Experience Cryptocurrencies in Video Games
In this article, I will talk about cryptocurrencies and how they can be used in games. I’ll shortly introduce what they are, for people that were unaware about them before reading this article. Then I’ll get to why they are interesting compared to virtual currencies and how we can use them in the video game industry!
I’m only going to talk about the currencies themselves. Blockchains (which I’ll talk about quickly) can be a great way to secure and decentralize many things. It could be interesting in video games but that a whole other subject, for another time.
What is a Cryptocurrency?
“A cryptocurrency (or crypto currency) is a digital asset designed to work as a medium of exchange using cryptography to secure the transactions and to control the creation of additional units of the currency. Cryptocurrencies are a subset of alternative currencies, or specifically of digital currencies.”
— Says Wikipedia. If you’ve heard about one, it’s certainly the Bitcoin. Bitcoin has been around since 2009. It’s the first decentralized cryptocurrency and has been growing ever since, to the point where even my grandparents have heard about it.
Most cryptocurrencies are decentralized, meaning that there is no fixed organization controlling the currency. Transactions and value of these cryptocurrencies depends on the network of people using and mining them.
As Bitcoin is the biggest one, I will shortly talk about how it works. Every cryptocurrency is different but many of them have similarities to Bitcoin.
The Bitcoin network works with a blockchain. It’s a linear succession of blocks that are publicly available to everyone on the network. Each block contains a short summary of the previous one, digital signatures for previous transactions, a list of the last transactions on the network and the answer to a math problem. Blocks are created one by one. To create one, people on the network (called miners) are doing some work. They use their computers / GPU / Mining hardware to calculate the answer to a math problem. The difficulty of this problem is defined by the blocks creation speed. It means that the network automatically defines the difficulty of the problem! This process allows miners to verify the transaction.
Everything is checked and validated by the majority: more than 50% of the miners must agree on a transaction to verify it and include it in a block. When someone finds a solution to the problem (there are multiple ones and they are easy to verify once they are found), a block is created and added to the blockchain. The miner that found the solution gains some bitcoin (~12 on the network today) and miners that verified transactions earn a small amount from transactions fees. The whole system is made to push more people to mine, making the network more secure as there are more people verifying transactions.
“But what is interesting about a cryptocurrency? For video games, a virtual currency is enough, right?”
Why Cryptocurrencies are interesting compared to virtual currencies?
Right, while both have pros and cons, the main differences I will talk about are decentralization and two-way usage.
In a game, you get or buy a virtual currency so you can spend things with it. We may give you some of it for free, but it’ll always stay inside the game’s ecosystem.
Virtual currencies are everywhere, in every mobile game or even F2Ps on any platform. The value of those currencies is fixed by the developer, limited to the games/applications of this developer and is mainly a layer of abstraction that pushes players to invest more.
There are some virtual currencies that try to unify values between multiple games like the zGold/zSilver from Razer, however the main problem of virtual currencies is still there. They only are one way currencies. In a game, you get or buy a virtual currency so you can spend things with it. We may give you some of it for free, but it’ll always stay in the game ecosystem.
As the currency system is controlled by someone, it’s in their interest to make it one way. They can change the value of the currency depending on the country. They can make promotions on them without losing any money. There is no investment as they create the money virtually when someone wants it and it’s “destroyed” when the user spends it.
— So, what’s the problem? It’s great for developers, right? Why bother with something else?
Indeed, virtual currencies have little cons from the distributor part. A while ago, putting something like a virtual money in place was not that easy. You had to manage the transaction part from real money to your virtual one for example. But there are tons of tools that do all the hard work for you nowadays.
Changing that system for Cryptocurrencies is interesting if you look at the user part of the equation.
Many benefits come directly from the nature of cryptocurrencies: It can be anonymous. It’s safe by the nature of blockchains, everything is logged, verifiable and can’t be compromised. It can work with many games or other things as it’s not blocked into a proprietary ecosystem. It’s decentralized, meaning your service is never down. Currency’s value can change for best or for worst. You are not dependent of a distributor. And finally, the currency can be a two-way currency.
— Wait a second, we already have two-way currencies in the digital world. It’s just digital currencies.
We had some that were created and we have some that are just digital versions of the “real” ones. Remember E-gold? Or just using PayPal with digital versions of any currencies like USD/EUR? Why not use directly that?
It’s two-way too, AND as safe: the rest of the world uses them for any type of digital transaction.
Yes, these options are available. But we don’t use them inside game systems for many reasons. First, they are linked to economic situations that are unrelated to the digital world. They are dependent of banks, countries, inflation and politics (say hi to new taxes and regulations!).
Moreover, if we created virtual currencies, it’s also because it creates a common layer of pricing inside digital systems. Unlocking a new skin for a spoon in a game about spoon, is it worth 0.20€, $0.223, 24.9 JPY, 13.3 RUB? It’s easier for users to have it worth 10. 10 Units that are defined, that can be changed to 7.5 or 5 units at Christmas. A virtual currency makes you able to give your user some units, not even caring about his location, the fees that could come from converting and giving him money.
And there we are with cryptocurrencies. Currencies that are a great layer of abstraction, while being two-way between them and other currencies. But you’ll see why they can be a huge part of the future of video games in the next part.
What can we do with Cryptocurrencies in games?
Some games started using cryptocurrencies like the Game Credits. They offer to use it like virtual currencies, but with the possibility to sell it back, use it in many other games and have the value of those credits change with the market. A specific cryptocurrency for games is great as it makes it less probable to have fluctuations coming from things unrelated to games. Even if one/multiple games can make the currency move a lot, this is less risky than using more common cryptocurrencies.
At IronEqual we started playing around with the Dogecoin. The main reason being that it’s a relatively known currency and has a value that is low enough to serve as a great layer of abstraction (1€ = 340+ Dogecoins). More than that, there is already many places where you can buy and sell Dogecoins. Finally, we like the name Dogecoin.
Introducing DODGECOIN, a game with Dogecoins
Aside using it for selling virtual things like skins, characters or DLCs, we decided to use cryptocurrency as a reward.
Our first try at it is DODGECOIN, a simple game where you need to survive by dodging enemies for as long as you can.
Simple right? But we give you 1 Dogecoin per seconds survived at the end of the game. You can make a withdrawal every 12h (you decide if you want cash your score out when you die or if you want to try one more time to get a better score, thus a better reward). That is 0.002935€. Not much, but you can keep it, sell it when you have more Dogecoins or use it to buy something! You can also buy more to get upgrades faster like with classic virtual currencies or bet some online or to a friend. After all, it’s not that expensive, and you may even have hundreds for free while playing! A Reward that can be used, not only in your game but for many things. In short, you can do everything you did with Virtual Currencies and you also have many new possibilities.
Our idea is to go for a public amount available. When you start the game, we tell you if we still have Dogecoins or not. We bought them as part of the “marketing” cost of the game (around 10–15€, we’re not THAT flushed). Our goal by adding cryptocurrencies in games is not to make bad games that are only played to earn money, but to create meaningful rewards in already enjoyable games.
If you like playing DODGECOIN, and would love to see more games using cryptocurrencies in their design, please tell us, we’d be happy to be make more.