By now, it is beyond obvious that cryptocurrencies are here to stay. A project that once seemed like a crazy dream – or nightmare, for some – has gradually gained legitimacy and worldwide acceptance, with several vendors and even governments across the globe accepting cryptocurrencies and especially bitcoin as an alternative means of payment. Yet the bitcoin project, it seems, stretches beyond simply delivering the ultimate decentralised digital currency; the underlying technology that powers bitcoin, namely blockchain, has extended its reach into other industries. The gaming world has quickly embraced blockchain – but what could its uses be for the gaming and entertainment industry?
Blockchain Set to Transform Buying In-Game Items
For a while now, free to play games like the latest global hit Fortnite or the massively popular MOBA League of Legends have generated immense revenue by selling in-game merch to players. Seasoned and amateur gamers alike are quick to spend money on products that help tailor and individualise their gaming experience, like skins for their character, weapons or loot. A parallel black market has even emerged where players buy and sell their hard gained loot from their favourite games – and game development studios have fought back, claiming that, under the law, any in-game items are still technically their property and not for players to trade among themselves. Blockchain, bitcoin and a wide array of other cryptocurrencies could be a game changer for that market. First of all, users could use cryptocurrencies to buy in-game items, as they have done for a while now, usually using third-party services that bridge the gap between cryptocurrencies and the gaming industry.
According to Statista, an astounding 44% of gamers have stated that they have used blockchain technology to buy or trade in-game items in 2018. Even though 54% have stated that they have not done so, the number of those who have is pretty high for a relatively new technology. But besides using cryptocurrencies to pay, there is a whole world of possibilities that blockchain tech unlocks. We do not know what the future holds for cryptocurrencies, but the blockchain market seems to be on a separate upward trend; it is estimated that its value will rise from over $411 million in 2017 to more than $7.6 billion by 2022, exhibiting a Compound Annual Growth Rate (CAGR) of almost 80%. How could the gaming industry tap into this potential? For starters, it could use the blockchain technology to power gameplay and transactions within the game, effectively conferring ownership of all digital in-game goods to players – who could then do as they please with them. The decentralised nature of blockchain helps it make transactions safe from fraud and also impossible to tinker with; once you have acquired ownership, no one can undo the fact.
The Entertainment Industry Has Cautiously Embraced Bitcoin – but Blockchain Offers So Much More
In that same vein, blockchain could be used to change the way games are designed and played. CryptoKitties is one of the world’s first games to date that was developed using blockchain tech – which in essence means that no one can intervene and change the game or take away your accomplishments. The player holds as much power as the developer does. Blockchain and its uses might even survive cryptocurrencies in the online gaming world, since they also come with disadvantages; online casino Betway reports that while many providers in the online gambling industry embrace cryptocurrencies as a form of payment, land-based casinos still struggle with issues like conversion, server security, protection against money laundering, and which cryptocurrencies out of the lot to accept. This is not an easy task, and this is probably why online game developers like Riot Games, which has developed League of Legends, do not yet accept bitcoin and the like.
But blockchain is a whole different story that could transform the entertainment industry as a whole. Introducing blockchain technology into the music industry could mean that regional limitations on streaming services like Spotify or Netflix might become a thing of the past, as service providers will need to reconfigure the way they reach out to clients. Or it could help battle piracy in the film sector, as blockchain could allow encrypted transactions to be embedded in the metadata of a film, which means that creators could be able to track down unauthorised modifications and distribution. Its potential to verify transactions could be further used to consolidate the authenticity of ticket sales, as well as implement what has been dubbed “smart contracts”, which lets artists have control over the distribution of their creation by casting the middleman aside.
And this is just the tip of the iceberg. As we continue to unlock the potential of blockchain technology, it seems that the possibilities will become truly endless – and the entertainment industry will see a radical transformation.