FMX 2022: The dangers of the Blockchain in games

FMX 2022: Blockchain gaming

During the FMX 2022 even the topic blockchain gaming was presented and discussed. The two games ZedRun and Humanpark were used as example for the integration of blockchain gaming. Both games are minimalistic platforms that players can use to resell skins they bought or created. It could be reasoned, that games like these are but a platform, that abuse the blockchain system.

The blockchain – what is it?

A blockchain is a distributed database that is shared among the nodes of a computer network. As a database, a blockchain stores information electronically in digital format. Blockchains are best known for their crucial role in cryptocurrency systems, such as Bitcoin, for maintaining a secure and decentralized record of transactions. The innovation with a blockchain is that it guarantees the fidelity and security of a record of data and generates trust without the need for a trusted third party.

While the core idea of the blockchain holds a lot possible security, it may just be too early for a general use. The decentralization of records goes only as far as the biggest platform the blockchain is hosted on. Records are saved and can be researched, at least as long the internet as the main platform exists.

The blockchain in games – ownership of what?

“True ownership of assets you earned or created” sounds like something someone, that is trying to make you join a pyramid scheme would tell you. Sadly blockchain technology is still abused frequently at the moment. Like any new technology it still holds quite a few unknowns.

The core idea of the blockchain is to create a decentralized chain of records. A person can buy a secure token that represents an asset and can not be tampered with. Each token represents an asset, with an html linking its original location. A game can sell those tokens, but never be a decentralized system, as every asset is still hosted through their platform. The company still owns the servers as well as the game each asset can be used in. If either is shut down, any asset loses its use, while the owners are left with an empty token.

ZedRun – How not to do it

ZedRun is the perfect example for how not to use the blockchain in games. To understand why, let me at first explain the game. The game is a horse race simulator that enables players to use their virtual horses in gambling. Each horse has stats that can influence the success of it, yet never guarantee a win. ZedRun can be “played” by buying entry into a race and then waiting for computer generated results. If a horse wins they may win some money, if it loses they don’t. Horses can be turned into crystals, which carry some of the stats of the horse, and used to breed new and potentially better horses. Those crystals can be bought and sold through a centralized marketplace, hosted through the platform ZedRun itself. The same goes for the horses themselves.

Because of that, assets only have value inside the game itself. As soon as the creators of the game decide to close the platform, said asset then doesn’t only lose its value but stops existing altogether. A customer that buys an asset through blockchain, buys a Token representing its location. Even if the company deletes the original asset, each user still owns their token, which simply doesn’t represent anything anymore. Seeing how the creators of the game have seemingly total power of any asset, the question of ownership is a valid one. Does any player truly own an asset, that is based on a platform which has complete control over it?

The value of NFT assets in games

Skins can be incredibly valuable as we can see through games like Counterstrike or Dota2, which already prove that monetization of assets can be achieved. These assets have their value because they are rare, desired and used in their respective games. Introducing blockchain into this system might seem redundant. The market seems to already work quite well, yet companies do find arguments for the developement.

The reason why any company would love to integrate the blockchain in their games is quite simple. It makes them money. Each and every transaction between players is tracked and recorded. Since blockchain grows and duplicates data automatically, a company does not have to manually do that. Blockchain gaming brings one more major change with it, it changes the very concept of rarity. Each and every asset would be an individual, since every asset has a chain of records attached to it. Suddenly a skin could generate value through past owners, like famous streamers. A skin that was used by a streamer with a huge following, would probably generate a much higher value.

Potential dangers

Using a decentralized tracking method could bring security for gamers beyond what is possible as of now. The tracked prove of ownership could be used to disable hackers stealing assets, that would minimize scamming as we know it. Yet this feature is rarely the reason for the blockchain in gaming, especially since companies that host the platform, still hold true ownership over anything traded. As long as a company is able to not only influence, but also delete assets as they want, ownership of any asset can’t really ever be sold. The whole idea of not having any centralized power controlling traded items is lost in this regard.

While integrating blockchain technology could be used as a new security measure, it is used to create a new space, that enables companies to earn money through the creations of their users. With minimal effort games can host a platforms, which are not much more than pretty marketplaces that promise gamers profit for little to no work. Under the disguise of a game, players can trade and create, while the owners of the game get a piece of anything earned in the process. Compared to an already existing model, of a modding community this new model of a blockchain community shows many flaws. A modding community is created by the players of a game, since they want to built up something that already exists. There are instances in which users that created mods were rewarded for their work and even paid or hired, thus enabling players to earn money through a game they play and love.

Blockchain in gaming – Not a future to look forward to

It is unlikely that games, which are nothing but a platform, will be the standart in the future. Games might change in the future and get more interactive through technology like VR, but the style of gaming won’t be greatly influenced by blockchain. I highly doubt, that games that promise NFT investments will see huge success, and they oftentimes are nothing more than reactions to recent hypes. They are creations, made to earn quick money while people are still figuring out what blockchain even is. There are many opportunities created through blockchain technology, yet it will take more time to figure out which are worth developing further.

I am sure we will see blockchain technology inserted into games and their marketplaces. The security they offer and the potential individualism they promise are reason enough to be a highly likely future for the gaming world. Yet I would strongly recommend to stay cautious of companies abusing blockchain in gaming. As for now, blockchain is less useful the smaller the company is, that use it in their games. Focusing at the core concept of a decentralized structure, it becomes obvious that a smaller platform limits a decentralized structure quite heavily.