With innovations in both the gaming and the blockchain industries at an all-time high, in this mini-series we are exploring what the current limitations are in centralized gaming models and how decentralized gaming can unlock a new universe of opportunity for publishers, developers and gamers. We also take a look under the hood of Cartesi and highlight how our infrastructure is making smart contract development more accessible to the millions of game developers around the world.
In the first part of this mini-series, we looked at how the centralized nature of current server infrastructure can leave websites, publishers and gamers open to hacks, bad actors and in the worst case scenario, a total loss of their content.
In this second article, we want to dive into how blockchain technology has made way for a new era in gaming, one in which gamers can see the real value of their in-game possessions, and can have true ownership of the items and rewards that they earn through countless hours of gameplay. We’re also going to talk about how DAOs (decentralized autonomous organizations) in the blockchain gaming space can democratize the decision making process, giving gamers more of a say about what changes are made to their favourite games.
In the real world, watches, artworks and many other collectors items are considered valuable due to their scarcity; with physical items, the owners are often able to verify the rarity of, say, a limited edition top trumps game card, due to the fact that the card will have only been produced a certain number of times.
But with the dawn of the new digital age came the capability for infinite production and, with the introduction of MP3s, MP4s and torrent platforms such as Napster, various industries saw heavy damage to revenue streams, with no restrictions on downloads meaning that consumers could make as many illegitimate copies of a music track, video or video game as they liked.
Blockchain technology introduced the concept of digital scarcity, allowing for the creation of a non-modifiable record of anything — from digital artwork to in-game items — reinstating provable rarity during a time when digital items are becoming more popular than ever. The emergence of NFTs in recent months has shown us that there is a massive consumer appetite for probably rare digital content, with sales of artworks reaching millions of dollars and rare digital trading cards fetching huge sums on the decentralized markets.
In the blockchain gaming industry in particular, verifiable scarcity creates more trust and transparency; gamers are often unable to find out truly how rare their in-game items are in mainstream gaming and, in blockchain games that are not decentralized, game companies have the power to mint new game items at their discretion, damaging the value of otherwise unique items. With access to an immutable ledger of records, players are able to verify the total quantities and overall scarcity of items, creating more trust and opening the doors wide for movement into a world of in-game marketplaces within which anyone can trade provably rare gaming assets.
With the evolution of decentralized games and along with verifiable scarcity also comes the opportunity for true ownership of digital assets for billions of gamers around the world.
Looking at current legislation of intangible digital property rights, the laws are written largely in favour of the rights of the developer’s IP over the gamers intangible counterpart, in what’s known as the End User License Agreement (EULA). The EULA is a contractual relationship that every gamer (often unknowingly) enters with the copyright holder of whatever video game they are playing every time they play, that essentially stipulates that they are given the right to play the game, and nothing else.
As E-sports and professional gaming becomes increasingly popular, blockchain-based games can enable players to have permanent ownership and full control over their in-game assets. Not only does blockchain technology give permanence and transferability to in-game rewards, dictating their value and scarcity as mentioned above, but assets can also be tied to non-fungible tokens (NFTs), which can be transferred in a frictionless and decentralized manner whilst retaining ownership at all times.
With current centralized gaming models, if the publisher decides to pull the plug or if development ceases, players are left with no control over what happens to their prized in-game possessions such as weapons, arsenals, and avatar characteristics; when the game is gone, their items are gone, forever. In blockchain gaming models, in-game items represented by NFT’s cannot be reproduced, deleted or taken away from the gamer that owns them; they can also be transferred from one blockchain game to another, presenting a whole new world of opportunity for cross-platform and cross-game functionality. This is a big deal and it’s why some of the gaming industry giants such as Ubisoft are innovating in blockchain.
DAOs (decentralized autonomous organizations) are organizational structures that have been used in various ways within blockchain-based ecosystems to remove centralized power from one or a group of individuals, instead putting the decision making power in the hands of a network of voters. DAOs are run on a public, permissionless blockchain that cannot be taken over by a State or another party and are not organized hierarchically around executives or shareholders, such as is the case with traditional “top-down” organizational structures.
Utilizing DAOs within blockchain based gaming models is becoming a popular topic as we move into a new age of digital experiences and virtual innovation; DAOs can revolutionize the way games are played, experienced and governed and, in stark contrast to centralized gaming platforms where the rules changes unilaterally by original game developers/companies, with a DAO in place gamers can have a voice and vote on the future game development, changes of rules in gameplay, and even shareholding infrastructures within a company itself.
With a fully decentralized technology and governance constructed within the fabric of a blockchain game, token holders, players, liquidity providers, developers and mod creators could collaborate freely, while having real economic incentives.
All of the above points work towards building a future for open in-game economies. By decentralizing all aspects of the current gaming industry as we know it, we allow for different entities and players to bring value and also liquidity to the game world (we’ll explore this side of things in our final part of the mini-series).
The Cartesi team stands at the forefront of innovation when it comes to making the tools and knowledge required to construct the future infrastructure of blockchain gaming available to the millions of software developers around the world. Having partnered with world-renowned institutions such as IMPA, we have made it our mission to unlock the potential of blockchain technology and smart contracts so that they can be utilized to build the decentralized innovations of tomorrow.
We have also incubated several innovative project founders and teams, supporting them on their journey and giving them all the tools they need to build decentralized systems with the Cartesi technology stack. You can read about our incubation program winners here — We have also just opened up Cartesi Labs for applications by trailblazing startup founders looking to build on the Cartesi platform! Find out more at https://cartesi.io/en/labs.