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Lumi Wallet Blog

What they don’t tell you when you play a crypto game pt. 2

In our previous article we talked about the problem of inherent validity with crypto collectibles, but the problem with crypto collectibles doesn’t only lie within themselves, but also outside, on the network and with the users of the games themselves.

The idea that is incorporated into crypto games is that in order to play the game, you must purchase something; the rarer the purchase, the more it costs. In games such as CryptoKitties, CryptoPunks, and EtherQuest which involve crypto collectibles, the most rare are the Gen0 creatures, and owning one could bring you a ton of Ether and in turn, money. But how do you get one?

Well new Gen0 creatures are usually released on a predetermined schedule whether it be every 15 minutes, every 3 months, or simply just a one time offer. So why does this pose a problem? Well, have you ever heard of insider trading on Wall Street? It’s where investors know in which direction a stock will go and when, then they can buy or sell that stock accordingly, giving them an unfair advantage and making them lots of money.

Well we can apply this to the sale of these Gen0 creatures. Technically, anyone and everyone has the ability to snatch up a Gen0 creature, but many crypto game enthusiasts have voiced their concerns over the fact that the creators of the creatures know which ones are being released and when. This creates the problem of if the creators want a few to themselves, they have the option of knowing which one they want beforehand and snatching them up right away, and this isn’t fair if there are only a few being released or if there are only a few rare ones.

As soon as these rare creatures are bought or snatched up, they get more expensive in price, and that is another main concern about playing a crypto game: the price of playing. The inherent nature of every crypto game is that they are pay to play; the user must buy something to play the game. The pay to play aspect has been a well-criticized facet of crypto games because it favors the early users and not users who best play the game. At their inception, many games come off as poorly disguised ponzi schemes, get-rich-quick plans that reward early investors and don’t focus on game mechanics and playability.

Lots of new crypto games are coming out each offering their own supposed “unique” asset in the form of a ERC-271 token, which makes the asset non-fungible, only to be traded for Ether — the native coin of the Ethereum network. Since all crypto games are executed on the Ethereum network, this clogs it, causing the price of each transaction to increase. Currently, the Ethereum network has a limit of 15 transactions per second and as more and more users become interested in these crypto games and start playing them, this poses a capacity problem for the Ethereum network, the effects of which are already being seen.

A quick overview: when you want to carry out a transaction on the Ethereum network, you need to pay for it and you pay in Gas which is calculated in Ether (ETH). This transaction fee is paid to miners who mine your transaction and add it to the blockchain. Gas is calculated by gas limit * gas price. Gas limit is the maximum amount of units of gas you’re willing to pay for a transaction and gas price is the price of a unit of gas. You can increase and decrease the price of these units to dictate how fast your transaction gets mined. The higher the fee, the faster your transaction goes (and if the fee is too small your transaction might get stuck unverified forever).

In November 2017, Etherscan reported a sixfold increase in pending transactions because of the new crypto collectible phenomenon, CryptoKitties, which drove the price of transactions up. This again ties into the pay to play function; the more you’re willing to pay to carry out a transaction, the more likely you are to successfully acquire a rare collectible. And as more players join, the network becomes more and more inundated with transaction requests, causing the price of transactions to considerably increase. Many users have commented on this fact and discussed how it isn’t fair to players who enter the game later and as they spend more money, because the games rewards early investors.

And this doesn’t only affect game players, but also other users using Ether in different ways that don’t relate to crypto games. A lot of traffic on the Ethereum network due to crypto games drives up the price of transactions not only for those games but also for people using the network for cryptocurrency uses, business uses, and anything else unrelated to crypto games. This presents a problem for Ethereum because it’s going to scare off any other potential investors because of network congestion.

So how do we fix these problems?

Well, first and foremost, games should build an algorithm that, from time to time, releases a randomly generated number of Gen0 unique creatures on a randomly selected date, allowing anyone and everyone to snatch them up. In this case, even the developers wouldn’t know which ones will be released or when. This would solve the problem of who gets the Gen0 creatures, because everyone will have an equal and random chance.

With the pay to play aspect, early adopters are rewarded, and not those with actual skill. What would be better is to create some kind of hybrid, where you can pay to play but also play to get paid, winning rare crypto collectibles for reaching certain achievements in the game.

One of the most glaring problems though, is that of scalability. The Ethereum network, at this time, is having trouble handling all of the traffic it already receives. As the world of crypto games grows, if Ethereum doesn’t grow with it, the network will be crippled. This problem could be solved by Ethereum adjusting their network to handle a higher traffic volume, but that also comes with its own problems. BitcoinCash, the hard fork of Bitcoin, increased their block size fourfold in May 2018. But this has lead to the criticism that operating full nodes becomes more expensive which leads to less decentralization.

Because blockchain is relatively new, the problems seem endless, but so do the uses. Despite many problems, users still enjoy playing crypto games, as proven by the steady increase of users and those who are interested. Fixing even just one of these issues could sincerely increase the popularity and usage of crypto games, and many users are hoping these problems are addressed soon to increase the enjoyability of playing crypto games. While they do need some work, crypto games have a huge potential to allow people to enjoy playing computer games while earning money, and who wouldn’t want that?

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