What Is Crypto Gaming? An Introduction to the World of Blockchain-Based Games

The gaming industry has been attracting players, developers and investors for decades now. Games were there to help players through the long hours of quarantine when the COVID-19 pandemic hit and kept on rising even when that period ended. Recent years also brought the rise of a new type of gaming called crypto gaming.

The global crypto gaming market size was valued at $3.3 billion in 2020 and is expected to reach $9.3 billion by 2027, growing at a compound annual growth rate (CAGR) of 16.4% from 2020 to 2027. Even though the crypto market is quite volatile, the crypto gaming industry is increasing in popularity.

A crypto game is any game that is built on blockchain and features crypto elements, like NFTs or tokens. Players need to be familiar with cryptocurrency to be able to play, and they need to own some coins as well. Crypto games allow players to purchase assets and later sell them to earn cryptocurrency.

But what is crypto gaming? How to start with crypto gaming, and is it your cup of tea? Read on to find out.

Crypto Gaming Origins

Jonathan Archer

One of the first known crypto games, or a game that used blockchain technology, was CryptoKitties. It was launched in 2017 by Axiom Zen, and it allowed players to purchase NFTs (non-fungible tokens) in the shape of virtual pets with Ethereum. Players could collect and breed digital cats and even sell them! The game became very popular, especially with players from China.

Axie Infinity is another NFT-based game that was released in 2018. It is a “play-to-earn” game, a concept that will later become popular for crypto games, and it means that players purchase NFTs, upgrade them in the game, and then receive compensation when the publisher (in this case Sky Mavis) sells them to another player.

The next breakthrough in the world of crypto gaming didn’t happen until the COVID-19 pandemic when players turned to video games in the months of quarantine, which resulted in an increased interest in metaverse content and crypto games. In 2021, Valve Corporation banned blockchain games from their platform, but many major game publishers started to consider blockchain and NFT-based games for the future, leading to the market we have today.

What Is Crypto Gaming?

To explain the concept of crypto gaming, we should explain the basics first. As you may already know, cryptocurrency is a digital currency that is stored in digital wallets and doesn’t need banks or any other authority to verify transactions. Cryptocurrency uses cryptography to protect and verify all transactions, meaning that all crypto transactions are secured by a strong encryption system. 

The records of all crypto transactions can be found in digital ledgers that also use encryption techniques for safety.

Cryptocurrency is stored in crypto or blockchain wallets that you need to link with a crypto game when you wish to play or to any other entity where you need to make a cryptocurrency transaction. Some of the most popular wallets are Coinbase, MetaMask, Exodus, and Guarda, and these are the so-called hot wallets, as they are connected to the Internet.

Blockchain is a ledger or distributed database that stores records of crypto transactions in blocks that can’t be altered once the data is saved. Blockchain technology is also based on top-notch encryption to ensure the safety of data.

We have already mentioned NFTs as non-fungible tokens, but what are NFTs really? An NFT is a digital asset that usually comes in the form of an image, GIF, video, or meme. It is stored in a digital wallet or on the blockchain with proof of ownership. The owner can send their NFTs and get some cryptocurrency for them.

All these terms are important to understand the concept of crypto gaming. Players use cryptocurrency and NFTs to make in-game purchases in crypto games and obtain assets they can later exchange for real money when they sell their cryptocurrency. This is called the play-to-earn concept in crypto gaming. Crypto games are built on blockchain, and the most popular crypto gaming platforms are Ethereum, Tron, and EOS.

Some crypto-gaming platforms offer the possibility to use cryptocurrency to play online casino games. The number of crypto casinos is constantly growing, and we now have casinos that accept cryptocurrency as the main currency for gambling, like BitStarz or 7BitCasino. Are crypto casinos legal, you may wonder? Yes, all licenced crypto casinos are completely legal, so make sure to check the casino website for licencing details before playing.

How Do Crypto Games Work?

Crypto games are built on blockchain technology, making them secure and practically unhackable. Crypto games are very similar to regular games. They are similarly designed, players have their missions and quests, and we even have crypto gaming influencers that regularly stream and post on YouTube.

The difference between conventional and crypto games is that players typically need to purchase some assets to begin playing a crypto game. To do that, you need to connect your crypto wallet with the game. Once you have entered the game, you can create your own NFTs, upgrade them, and later sell them and earn some cryptocurrency.

Is Crypto Gaming Gambling?

Crypto gaming is not gambling, even though some argue that it is very similar because players need to buy their way into the game and could make a profit when selling their assets. Crypto games are played like conventional games, apart from the players having to purchase their tokens and having actual ownership of them throughout the game. However, crypto casinos do exist, and it is possible to gamble using cryptocurrency.

Play to Earn Concept Explained

Play-to earn concept is the thing that separates crypto gaming from regular, traditional gaming because it allows players to earn some cryptocurrency in the game. They can do that by completing certain quests in the game and receiving awards in tokens and cryptocurrency or by winning awards in virtual tournaments.

Players can also purchase certain tokens or NFTs in the game, upgrade them like the virtual pets in the CryptoKitties game, and later sell them for a higher price and earn cryptocurrency. If a game becomes popular over time, players who bought their tokens early on can sell them at a much higher price than they bought them in the first place.

Cryptocurrency can later be used to make some purchases inside or outside of crypto gaming or redeemed for real money. That is how you get to play a crypto game and earn at the same time. If you are still thinking about how to start with crypto gaming, perhaps a good first step would be to pick the right game for the cryptocurrency that you prefer.

Types of Crypto Games

Crypto games are built on blockchain technology that allows players to make in-game purchases and obtain NFTs or other digital assets they can later sell or redeem. There are many crypto games in the market nowadays, starting from the earliest titles, like CryptoKitties, so let’s mention a few of the most popular ones.

Alien Worlds is one of the most popular crypto games. It allows players to choose one of the six worlds and get three mining NFT tools to mine Trillium, the cryptocurrency in this game. Players can mine on the plots owned by other players, or they can battle with them to claim their territory. They can also join other players to create alliances. Game NFTs include minions, avatars, tools and weapons.

Another popular crypto game is Axie Infinity. Axie Infinity is the first Ethereum game that reached over $1 billion in sales. It is a game where users create creatures called Axies, and they can collect them or use them to fight other Axies in both real and adventure modes and receive Axie Infinity tokens.

Among the best crypto games is also Decentraland, a 3D virtual game where players can buy land and explore it using MANA cryptocurrency, built on the Ethereum blockchain. Players create their avatars to explore the land, and they can buy and sell estate wearables and other NFT goods.

Some popular casino crypto games include Sweet Bonanza Slot, Mine Field Slot, Skyliner, or Penalty Shoot-Out Slot. 

Who Plays Crypto Games

Crypto games attract gamers looking to try a new gaming experience besides regular gaming. Some statistics indicate that the largest group of players are millennials, but players of all ages enjoy playing crypto games. Crypto gamers hold cryptocurrency they use to purchase tokens in the games.

Of course, crypto games also appeal to those looking to make some money while gaming. Buying and selling NFTs and other assets can bring substantial profit to players in popular games where tokens are valued at a pretty high price. People trying to earn from crypto games are not necessarily gamers but simply people looking for a chance to make money.

Benefits of Crypto Gaming

Crypto gaming is undoubtedly becoming increasingly popular, and players usually choose them because of all the benefits they bring. We have already mentioned some of them, but it doesn’t hurt to list them all in one place:

• Secured Environment: Strong encryption and additional layers of security protect all digital assets and transactions, making blockchain a very safe technology for all users. All game data is encrypted and safe from hacking or social engineering attacks.
• Easy and swift transactions: Cryptocurrency transactions are safe and cannot be duplicated. The NFTs players use in the games are also safe, have clear ownership details,  and can’t be stolen from digital wallets.
• Immersive experience: Players can create their own characters and avatars in crypto games and choose their storylines. They can also control their gaming experience by purchasing and selling digital assets whenever they want.
• Play and earn: As we already mentioned, crypto games give players the opportunity to earn digital currency they can later exchange for real money.
• Rewards system: – Crypto gaming truly motivates you to play by providing you with enticing cryptocurrency rewards after completing game missions.

Risks of Crypto Gaming

When talking about the risks of crypto gaming, we talk about the challenges, especially when compared to regular gaming. Crypto gaming is still a relatively new area in the industry, but it is evolving quickly. Here are some of the challenges that crypto gaming brings:

• Complexity: It is a little more complex to join a crypto game than a regular one. Besides the regular process of accessing a game, players need to connect their crypto wallet to the game and obtain enough cryptocurrency to start. To do that, you need to be familiar with blockchain and cryptocurrency and how it all works. If you are playing to earn, you should be careful and mind the prices of your tokens, as they can be volatile even in the best crypto games, depending on their popularity and many other factors.
• Competition: – Crypto games developers will have a hard time catching up to companies that have been developing regular games for a long time now and who have a head start. Companies will also need to find innovative ways to attract gamers who are used to playing traditional games and might not be willing to switch.
• Regulatory hustles: The field of cryptocurrency is still relatively unregulated as authorities and regulatory bodies are still evaluating the use of cryptocurrency in gaming.

The Future of Crypto Gaming

It seems that the future of crypto gaming has already started, and the industry has the potential to compete with the traditional gaming industry. Web 3 gaming, a system where games are based on a decentralised blockchain, is considered the future of the gaming ecosystem, which is supported by all the investing in crypto gaming.

According to DappRadar, Web3 Gaming and Metaverse projects raised $7.6 billion in 2022, which was a 59% increase compared to 2021. Also, investments in metaverse projects and blockchain games reached $421 million in April 2023.

Web 3 and metaverse projects will allow for more games to be built on blockchain technology, which will allow the gaming industry to reach a whole new level. Using cryptocurrency in games and buying and selling NFTs allow players to earn cryptocurrency they can redeem for real money, and some platforms don’t want to host those kinds of games. However, plenty of platforms have joined the crypto community, opening up a world of opportunities for crypto game developers.

Crypto is also entering the world of esports and esports betting, and one of the most popular examples of crypto esports games is definitely Axies Infinity, with players’ little monsters combating for victory and some tokens.

Crypto gaming provides a new gaming experience for players, and it is here to stay. Cryptocurrency, NFTs, crypto wallets, game tokens, crypto gaming guilds and other assets are finding their way into the gaming industry, and we can’t wait to see what happens next in the world of crypto gaming.