I personally have been involved in the Bitcoin space since 2012. I have watched it grow and flourish from the early days, where peers simply traded amongst one another on bitcointalk.org, the main forums for all things bitcoin and cryptocurrency related.
I have watched great discussions unfold, which envisioned a future in which the revolutionary crypto technology reshaped large parts of our economy, and I have cheered it on along the way.
Some of these discussions unsurprisingly revolved around the gaming industry. Curious users started asking various questions, such as “what is the blockchain,” “how does the blockchain work,” and how can it be applied to one of our most beloved topic - the gaming industry?
Blockgeeks, a website specializing in teaching Blockchain technology to businesses, offers this very helpful definition:
"Blockchain is a recorded transaction that has been added to a previous transaction to form a chain.
"Each of these transactions can account for various different things, for example in the world of Bitcoin, this transaction is the movement of a cryptocurrency. Each of these blockchains is encrypted, and any subsequent transaction requires the whole chain to be unencrypted when a new block is added, before again being ‘sealed up’ with encryption and passed on.
"This chain has a permanent log of all transactions from the first block up to the last. As such, blockchain technology allows for secure transactions to occur on an open source foundation that is hard to spoof."
Once you understand what blockchain is, the reason why this technology could become huge in gaming becomes clearer. Simply put, it comes down to the “uniqueness” of the blocks in the chain. If you can incorporate this uniqueness into gaming, this could lead to some exciting and unique games.
As the groundwork was laid and the economy surrounding Bitcoin began to flourish, these early dreams and aspirations began to take root and developers started looking into the various applications, of which the blockchain could be applied.
Simple games began to arise, ones that were web-based only and used a portion of your processing power to mine bitcoins online, while you played your game. This was similar to the “mining pools” that have always existed within the crypto space, but of which had a new and exciting spin.
Not surprisingly, most of these early Bitcoin games did not pay nearly as much. Sadly, they were typically of poor quality, leading to lower success and thus they were quickly discontinued.
One of the earliest games that did find some success within the Bitcoin game space, however, was Dragon’s Tale, launched on July 12th, 2013, by eGenesis.
Dragon’s Tale is still ongoing and still using Bitcoin but in a more simplistic, raw way. Within the game, players can spend and use Bitcoin to perform various microtransactions, while at the same time, capable of withdrawing their in-game currency, thus creating a real-world economy for their player base.
Traditional video games continued to struggle to find a home for blockchain games, but one sector of the “gaming” economy had little to no trouble at all in adopting Bitcoin as a close partner.
The gambling sector, most notably online poker was under intense pressure via various sanctions and laws that outlawed US citizens from partaking and making bets with real-world currency.
This left a massive void in a space that had enormous consumer demand, as many online poker players previously made a living “grinding” and playing online poker, while many other simply enjoyed it as a pastime.
Developers saw this gap and quickly closed in on the space, creating their own software that allowed players to deposit Bitcoin into their application and make bets against one another, purely and 100% based in cryptocurrency.
In the early days, when Bitcoin was scarcely noticed and “flying under the radar,” this allowed websites such as SatoshiDice, or Bit777 to circumvent US laws, without outright breaking them.
They operated in a “gray” space, and this style of Bitcoin games flourished.
Although Bitcoin was slowly and surely being integrated into many low budget games, and although it was booming within the gambling sector, purely blockchain-based games, which relied on the technology itself were absent and still lagging far behind.
Booms and busts wracked the price of Bitcoin and various scandals such as the collapse of Mt. Gox slowed development and innovation, as it significantly tarnished the image of Bitcoin in the short term and created anxiety around delving too deeply into crypto-based technology.
Yet, time went on and wounds healed. Cold feet were warmed, and the market as a whole began to look at Bitcoin in a much more favorable and desirable light.
As is now history, this was the start of one of the greatest bull markets in history, which eventually resulted in the price of Bitcoin peaking at $19,843.11 per bitcoin near the end of 2017.
During this run-up in price, a frenzy of interest was sparked by consumers and investors with anything remotely related to Bitcoin or cryptos in general.
Game developers also got in on the action, and the first big Bitcoin game entered the market space, CryptoKitties.
For the developers of CryptoKitties, the timing of the launch of their game couldn’t have been better. Bitcoin was reaching new highs daily, and interest for anything Bitcoin-related was exploding.
This simple game, although humorous as it is, was actually quite groundbreaking and history-making, as it was the first major breakout game to be based on the blockchain technology, unlike most of its predecessors, which merely incorporated the Bitcoin “currency” into their gameplay via microtransactions.
This blockchain game allowed users to create, breed and collection CryptoKitties, which they 100% owned and were based on the blockchain. This meant that they could be transferred and sold to others who had interest.
Essentially, these cats were and are their own form of cryptocurrency. Which means they have tangible and real value.
How much value, you ask? That depends on the CryptoKitty in question. Prices vary from basically worthless to over $100,000. Crazy, I know.
The success of this game has since spurred on others to take up the cause and create their own blockchain games, such as Etheremon, CryptoCelebrities, HashPuppies, and CryptoPets.
With this rise in blockchain games, which is very much still in its early infancy, we have come full circle and old ideas are now new once again.
Developers have returned to the early concepts that they attempted to put in place but were unsuccessful in doing so due to poor gameplay and graphics quality.
We are starting to see games where developers "loan" a portion of the players processing power, willingly of course, as they enjoy their content. This allows games such as AllMine to mine cryptocurrency at a substantially increased and faster rate, while at the same time, give back to their player base via in-game rewards and currency.
Unsurprisingly, this in-game currency typically comes back to the developers anyway, as to further progress in such games, you must spend that currency. This allows developers to profit on both ends, but ethically, as the consumer is knowingly and willingly partaking in the partnership.
Currently, the only thing slowing down the rapid expansion of Bitcoin and blockchain games is the current setbacks affecting the price of Bitcoin and cryptos in general. Confidence has sagged in tangent with their crash in prices over the course of 2018.
However, crypto technology is here to stay and like Pandora's box, once opened, it can never be put back in again. The possibilities are just too vast and too powerful.
Blockchain games are going to continue to rise, as developers find new and unique ways to apply this revolutionary technology, making it work both for them as a business and the consumer.
I for one am both excited and interested to see where the future of blockchain technology will take us, both in the gaming industry and the broader economy as a whole, as we plot our course through 2018 and the many years that lay ahead of us.