Digital Currencies Are Impacting Video Games with New, Exciting Possibilities

Video games are evolving. We’re seeing mobile games making headlines, billions are being made by smaller studios, and Fortnite has seen the rise of further cross-platform play. I think we can all agree that video games are drastically different today than they were even 10 years ago.

I remember playing Resident Evil and jumping as the zombies attacked. Those pixelated games are a laugh today. It’s like a square, pixelated mess attacking.

But graphics and processing power aren’t the only changes impacting video games. The way that we pay for video games has changed. People are buying digital currency to pay for their gaming expenses.

Digital currency is a good complement to gaming.

We can see direct examples of this with World of Warcraft and Blizzard’s tokens. These tokens can be used to redeem 30 days of game time, and people can buy the tokens with cash or gold in-game. Tokens are redeemable for $15 Blizzard Balance, too.

This is very similar to how Eve Online implemented PLEX, which was purchased with fiat money.

PLEX is a little different because the currency is controlled by CCP Games. PLEX is tied to value by being worth one month of game time, so it has a set value.

It’s neat to be able to purchase Blizzard Tokens and redeem them for gold, too.

eve online lich king

Closed Market Digital Currencies

Blizzard has created what is known as a closed market, meaning that the company controls the supply of coins. The good thing about this is that gamers are protected against cyberattacks to some extent.

But when a closed market is created, it often leads to other digital currency adoption not occurring.

For example, Blizzard, as of writing this, has said that they want their customers to be able to use any currency to purchase games, but the community has been asking to be able to buy games with Bitcoin.

Why would Blizzard do this when they control their own digital currency? Blizzard wants you to buy digital currency that they control – not a currency out of their control.

Not every developer is going to be this strict, and there’s still hope that Blizzard will one day start accepting Bitcoin and Ethereum.

We’re actually seeing massive payments being made in digital currencies.

cryptokitty dragon 600 eth

$170,000 Cryptokitty Sold

CryptoKitties, if you’re not familiar with them, are digital cats that can be collected and bred. Every cat is one-of-a-kind, and you own 100% of the kitty. You can’t destroy or replicate your kitty. It’s a big deal because the entire system is built on blockchain technology.

It’s the same technology that has fueled Bitcoin and Ethereum. When you buy bitcoin, you’re doing so with blockchain running in the background. Why?

Blockchain is a very secure way to track ownership, and this allows for gamers to:

  • Buy CryptoKitties
  • Sell CryptoKitties
  • Trade CryptoKitties

And blockchain is so powerful that real estate will soon be powered by it. There are cross and checks to ensure that you don’t get ripped off during a transaction. Smart contracts can also be created using this technology.

It’s going to change the world.

The crazy news is that it has already changed the world thanks to CryptoKitties.

How?

Dragon, a cute kitty in the game, sold for $170,000, or roughly 600 ETH (Ethereum). That’s a higher price than some homes. You can buy a high-end vehicle for that amount. Another buyer purchased a digital kitty for $110,000, and someone else spent $107,000 on a digital kitty.

Ethereum has allowed the buyer to remain anonymous to an extent, although the username of the owner is now known.

Digital currency allows gamers to make purchases, especially large ones, without there being a trail to find out who the owner is. It’s a great way for anyone who would rather use digital currencies than fiat currencies to enjoy games.

server blockchain

The Idea of Ownership Changes with Blockchain

Blockchain is a very exciting advancement in society – whether or not you realize it yet. The addition of blockchain into a game means a lot of ownership changes. Blockchain creates a digital ledger, and it’s possible to track ownership very securely.

Imagine games offering one-of-a-kind items – very popular items.

People that find or are rewarded these items can be the true owner of the digital asset, able to sell the items very securely. You can potentially have ownership with:

  • Spells
  • Weapons
  • Textures
  • Skins

In this case, the gaming studio will lose some of their power. Ultimately, developers own all of the assets they create. But when ownership is tied to blockchain, the real ownership of the asset will belong to the players.

bitcoin graph

Why Some Games May Be Reluctant to Move to Bitcoin

Bitcoin will eventually become more regulated, allowing for the currency’s volatility to be controlled. You see, Bitcoin’s value changes daily, so a company does gamble with the cryptocurrency from day-to-day.

The company may sell Bitcoin to convert it to cash when prices are $10,000, but what happens if prices drop to $6,000?

Developers risk not being able to pay off their debt or fund their projects.

But, as we see Bitcoin and other digital currencies stabilize, we’ll see larger developers adopting Bitcoin. The benefit of a closed market, like the one that Blizzard has made, is that the value of the token is tied to fiat currency.

Whether a token is worth 70,000 in-game gold or a million in-game gold is no difference.

Tokens are purchased with fiat currency, so $15 is $15. But, $15 worth of a digital currency may be worth $13 tomorrow, causing the developer to lose money.

The adoption of digital currency in gaming will continue to be slow, but regulations are making the idea of accepting digital currency more viable. Even if subscriptions aren’t paid for using Bitcoin, we may start seeing other items and in-game purchases being made with digital currencies, as the risks are lower.

Once an asset is created, there’s a fixed cost of that asset.

Let’s assume that a mount costs $1,000 to create in World of Warcraft due to graphic designer costs. This cost is relatively fixed, so accepting Bitcoin may be an option. Server costs to run the game will change based on subscription numbers and other factors, so there’s a variable cost that puts the company’s finances at-risk given the current fluctuations in digital currency.

bitcoin accepted here

Bitcoin and Transitioning to a Cashless Society

Buying bitcoin to buy games is a smart choice. Ethereum is making a splash, but Bitcoin still has the highest adoption rate compared to other currencies. And for me, it’s best to go with Bitcoin and forget the rest.

Banks, credit cards and even other payment processors, have a lot of control over the purchases you make.

Seriously.

Let’s say that you choose to buy Bitcoin. Many banks are stopping customers from purchasing digital currency using their:

  • Credit card
  • Savings account

One day, financial institutes will be irrelevant. When this happens, Bitcoin will reign supreme.

Why would this benefit you as a gamer or consumer in general?

Well, first off, a cashless society is on the way (check out the next section for more information on this). But, in today’s world, Bitcoin allows for money to be transferred quickly and without the high fees tied to other payment processors.

You can buy digital currency, leaving financial institutes out of the equation, and then transfer this money without losing value in the process. For example, certain payment methods assesses a 2.9% fee (higher for international transactions), plus $0.30 on a transaction. So, for every $100 spent, the seller will really receive $96.8.

Bitcoin doesn’t have these fees.

Sellers won’t need to markup their goods, and buyers will be able to spend less for the same goods they’re purchasing.

wechat pay and alipay

Cashless Societies Are on the Way

Let’s go beyond gaming for just a moment. You can buy Bitcoin today, and you have an actual asset that you own; an asset that has a value. As the world transitions to a cashless society, your digital currency will be of immense value.

Now, if you’re not paying attention, you may be wondering how far ahead we are in the whole cashless society spectrum.

China is a great example.

The country has started to use AliPay and WeChat Pay in major cities. Mobile payments in China are being used by consumers to pay at:

  • Markets
  • Restaurants
  • Shopping malls
  • Convenience stores

Even smaller vendors are making sales using mobile payments. It’s a great time for smaller businesses because they often incur less fees and are able to enjoy higher profits as a result.

This cashless society will start to spread to other countries, too.

Cross-border transactions are also being expanded with AliPay and WeChat. This will allow for payments to be made and accepted outside of China. You’ll also find that the advance of smart devices will push the cashless society further.

You may be able to make payments through your smartwatch or wristband.

It’s exciting.

Even the Shanghai subway has incorporated the two mobile payment options.

AliPay and WeChat account for 93% of all mobile payments in the country, and in the third-quarter of 2017, processed 29.5 trillion yuan, up 300% from the same time a year prior. The market is growing, and consumers are finding the benefit of a cashless society.

bitcoin and dollar

It’s time to start buying digital currency.

You have to remember that digital currencies can now be carried with a hardware wallet, and these small wallets are the size of a USB drive. Mobile access to Bitcoin is also available on many currency exchanges, so if you have an Internet connection, you’ll be able to access your currency from anywhere at any time.

And it’s for this reason that we’re also finding some of the world’s falling economies being heavily invested in.

Let’s look at Turkey for a minute. The country’s depreciation is occurring at a quick rate. Citizens have started to abandoned their fiat currency and buy digital currencies because they are more stable than the fiat currency.

Iran and Venezuela are doing the same.

Black markets exist, and this is very popular in Iran. You’ll find that people are trading their Bitcoin for other currency, often $25,000, while the Bitcoin is worth only $6,500.

Why does this matter?

Well, Bitcoin and digital currencies provide some security to the investor, too. As a gamer, you can stockpile digital currency as an investment, and you can also use this digital currency to purchase games or buy in-game items.

It’s the perfect way to start buying goods, and it’s only going to expand further as payment options continue to expand.

Gamers know that there’s a value in the digital world. Think back to the time when World of Warcraft was at its peak. The Burning Crusade and maybe Wrath of the Lich King were peak times. The game was exploding in popularity, and gold was a lot harder to accumulate than it is in the latest expansion.

Gold, a form of digital currency, was a one-hundred-million-dollar market.

Mobile games, in 2017, generated $59.2 billion, while PC games generated some $33 billion. The rise of mobile technology and gaming has already started to generate digital currency buzz. GMO, a company that offers games, has introduced an app that allows players to begin to earn Bitcoins.

This outside-of-the-box thinking allows CryptoChips to reward Bitcoins to players.

It’s a change in the industry that also opens up a world of potential. Decentralized, digital currency, outside of closed markets, offer the potential for a universal currency to purchase goods. Australians, who are known for paying double the price for games, may be able to purchase games with digital currency for the same price the rest of the world is paying.

It will make the lives of developers easier, too – not having to worry about currency exchanges for every country.

Digital currencies also secure a lot of investment as more startups and entrepreneurs work on finding new and exciting ways to use digital currency and the underlying blockchain technology. Even if Bitcoin isn’t accepted in games around the world, blockchain will provide advancements in digital asset ownership that have never before been possible.

We’re in an exciting time as gamers.

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