By this year, GameFi was becoming more and more popular. Not only were there new projects and utilities, but the value of the cryptocurrency market was also increasing. As per the data from CoinMarketCap, the total cryptocurrency market capitalization as of October 2022 was more than $900 billion.
We could always find something fun to do on GameFi, and the P2E and NFT games gave us a way to make money without doing much work. Even though blockchain games are just a part of the global gaming and cryptocurrency industries, there is a lot of growth potential in the sector that hasn’t been used yet.
Today, we’ll talk about everything you need to know to understand how GameFi uses a variety of digital assets.
Before going any further in topic, it is important that you Understand GameFi’s features and processes.
Most of the time, you have to pay a fee to play or advance in traditional video games. This can come in the form of buying character skins and traits or the console you need to play the game. If you stop playing, all of your items will either be deleted or become the property of the game developer.
GameFi can change how ownership works in a gaming ecosystem by using non-fungible tokens (NFTs) and crypto tokens. Here, players can buy in-game NFTs to get characters and skins. Since NFTs are proof of ownership, they can be bought and sold just like any other asset.
The assets that have been gathered can be traded or turned into fiat currency. You can also use it in many different ways, like upgrading the NFT characters or participating in the governance system.
Learning the basics of GameFi is not enough when you don’t clearly understand the Advantages and Disadvantages of GameFi
We have gathered these interesting GameFi projects that you should check out! Have fun exploring which game fits you the most!
GameFi and blockchain technology
Blockchain, a decentralized ledger, is integral to how cryptocurrency works. Every peer can use and access the record database in the network. It not only keeps track of every transaction that has ever happened, but it also keeps track of how much money is in each account.
When you use a fiat currency, like the US dollar, the banks, and the government control both how much money there is and how much it is worth. Banks and governments can keep an eye on how you spend your money. For example, they can freeze your accounts or refuse to deny payments.
The value of a currency can go down if the government prints more of it. The interest rates can also be changed by the government. In the world of cryptocurrencies, governments and banks don’t have any power. The prices on the crypto market will only change when a large number of users buy or sell a lot of coins.
No matter if the transaction were bought or sold, it would be recorded in the history of the blockchain. This is just one of the many benefits of using blockchain technology. Moreover, anyone with access to the internet can see every single transaction that happens on the platform.
Dive more into this topic by checking out this article called: A comprehensive guide to blockchain and its uses
Altcoins, and tokens in GameFi
With blockchain technology, developers can make almost anything they can think of. Thus, it is not hard to see how technology like blockchain could help the gaming industry, particularly GameFi.
GameFi works with a number of different digital assets. There are so many different cryptocurrencies, altcoins, and crypto tokens that it would be hard to list them all. The most popular one is Bitcoin. Here’s how they run their network:
Let’s say you sent someone 10 Bitcoins. You need to use your private key to make sure that the transaction is legitimate.
- The agreement then needs to be verified. At this point, “miners” comes into play. Miners are in charge of making sure that financial transactions are legitimate.
- Miners must solve complex cryptographic puzzles for transactions to be verified. They will be paid in cryptocurrency if they meet the requirements.
- When a new block is added to the chain, a transaction record is sent to each peer in the network so that everyone can keep track of it.
- Once a miner has confirmed that a transaction is legitimate, it is added to the blockchain, where it will be recorded forever.
Is there a difference between cryptocurrencies, altcoins, and tokens?
To start, cryptocurrency is a decentralized digital currency. When something is decentralized, no one person or group is in charge of the supply. Thus, neither banks nor governments have the power to raise or lower the value of money or limit the accessible amount.
Even though many people use the names cryptocurrencies, altcoins, and tokens interchangeably, they are all different in significant ways. Generally speaking, cryptocurrencies can be put into one of these two groups:
- Coins that may or may not contain Bitcoin
- Tokens that can be programmed and exist in a platform’s blockchain
What is a crypto token?
Crypto tokens are strings of code that can be used to represent different objects, ideas, or projects. They are made to work in many different ways and can have various values.
Also, unlike cryptocurrencies, which often have their own blockchain, tokens are made within the blockchain of a coin that already exists. Most of the time, tokens are made and given out through an initial coin offering (ICO). This is similar to how stocks are sold through an initial public offering (IPO).
What is an altcoin?
Alternate cryptocurrencies, also called altcoins, are digital currencies that are not Bitcoin. Litecoin, Ethereum, and USD Coin are all examples of other cryptocurrencies. Most of the altcoins were made to make Bitcoin better in some way.
Even though most of the other cryptocurrencies are built on the same basic structure as Bitcoin, each has some features that make it different. Some might have benefits like less price volatility, while others might have features like smart contracts. Some people may also offer both.
How are altcoins and crypto tokens used in GameFi?
People who play video games and are interested in cryptocurrencies have a lot in common. Most gamers want to monetize their gameplay, while some crypto enthusiasts like playing games. Thus, game developers and investors managed to find to create a win-win situation where in-game items can now be bought with cryptocurrencies to monetize gaming.
Here are some of the ways how altcoins and crypto tokens are used for GameFi:
Transferring things from one game to another
Game developers don’t just make games; they also make it possible to move assets from one game to another. This makes it possible to get a weapon in one game and use it in more than one game. Let’s say that one game developer makes two different MMORPGs (MMORPGs). The developers could make items that can be used for both games.
Incentives for uses
In most P2E games, players who make progress are rewarded with tokens. GameFi’s developers and investors are coming up with more and more creative ways to use blockchain technology and cryptocurrencies to their fullest potential. This makes the game better as a whole and lets the developers add a wide range of upgrades that can be bought with the game’s currency.
We wrote an in-depth article about this and it includes Everything you need to know about GameFi tokenomics
Do you want to become a GameFi investor or player?
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Enter as a P2E gamer
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We have informative tutorials, GameFi project collaborations, Web3 events and more in Play It Forward DAO’s Youtube channel and/or visit Railings University’s Facebook page and find out more info about the guild.
Enter as a GameFi token investor
When you become a PIF token holder, your digital assets will be involved into limitless earning opportunities as we continuously grow more GameFi partnerships and investments moving forward. Jump into your exciting GameFi journey by joining Play It Forward DAO’s Telegram and Discord channels.