There were many trends in the crypto market last year. Concepts like non-fungible tokens (NFTs) and decentralized finance (DeFi) grew significantly, allowing more people to earn money and join the ecosystem.
But a new and exciting trend took hold towards the end of 2021 - crypto and blockchain games. User numbers spiked for Axie Infinity, Decentraland, and many more.
Blockchain and crypto games are highly popular because they combine two things people want - entertainment and money. In this article, we’ll explain crypto games and why users love them.
What is Crypto Gaming?
Consider the most popular games in the world right now. In most of these games, the developer owns all in-game assets - currencies, avatars, skins, and more. Gamers play to win these assets, but ultimately, the developers own them.
The same goes for information. Game developers own a significant chunk of it, giving them the final advantage.
But crypto games are different. They are built and run on blockchains, giving everyone equal access to assets and information.
Generally, crypto games implement blockchain for two purposes - currency development or gameplay. Developers can choose to build their entire games on blockchains, or they can simply create an in-game currency for users to earn.
If the game is built on blockchain, every action and interaction is stored and verified as a new transaction block on the blockchain.
In the case of currency development, games can implement NFTs or some other concept as in-house assets. Players earn these currencies when they level up or achieve specific milestones, whatever they choose.
Why Are Crypto Games Popular?
As we said, crypto games combine two things - fun and earning opportunities.
The games themselves are entertaining, attracting people who just like to play for leisure. But, most users play these games for their earning opportunities.
Crypto gaming is a more decentralized form of gaming where players actually own their unique in-game assets. If they want to make money, they can sell these assets for actual cash to interested parties.
They offer digital assets that can fetch actual returns.
Take Axie Infinity, for instance. In this game, players enter a metaverse where they breed digital pets - known as Axies. Players battle their Axies with one another, earning rewards as they level up and win more battles. Players can also accumulate land, on which they raise and battle their Axies.
Axie Infinity blew up in 2021, primarily because of its marketplace. Here, players can trade just about anything - Axies themselves, special features, rewards. Axie Infinity successfully built an economy within its ecosystem.
Just like you would buy NFTs on a marketplace like Rarible or OpenSea, Axie Infinity allows you to make purchases. If you have something of value, you can make money by selling. As such, Axie Infinity has effectively capitalized on what everyone wants in gaming.
Are There Risks to Crypto Gaming?
While crypto games are very popular, they don’t come without risks.
The first is the issue of access barriers. For example, to play Axie Infinity, you need to have at least three Axies. With Axies priced at well over $100 each, the average player will bail. After all, thousands of high-profile games like Fortnite are entirely free to play.
Also, players have to deal with security risks. If a crypto game uses NFTs, you need to ensure that the NFTs are compatible with the crypto wallet you own. You also have to guard against scams.
For now, the crypto gaming space is largely unregulated - even more than the traditional crypto space. Game developers don’t have any anti-money laundering (AML) or identity verification requirements, so you need to be careful with your transactions.
Players can also lose money through asset volatility. Crypto games can develop their own currencies for payments and more. Like other cryptocurrencies, these assets are susceptible to price swings. You could end up having to cut your losses.