It seems like every day, cryptocurrency becomes more ubiquitous. According to Forbes, the market capitalization of all cryptocurrency has increased from $7 billion in January 2016 to more than $130 billion. Bitcoin (BTC) has appreciated 30X since 2013, and Ether (ETH) has seen its own meteoric rise—100X since August 2015. Meanwhile, the Initial Coin Offering (ICO) has now generated more funding for blockchain companies than venture capital this year.
To which industries does BTC owe its meteoric rise? As a gaming industry veteran and CEO of the industry’s most comprehensive digital goods marketplace, I can tell you firsthand that digital gaming is one area where cryptocurrency has flourished. And I’m not just talking about online gambling. On our platform, Gameflip, our 2 million gamers use BTC heavily to purchase in-game digital goods and more. The other major marketplaces for virtual gaming items—opskins, bitskins, g2a and kingpin—all accept BTC as well as fiat currency.
But this is just the tip of the iceberg in terms of how digital currency will transform gaming as we know it. Industry leaders, including my colleagues at Gameflip, are now combining the blockchain with the world of in-game digital goods—a trillion-dollar opportunity that could shift the gaming paradigm forever.
Blockchain’s implications for digital goods marketplaces
When you talk to any avid gamer about earned digital goods—the ones they receive for leveling up, defeating other gamers and achieving various benchmarks, rather than the ones they purchase directly from the publisher—you’ll undoubtedly hear criticisms of the current trading system. That’s because there really isn’t much of one.
Gamers devote substantial time and dollars earning digital goods. Yet the moment they stop playing that particular game, their investment amounts to nothing—because no secure, cross-game trading platform currently exists for gamer-earned goods. At Gameflip, we watch this market closely and believe it represents a trillion-dollar opportunity for the gaming industry, which is already generating $94.4 billion in digital gaming revenue from direct-from-publisher digital goods alone.
Current marketplaces that try to facilitate the trading of gamer-earned goods are plagued by fraud, a lack of transparency and the inability to trade across games. Forums generally do not offer adequate protection for buyers and sellers, which often leads to fraud. The Steam Community Market is more established, but only allows users to cash out for other purchases within the Steam platform. Opskins, one of the best-known third party sites in the space, brings in $120,000 worth of transactions daily, but overall the other solutions in this category have been associated with a lack of transparency.
At Gameflip, we recognize that the solution to this market gap lies in the blockchain. With the launch of our ICO on October 13, we will take a significant step toward creating a fully transparent, frictionless infrastructure for transacting digital goods.
The Ethereum blockchain will serve as the backbone for our FLIP token and decentralized ecosystem. Through this system, gamers can easily send digital goods and FLIP to each other, as long as both sender and receiver have an Ethereum-compatible wallet. Game publishers can incorporate this function with minimal integration efforts. The blockchain will act as a multi-game database, securely storing all digital goods and FLIP and tracking who owns them. Using this powerful technology, trading can take place not only on the Gameflip platform, but universally across any and all marketplaces.
With more than 2 million registered users—more than 25% of them active monthly—Gameflip is in a prime position to provide the industry’s leading platform for trading gamer-earned digital goods. It’s good for gamers, who will have the flexibility to buy, sell and trade digital goods with other gamers in a zero-fraud environment. It’s also good for publishers, who will receive commission each time a gamer makes a transaction using our smart contracts. Our liquid marketplace will also encourage gamers to purchase substantially more digital goods than they do today, because they know they will be able to recoup their investment.
And FLIP is also good for gaming, which has already shown it’s ready to embrace digital currency and a transparent, decentralized ecosystem
About the Author:
JT Nguyen, CEO and Co-Founder of Gameflip, is a successful serial entrepreneur with a proven track record. He has over 15 years of experience building and managing complex businesses, including 10 years in the gaming industry. Prior to Gameflip, JT served as COO of Aeria Games, a global publisher and developer of free-to-play games, growing the company from 10 employees to over 300 worldwide, overseeing operations in the U.S., Germany, and Brazil. Under JT’s leadership, Aeria Games’ annual revenue run rate reached $110 million, and the company was ultimately sold to ProSiebenSat.1, a German media conglomerate.
Prior to Aeria Games, JT’s other experiences cut across multiple industries. Among other things, he has served as operations strategy consultant in the finance industry at HSBC, software engineer in the retail industry at an early stage eCommerce startup, and RF hardware engineer in the mobile industry at Motorola.
JT obtained his MBA from the UCLA Anderson School of Management and his MS in Electrical Engineering from Stanford University. He obtained his BS in Electrical Engineering from the University Illinois at Urbana Champaign where he graduated first in his class.