquisition and ownership of in-game assets. When playing games, players use various in-game assets such as guns, props, planes, etc. Therefore, gamers can use cryptocurrencies or other digital assets to purchase in-game assets.
For example, players can use Algos, the native cryptocurrency of Algorand, to purchase different in-game assets they need. Game developers can also migrate their existing tokens to Algorand thanks to the Algorand Standard Assets (ASA) feature which is a layer 1 solution. This ensures the gaming startups have a better way to monetize their gaming products whereas gamers are able to purchase in-game assets instantly. This also helps game players save on transaction fees due to the elimination of third-party FIAT payment processors and the minuscule fees on Algorand.
Another way the blockchain has improved the gaming sector is through the creation, transfer, and secure storage of digital assets, which are given to gamers as rewards or incentives. A player might be rewarded in the form of tokens or credits when he/she advances to a new stage depending on the rules of the game. These digitals items are currently being stored on centralized servers which could serve as a single point of failure. The case is different when the blockchain is leveraged as its primary attribute is decentralization. With Algorand, critical data and assets of this nature can be stored while being tamper-proof.
Algorand Offers A Unique Solution
The Algorand blockchain makes it easy to issue fungible and non-fungible tokens (cryptocurrencies, in-game points & items, collectibles, etc), which can be stored or transferred to another person while being interoperable in the Algorand ecosystem.
The fact that these assets are transferable means they create value for the gamers, who can hold or sell them. By selling these tokens and digital items, players earn a living as they can trade or redeem them for FIAT currencies.
Blockchain-based games on primitive blockchains like Ethereum usually flood the entire network with transactions causing high gas fees. This has led to a gradual shift to other alternatives to help address problems relating to speed, scalability, and transaction cost. The most viable solutions may include proof-of-stake (POS) blockchains, layer 2 solutions – side chains, state channels, and a few others. Smart Contracts on Algorand (ASC1) are fast, scalable, secure and a Layer 1 solution. As a result, it is ideal for governing the rules of online games and executing transactions while saving huge on transaction fees. In a gaming marketplace, gamers will be able to buy and sell in-game items without any central entity.
The Algorand pure proof-of-stake blockchain is endowed with Atomic transfers in layer 1. This makes it really quick to transfer ASA within a short period of time fewer than 5 seconds. In addition, these assets are interoperable and can be transferred simultaneously to many parties, and used on any dApps in the Algorand ecosystem. The Atomic transfer feature is not only secure and fast but can operate with no escrow or an intermediary. This creates a smooth flowing gaming environment, which motivates players. A typical instance where this feature can be implemented is a decentralized marketplace where gamers can buy and sell in-game items with a guaranteed nearly instant transaction finality.
With the blockchain, the level of security is high because of the unhackable nature of the public ledger. As a result, players can store their gaming assets on the blockchain and access them using a dedicated wallet. They are also unlikely to lose their important personal data. This is because blockchains use different consensus algorithms such as Proof of Work (POW) to secure the network. Algorand in that regard uses the permissionless and Pure Proof-of-Stake (PPOS) consensus mechanism which is highly secure and fully decentralized, with no forking. It is also tamper-proof and allows the storing of immutable records. As a matter of fact, Algorand is well known for its involvement with World Chess. It provides a real-time record of all Chess players’ ratings and game information that is transparent and easily accessible by everyone.
The blockchain also leads to fairness and trust in the gaming industry. Players are motivated when there is fairness during games. Unfortunately, when central authorities control games, usually there is unfairness and discrimination. Conversely, blockchain technology ensures fairness and inclusivity in the gaming arena.
This motivates and satisfies players, resulting in greater participation. As an illustration, the Algorand protocol, through its decentralization nature, gives participants equal opportunities and the same information, timely and accurately. On the other hand, dApps built on the Algorand benefit from ASC1. These gaming dApps are open source and autonomous allowing the community of gamers to modify the game through voting. Algorand will help players have greater control over their favorite games and foster collaboration between them(gamers) and developers.
Blockchain creates conducive conditions of fairness, transparency, security, and trust within the gaming industry. It also opens new doors for exploration for developers as Algorand has a low barrier of entry. With initiatives such as the Algorand Foundation Grants Program and tools put in place for developers, building games and reliable applications on Algorand is much feasible.
It is reported that Fortnite: Battle Royale, a free-to-play video game by Epic games generated over $1 billion in revenue from in-game purchases. This shows how lucrative the industry is and it is projected to grow significantly in the coming years. This calls for an infrastructure that will meet the changing demand of the gaming industry.
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