Blockchain is not pure evil | Newspapers

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Blockchain-based play-for-profit (P2E) games stole the show in 2021, Explodes From a marginal hobby to a large portion of a decentralized space. They even helped people in developing economies put Food is on the table, as the commercial models of these games are not shy about growing in-game currency and items to resell them to other players, something that many multiplayer online (MMO) games via the blockchain do not refuse to say, to say the least. .

The mainstream game industry was taking notes as a P2E rocket headed toward the moon — and its flight has left the industry bitterly divided. On the other hand, senior executives at major gaming companies, such as Ubisoft and Square Enix, have set their sights on the new market, seeing new business models, new revenue streams, and new monetization opportunities — and telling investors that they know what great kids can still score a few Additional points.

Related: Play-to-Earn games usher in the next generation of platforms

on the other side , players They were less liked. to attack Against blockchain initiatives, even from beloved developers. Developers aren’t in a rush to adopt new technology, it seems: About 70% of game developers have no appetite for blockchain or crypto, according to a recent major survey. Watch. It also means 30% are interested in varying degrees, but the overall sentiment is negative.

Interestingly, the survey included some of the developers’ concerns about developing games on the blockchain. These are mostly all the regular criticism the crypto community has long been used to – environmental impact, scams, monetization issues. Well, let’s set the record straight again, this time focusing specifically on the game world.

No, blockchain doesn’t have to set the earth on fire

The environmental impact of the blockchain is the easiest fruit a critic can come up with, but at this point, it likely has more to do with perceptions of the industry than its actual situation. Yes, it is true that Ethereum, the second largest blockchain by market cap, has a high carbon footprint due to its use of a Proof of Work consensus mechanism – but you don’t have to develop on Ethereum in the first place.

Related: How blockchain technology is changing climate action

It’s no secret that sustainability is one of the main fronts in DeFi’s battle for the Ethereum throne. Many other blockchains, from Cardano and Avalanche to WAX and BNB Chain, boast their lower power consumption to attract more green development teams. Blockchain games are no different, and the vast majority of game developers base their projects on eco-friendly chains.

Admittedly, the main reason to rely on Ethereum is the fact that you are entering a cutting-edge ecosystem worth around $310 billion, which is more promising for your bottom line than moving to an ecosystem with a lower market capitalization. However, cool projects attract more people and transactions to any blockchain network, which leads to higher token price and market cap. Additionally, since dozens of blockchains support the Ethereum virtual machine, the smart contract execution environment, developers will be able to easily migrate their applications to Ethereum once the entire network transitions to Proof of Stake.

Additionally, developers can go the extra mile and build sustainability into their economy by design. They can install royalty payments to carbon offset providers in their NFTs and tokens, pledging to respect the environment in the strongest possible way. Energy and finance already the shopping Carbon credits are hard on, after all, so it might make sense to adopt a similar strategy as part of a broader quest toward green decentralization. Sure, it will help the studio’s revenue, but the sustainability is worth it.

No, blockchain is not just about scams

Cryptography has a scam problem – which is undoubtedly true. Over the past year, scammers, scammers, and hackers have managed to do this to pretend With $14 billion in cryptocurrency. Cryptocurrency scams come in all shapes and sizes, including rug pulls, social engineering, pumps and dumps. Anyone entering the space should be aware of the potential dangers, that’s for sure.

Related: Beware of complex and rug-pulling scams as thugs target crypto users

However, the mainstream gaming industry also has a fraud problem, and in fact, tonic In 2021, as discovered by Lloyds Bank. COVID-19 has brought more people and money to games, and scammers go wherever money flows, using every technology proven, from phishing To malicious third-party websites that claim an offer Free in-game coins. Meanwhile, the survey found that only 8% of gamers have seen tips on how to spot scammers.

In both areas, there are also cases of questionable behavior on the part of the developer. From crowd-funded projects that have gone for years without updates to first versions selling on Steam without seeing further development, the mainstream scene is not without scammers. On the crypto side, there are developers likewise who are disappearing due to funds raised through token sales and other scams.

In general, cheats can happen anywhere that involves something of value, whether it is a magical sword that helps your in-game character deal with those pesky dragons or, for example, real estate. For both crypto games and mainstream games, education should play a major role in rooting out scams. Developers working on blockchain projects must make sure to pass on the ABCs of fraud avoidance to players at every possible opportunity.

At the same time, the encryption space provides additional protections against fraud. When integrating with decentralized services, such as exchanges or production farms, developers can scan their code in-chain as it is available out in the open. They can also use the maturity and market value of specific protocols as a measure of their security, as both indicate greater investor confidence and stronger protection.

No, blockchain is not bad for monetization

At first glance, it seems that the concern about potential monetization issues is somewhat misplaced. Blockchain was designed from the ground up as a value transfer protocol, which, if anything, is actually quite conducive to monetization efforts. A P2E game should naturally include a strong economic component that will allow players and developers to make profits.

At the same time, there is a problem here. Any blockchain becomes part of the larger ecosystem. This ecosystem is inherently turbulent, volatile, and speculative, and these are the risks that players and developers alike must prepare to face even to enter the business. Here’s a quick example: to play an NFT game, you usually have to incur the initial cost of purchasing the NFT. To be able to do this, you must first purchase the original token of the series on which the game is based, which means exposure to its volatility that will also be present if you want to withdraw funds by selling NFTs later. Likewise, any in-game token will inevitably rise and fall with the broader crypto market. Or will they?

The answer, again, depends on the choices developers make. The studio may choose to build the game’s economy around a stablecoin whose value does not fluctuate over time despite the serpentines of the cryptocurrency market. The reason teams rarely do this is because they are looking for a token economy that is rising so fast, which is only possible with a more dynamic currency. It also creates an additional risk of instability on top of the general crypto market moves, as the economy built in this way could begin to unravel once the token shifts or the growth of the player base slows.

Related: Cointelegraph Research report analyzes GameFi bumper in 2021 and trends in 2022

However, developers can avoid this problem by being more creative with monetization. They can use the programmable nature of blockchain tokens to algorithmically control their price dynamics by burning and minting them based on demand and broader market volatility. At the same time, they can add indirect monetization through second market fees to NFT sales, which will effectively create an endless revenue cycle and align their interests with those of users. If the developers release the NFT content players want, they will be able to get a discount on all subsequent resales, offsetting what they could gain by raising the price of their token.

Like any other technology, the blockchain is not inherently good or bad. It’s a protocol with its own design flaws that smart developers can mitigate by making smart design choices. While not all games need to adopt decentralized technology, there is nothing wrong with experiencing the value that blockchain brings to game design, and doing so in a safe and sustainable way is above all a matter of choice. .

This article does not contain investment advice or recommendations. Every investment and trading move involves risks, and readers should do their own research when making a decision.

The opinions, ideas, and opinions expressed here are those of the author alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Adrien Creon He is the founder of Berlin-based blockchain gaming startup Spielworks, with a background in computer science and mathematics. Having started programming at the age of seven, he has successfully connected business and technology for over 15 years, and is currently working on projects connecting the nascent DeFi ecosystem to the gaming world.

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