NIFTY Hong Kong Takeaway: “Why Blockchain Games Are Trending.”
Non-fungible token and the future of blockchain gaming
During the NIFTY Hong Kong conference and hackathon which took place on July 24 to 26, Portal Network delivered a speech and held a workshop about NFTs (non-fungible tokens). It was one of the first conferences focusing on NFTs and blockchain gaming, and we were honored to meet many amazing DApp developers like Decentraland, CryptoKitties, Ethermon, Etherbots, and more.
In this article, we will discuss some of the newest developments in blockchain gaming, as well as explore some of the leading companies in this field, such as Kenetic Capital, Decentraland, CryptoKitties, and of course, Portal Network.
Kenetic Capital: A pioneer in blockchain
Firstly, we would like to thank Kenetic Capital for providing such a great opportunity to discover and learn more about both blockchain games and DApp developers. As a company that is dedicated to connecting and enhancing blockchain technologies, it was truly exciting for us to witness promising developments that will help lead this industry into a brighter future.
In fact, many of our objectives are inspired by the value Kenetic Capital possesses, such as expanding the development and user adoption of blockchain technology. As such, we believe that a high-quality event like NIFTY is a proactive and healthy way to grow the blockchain community.
CryptoKitties: The beginning of ERC-721 and blockchain gaming
Last year in December, the Ethereum network became overloaded. Transactions skyrocketed by 10 to 20 times average, with most of the network’s transactions attributed to the same smart contract DApp: CryptoKitties. Its creation marked the start of a whole new era in blockchain gaming.
At its peak, the number of daily active users (DAU) of CryptoKitties was around 9,700. Amazingly, the highest price a single kitty was traded at was 140,000 USD. Due to the unprecedented success CryptoKitties achieved, it became the POC (proof of concept) that showed the potential of blockchain gaming, and eventually led to the establishment of the ERC-721 standard.
So what’s special about blockchain games?
One characteristic that differentiates blockchain games from traditional games is that by utilizing the ERC-721 (or NFT) standard, players can actually retain ownership of their in-game items. In traditional games, including online, mobile, PS4, Nintendo, and so on, all of the in-game characters, items, and weapons are controlled by the game’s company and developers. Consequently, players often find that their in-game items have no value in the real world. This is exemplified by the fact that traditional game companies have the ultimate power to change and delete everything entirely if they choose to do so. In such a case, players’ in-game items would be rendered completely void.
The second distinguishing characteristic is that blockchain game items are much more liquid than traditional game items. While traditional game items can only be traded once you are connected to the game server, blockchain game items are stored “on-chain,” so are accessible through any supported wallets. The implications is that trades are possible anywhere, anytime.
This leads us to the third characteristic blockchain games possess: the same game items can be reused in different games. Since all of the in-game items (that is, the ERC-721 tokens) a player owns are stored at a blockchain address, players have full access to the in-game items they own — even those from different games. For instance, CryptoCuddles uses the same cats that are in CryptoKitties. So once a player accesses their CryptoCuddles with their wallet address, all of the cats owned under that wallet will automatically become available in CryptoCuddles as well, making it possible for the players to battle their CryptoKitties.
Digital assets that have specific ownership in a decentralized network and could be traded anytime, anywhere. This creates unimaginable potential in blockchain gaming.
Breaking the limit of ERC-721… Introducing ERC-998 and ERC-1155
ERC-721 has successfully made its debut in blockchain gaming, yet just like any other ERC token standard, it faces some limitations due to its design. During NIFTY, we encountered two interesting topics related to ERC-998 and ERC-1155 tokens which could potentially break the limits.
ERC-998
ERC-998, also known as “Composable Non-Fungible Token (CNFT),” is a concept that was proposed by Matt Lockyer on April 15 this year. Simply put, it’s a standard extension that allows any NFT to own another NFT or ERC-20 token. So when transferring a CNFT, it is to transfer the entire hierarchical structure and ownership of CNFT.
For instance, a CryptoKitty may own several elements in the game like “cat biscuits” or “cat costumes”. A cat biscuit is an ERC-20 token, whereas a cat costume is an ERC-721 token. As a CryptoKitty owner, you would probably want to give some biscuits and put some clothes on your cat, but under the current ERC-721 standard, it is hard to reflect this ownership. ERC-998 aims to solve this problem.
ERC-1155
ERC-1155 enables the bundling of complex transactions and the creation of fungible, semi-fungible, and non-fungible tokens using a single set of smart contracts. The efficient and flexible design is truly a gospel for gaming enthusiasts. This is why many people are praising ERC-1155 as the evolution of token standards that will replace both ERC-20 and ERC-721.
At their current stages, both ERC-20 and ERC-721 are inconvenient for trading items in-game due to space limits. They are only suitable for games with a few items, which limits their application in games with hundreds or thousands of items.
Proposed by Enjin’s CTO, Witek Radomski, ERC-1155 uses a central smart contract to define tokens, which is where the items are stored and distinguished from each other. The entire process only uses up a minimal amount of space, which solves the inconvenience that ERC-20 and ERC-721 are currently facing with item trading. With ERC-1155, players no longer need to partake in lengthy in-game transaction procedures.
The introduction of these two token standards has made the development of more complex games possible, therein creating unimaginable potential in blockchain gaming. One of the standout blockchain games is Decentraland.
Decentraland and the future of blockchain gaming
Decentraland is a 3D virtual reality platform where players can purchase plots of land to traverse, build upon, and monetize. Players can do whatever they wish to do once they own land, without any limits. Imagine a virtual reality with a marketplace, school, stadium, and amusement park. The experiences that it can bring will be beyond anyone’s imagination.
To give you a better idea, perhaps you’ve heard of the novel/movie “Ready Player One.” It centers on a virtual world called OASIS, where people can do anything — literally anything. The reason we bring it up is because together with some promising token standards like ERC-721, ERC-998, and ERC-1155, Decentraland could potentially be an “alternative life” akin to OASIS, where experience, business, and lifestyle can flourish freely.
Back to Portal Network…
Introducing our first blockchain game: Big and Small
For NIFTY, our developers developed a web-based card game powered by blockchain and NFT. Called Big and Small, it is fully functional on IPFS, meaning that it is 100% decentralized. If you haven’t read about the game, we invite you to read its introduction and tutorial.
While Portal Network is not a game company, there are several reasons behind the development of Big and Small.
To list a few…
Big and Small was more of a proof of concept to show both the possibilities and limitations that lie ahead with this type of technology. We have successfully deployed the entire game on IPFS, and it is fully functional on the Ropsten Test Network.
Secondly, it is a preview of one of our future products — KAIZEN, which is a tool for DApp development. As we are dedicated to closing the gap on blockchain usage for everyone, KAIZEN will be a developer-friendly product and tool for building DApps. Big and Small is a game built on one of these frameworks (N.B. we will release more information regarding KAIZEN shortly).
Both the ERC-998 and ERC-1155 token standards are relatively new. From a technical perspective, these new token standards could indeed be a huge leap forward in blockchain gaming, so it will be interesting to watch closely on the future path the blockchain community will take.
If you are interested in the game we developed, don’t hesitate to play it now! We welcome you to give us any comments or feedback! Thanks for reading!
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