Everything You Need to Use Blockchain Games Effectively

If you play games and follow gaming trends, you might have come across the phrase blockchain games. If you haven’t, then you just might be missing out on the next big trend in internet culture!

The technology behind blockchain games has been deemed as one of the enabling technologies that will drive Web3 along with AI, Machine Learning, the Semantic Web, and others.

Sounds like a lot of geeky stuff doesn’t it?

Well, it is!

Not to worry, I put this article together to shed more light on this subject. Some people look at blockchain games as just games, but there’s a little more to them than that.

There are certain things you need to know before you can start playing blockchain games, as there is a lot of stuff going on that may confuse or frustrate regular gamers.

I hope after reading this article you will have a better understanding of blockchain games and how they work. And hopefully, it improves your overall gaming experience.

Blockchain Games

Blockchain games are basically games that utilize blockchain technology.

The term “blockchain” is closely associated with bitcoin, as it is the same technology that is used to create a decentralized financial network that is immutable and irreversible. As a cardinal rule in this type of network, all participants in the network should reach a consensus before anything is written on the network.

This implies that there is no central entity that controls the network and there is no single point of failure making the network robust, secure, and above all inclusive.

The immutability and irreversibility of this type of network are what make it so extraordinary. This means no one can stop or undo any transactions within the network. The only way to make changes in the network is to trigger new transactions that everyone should agree on.

Consider this situation: You have been losing in a battle royale game and most of the people you play against have a special type of rare and expensive armor. There are only two ways to get this equipment, either you defeat a gamer who has this armor or buy it in the in-game store.

You opted to go with the latter since efforts to loot it from other players are futile and you have been itching to go back to the elite ranking. With this new armor, you started climbing back through the ranks reaching your previous place in the leaderboards - at least until the next update of the game that is.

Still in a state of euphoria with your string of wins, you did not bother to read the changes that occurred during the update. A massive losing streak made you realize what had happened. The armor that you just purchased hours earlier has been NERFED.

The game underwent an emergency update to address an alleged bug on one of its in-game items. According to the game developer, this particular bug has given players with this item unfair advantages over other players

This update cost you your elite ranking. To make matters worse you spent this week’s grocery allowance on a very expensive armor that is useless right now. Feeling dejected, hopeless and powerless you cry yourself to sleep. “Such a cruel world” was the last word you muttered before you finally shut your swollen eye.

This would have not happened if the game you are playing is a blockchain game. Any changes in the game would have been agreed upon by the entire community of that game.  Moreover, a situation like this would not have arisen in the first place as the community would have quickly noticed the unfair advantage and would have addressed the issue sooner.

To understand how this is possible we need to know how blockchain technology works. Let's make a quick detour and look at the development of blockchain technology and how it came to be used in games.

Blockchain Generations

The first-generation blockchains were used to secure digital currencies such as Bitcoin, Dogecoin, Dashcoin, and others. This technology relies heavily on cryptography - hence the term cryptocurrencies - which was coined to describe the emerging asset class. Its technology was so revolutionary that many believe that it was to become the future of finance.

It was so successful in what it does,  the crypto community began thinking of ways to utilize blockchain beyond creating digital currencies. One of which was Vitalik Buterin, a Russian-born Canadian teenager who proposed expanding the capabilities of the bitcoin network.

Viltalik began his journey into cryptocurrencies when he experienced the horrors of centralized organizations when his character in the World Of Warcraft game was suddenly nerfed by Blizzard. Unfortunately, bitcoin developers ignored his idea. Vitalik later led the creation of Ethereum, a new type of blockchain network with the necessary tools to run decentralized applications (dApps).

This marks the beginning of second-generation blockchains. These are blockchains that can run smart contracts (self-executing codes) that are secured by blockchain. Like bitcoin transactions, smart contracts cannot be undone or stopped once triggered.

Ethereum has its own programming language called Solidity and  VM (Ethereum Virtual Machine) that allows it to run dApps. These tools allowed blockchain developers to create both Fungible and Non-Fungible tokens or famously known as (NFTs).

• Fungible tokens are cryptocurrencies such as Ether, USDT, and BNB.
• NFTs on the other hand are digital items like collectibles, avatars, and digital characters.

Ethereum would become the leading smart contract platform having a lion’s share of the relevant dApps in the industry. This is despite its major technological limitations. Ethereum's network is too slow and transaction cost skyrockets whenever the network is congested.

This led to the creation of second-layer blockchains (L2) that would address the scalability problem of Ethereum such as Polygon and Optimism.

These weaknesses also led to the creation of third-generation blockchains that have the same capabilities as Ethereum but are faster and more efficient. They employ different types of distributed network designs and innovative architectures to address Ethereum’s inefficiencies,

Third-gen blockchains include Solana, Binance Smart Chain, Polkadot, Cosmos, Avalanche and others. Due to the popularity of Ethereum, many of these next-gen blockchains designed their blockchains to be compatible with Ethereum dApps making them interoperable.

This means all the decentralized applications written for the Ethereum network will also run on their network utilizing their scalability solutions.

Blockchain games are therefore new types of games where players will have the capacity to “OWN” in-game items and “EARN” digital currencies. This enables them to “FREELY” trade outside of the game’s platform. In effect, in-game items and digital currencies have “Real-World Value” as players can trade them with real money.

Like traditional games, blockchain games reward their players with in-game virtual currencies, loot and badges. But, unlike the former rewards in blockchain games, rewards may hold value outside its platform. It also opens up many opportunities where the gaming community can participate in the development phases of the games.

Types of Tokens In Blockchain Games

The economy of a blockchain game is underpinned by its “Token Economics” commonly called Tokenomics. It pertains to the creation, distribution, and uses of tokens in the blockchain game. Blockchain games may have many token types in the game.

The most common token types are in-game Utility Tokens. These tokens are typically used as the in-game currency to buy upgrades, buffs, equipment, items, characters, etc. These tokens are usually also incentive tokens. Players receive them as rewards for accomplishing certain tasks or reaching a certain rank.

Another type of Token in blockchain games is Governance Token. It is a special type of utility token that empowers holders to decide on the developmental direction of the game. This type of token allows the creation of a decentralized autonomous organization (DAO) in the game.

The last type of token is NFTs (Non-Fungible Tokens). NFTs can be digital cards, in-game items, avatars, badges, passes, digital art, digital identification, or any digital construct that is unique. They can function as incentive tokens that give owners special privileges.

Blockchain games are oftentimes referred to as GameFi, Crypto games, Metaverse games, Decentralized games, and Web3.0 games. They generally refer to any game that utilizes blockchain technology.

To start interacting with blockchain games you need to have your own blockchain wallet. It serves as the common interface when you are accessing the blockchain features of a game. Owning a blockchain wallet is the very first step in your journey in the wonderful world of Blockchain Gaming.

It is therefore highly recommended that you familiarize yourself with using them before you start exploring blockchain games.

Crypto/Blockchain wallets

Blockchain wallet holds the digital tokens you own. They are commonly identified with an alphanumeric address. When blockchain games ask you to “log in” with your wallet, they are referring to your crypto or blockchain wallet.

Don’t worry if you don’t have one. These wallets are available online and are totally free. Just make sure that the wallet you are getting is the correct one. Most blockchain games will provide you with the link where these wallets are found.

The internet is replete with fake wallets, be extra careful with this you might end up getting a fake wallet and lose all your digital assets in the process.

Take note that the developers of the blockchain game will not be held responsible if you lose your digital assets due to the misuse of your blockchain wallet.

The most commonly used blockchain wallet is MetaMask. All the games that are written on Solidity use this wallet. It also supports all EVM-compatible (Ethereum dApps)  blockchains such as Avalanche, Binance Smart Chain, Harmony, Astar, and others.

When creating your wallet make sure you back up your secret recovery phrase or simply secret phrase (an ordered 12-word phrase). This secret phrase will allow you to restore your wallet to different devices or other wallets.

There is absolutely no way to recover your secret phrase once you lose it. You alone are responsible for its safekeeping. It is imperative that you are the only one that knows the secret phrase.

Since it is generally understood that the only one who has access to the wallet is the owner, it can also be used to verify identity or sign transactions. This is why many blockchain games allow users to log in using their blockchain wallet.

Two general types of wallets

There are generally two types of wallets: Custodial and Non-custodial wallets. The former are wallets that you did not create hence you do not know the secret recovery phrase and private keys for these types of wallets. It was created on your behalf by a trusted third party.

These types of wallets act like banks where you surrender custody of your money. You don’t have total and absolute access to your money in banks as they may limit your access for a variety of reasons. In fact, you will have to ask permission from the bank to access your own money.

Non-custodial wallets are wallets that you create yourself like wallets you create using Metamask. These use powerful cryptographic algorithms to secure your wallet. Not even the creator of the wallet will be able to hack your wallet and gain access to your assets.

Once created the creator is the only one that has access to the wallet (not unless he or she will share it with another person), Absolute responsibility falls on the lap of the owner/creator of the wallet.

If for some reason they lose access to their wallet and lose the secret recovery phrase they stand to lose all the digital assets held in that wallet.

Here are some important pointers when using a crypto wallet:

• Never forget to back up your seed phrase (I can’t over-emphasize this enough).
• Wallet Passwords can’t be recovered,  just reset the wallet by restoring it using the Seed phrase.
• Always cut and paste your wallet address, don’t attempt to type them as transactions are irreversible.
• EVM-compatible blockchains have the same address across different blockchains.
• Always make sure that you have enough tokens for gas fees (transaction fees).
• You have the option to increase or decrease transaction fees, higher tees are processed faster,
• All transactions including failed transactions consume gas.
• Not all tokens are included in the list of known tokens in the blockchain wallet, you have to include them manually using its token contract address.
• If you send a token and it does not appear, don't panic. Either you have not manually included the token in your wallet or it is taking some time to arrive.
• You can see all information about transactions and tokens (including token contracts ) in block explorers.
• Make sure you are in the correct “mainnet” network of the blockchain you want to use (TestNet tokens are not real cryptocurrencies and do not hold real value).
• One wallet can have multiple addresses, this is useful if you want to assign different wallet addresses to different games.
• Each wallet address can be recovered with its private key.
• Blockchain wallets can be chrome extensions, desktop applications, or mobile apps.
• There are no limitations in creating wallets. You can always create a new one and move your assets to the new wallet if you think your existing wallet had been compromised.

Take note that the same blockchain wallets you use in blockchain games are the very same wallets multi-billionaires use to hold their own digital assets. Your responsibility in taking care of the security of your wallet should not be taken lightly it's serious business.

Another important topic for new blockchain players should learn about are Blockchain Explorers. Understanding the blockchain explorer is an important skill to learn for a more efficient and safer blockchain gaming experience.

Blockchain Explorers

Blockchain Explorers are blockchain tools where you can monitor the different elements of a certain blockchain network. It will allow you to explore all the activities in the network including the contents of specific wallets. All you need to do is indicate the wallet address.  This is a powerful tool to see what exactly is happening in the network.

Say you have sent someone a token. You can easily check the blockchain using a blockchain explorer if the tokens you sent already arrived at their destination. This is important, especially in disputes where one party might deny receiving or claim to have sent tokens.

Each blockchain has its own blockchain explorer. For Ethereum the most popular blockchain explorer is Etherscan. You can access this blockchain explorer in Metamask or go directly to their website.

Aside from checking transactions and contents of wallets, etherscan allows you to check the identity of each of the tokens by taking note of their Contract address.  Fake tokens abound in the blockchain space. You can compare the contract address from the official pages of the project to ensure what you have is the correct one.

You can also verify contract addresses at Coingecko, one of the leading cryptocurrency data aggregators. This website also allows you to check the current market prices of tokens as well as links to all the token official pages.

Now that we have some idea of how blockchain wallets and blockchain explorer works we turn our attention to learning about Blockchain Exchanges and Markets.

Crypto Exchanges and NFT Markets

Crypto Exchange and NFT Markets are trading venues for various digital assets. They are websites or applications where blockchain gamers can trade their digital assets outside of the gaming platform. Cryptocurrencies or digital currencies are typically traded in Exchanges while NFTs are traded in markets.

NFT Markets can be internal markets or external markets. Internal markets exist in-game while external markets exist outside the blockchain gaming ecosystem. The biggest and most popular NFT market is OpenSea. External markets typically have a bigger population of traders you can offer your NFT. Unlike internal markets where the market size is limited by the population of the game community.

Exchanges trade fungible tokens or cryptocurrencies. There are two types of exchanges: Centralized Exchanges (CEX) or Decentralized exchanges (DEX).

The type of exchange depends on how they handle custody of assets being traded.  When you are using CEX you have to surrender custodianship of your asset.  When you use a DEX you never lose custody of your assets, as you use your Non-custodial wallet to trade.

CEX may have a higher concentration of traders making it an ideal place to sell your game reward tokens. Moreover, token listing on a CEX is also a good indication of the quality of the blockchain game you are participating in. While this is not an absolute basis it is a pretty good benchmark. Some of the most popular exchanges include Coinbase, Binance, FTX, OKX, and Kucoin.

DEX on the other hand will allow blockchain gamers to trade their tokens immediately without having to wait for Centralized exchanges to list them. They will not also be at risk of being restricted access from their own digital assets. Some of the most reputable DEXs areUniswap, Sushi Swap, Quick Swap, and Pancake Swap.

Before you start playing blockchain games you should also know the cost of Blockchain Games. As a general rule the more rewarding financially the game is the more expensive for you to get into the game. There is no such thing as a free lunch. If you got it for free, someone else must have picked up the tab.

Cost of  Blockchain Games

The cost of blockchain games depends entirely on the blockchain game developers. Some blockchain games will allow you to sample their gameplay by giving you free starter packs. However, if you like to have the full experience of the game you might be required to hold certain tokens,  NFT characters, equipment, or digital passes.

The cost of these tokens may range from a couple of dollars to thousands of dollars depending on their popularity and their potential to earn the player rewards.

A good example is the Sandbox game. Those who have certain types of NFTs have access to exclusive content in the game. They will be guaranteed to have rewards as well as qualified for higher rewards in the platform such as in-game cryptocurrency or loot that may contain digital collectibles that they can sell in secondary markets like OpenSea.

On the other hand, Sandbox allows gamers who don't have season tickets the chance to win season passes to be eligible for rewards. They can earn it by playing the game and completing certain tasks.  Those who win season passes will be rewarded depending on what they have accomplished in the game.

There are various ways players can start playing blockchain games without having to spend a penny. In the Sandbox game, you can contribute your talent in creating 3d objects using their free proprietary 3d game maker.  You can sell your creation in a market like OpenSea and use your earnings to buy yourself season NFT passes for more earnings.

Some blockchain games allow “scholarship programs” where NFT owners called “Managers” rent out their digital assets for free in consideration for a certain percentage of the game rewards the scholar receives using the game NFT.

Using Blockchain Games

One of the unique value propositions of blockchain games is the ability of gamers to earn something in return for the time they spend using blockchain games. Take note of the word “use” NOT just “play.”

Playing is just one of the many ways users of blockchain games earn. Players can also earn by renting out their digital assets such as land. NFT Landowners in the Sandbox game can rent out their digital assets.

Players can also put on their trader’s hat and try their skills in trading tokens. They can buy tokens at lower prices and sell them at higher prices. Blockchain game tokens are often listed in different trading venues and secondary markets for arbitrage.

If trading is not their cup of tea then they may stake their rewards token to earn “interest” from their holdings. Many of the biggest holders of blockchain game tokens are not actually players but investors. They earn from their token using the said mechanism. It is an effective way of passively increasing one’s holdings.

Just by simply owning certain tokens some players qualify for special “airdrops.” As a way of celebrating certain milestones in the development of their game or some important partnership, some blockchain games airdrop their community with free tokens.

Blockchain game developers also airdrop free tokens to those who helped grow the community and participated in the very early stages of the game development. If you are interested in receiving such rewards you can participate in early play-tests or testnets if they are available.

Being active throughout the development phase of blockchain games may also earn you some rewards.  It has been a common practice by many blockchain game projects to hold incentivized activities to grow their community and traction. They take the form of giveaways, memes or art contests, or referral competitions.

Blockchain game developers will continue to innovate to leverage blockchain technology. This includes ways to share the wealth and success of a blockchain game with its wider community members.

Risks of Blockchain Games

Finally, and perhaps the most important thing you need to know, blockchain games carry a certain amount of risks. However, your exposure to these risks depends entirely on you. Some of these games require a significant amount of money.  Some are risk-free. It is up to you if you want to participate in them.

The amount of reward to be had is directly proportional to the risk they carry. If you decide to support a blockchain game development early on by participating in its seed funding phase you stand to profit massively when the game becomes successful.

Conversely, you stand to lose it all if the developers abandon the project running away with the investors' money or in the blockchain community’s parlance “rug pulls.”  You also stand to lose money if the game does not reach the success it requires to break even.

In case you hit it big on blockchain games, you should also check if you incurred tax liabilities in the country where you are from. The recent market bull run has turned the heads of tax agents of governments around the world and you’ll never know if they decide you owe them money.

You may decide to play it safe and never participate in blockchain games that require you to invest money. You might even just try to qualify for free airdrops and nothing else. While this is a good strategy many of these Airdrops do require you to undergo KYC. That means you are paying with your private personal DATA.

If you are unlucky enough to participate in malicious airdrops you will be giving away sensitive information that can be used to impersonate you to scam people or gain access to your bank accounts.

Final Thoughts

You might be thinking that this article is too long. You just want to play blockchain games. Well, you can do that no one is stopping you. But without understanding how the different parts of blockchain games work you won’t be able to fully enjoy them. You might even hate them. Once you get used to the different tools used in blockchain gaming you won’t mind going through the additional process to start a blockchain game properly.

Using blockchain games is not just playing games. It is a new way of empowering players to have more active participation in the different aspects of the game such as in its development, funding, community growth, and revenue sharing. On the other hand, blockchain also exposes players to additional risks that do not exist in conventional games.

Hopefully, introducing would-be blockchain gamers to the different tools in blockchain gaming and sharing with them the different risks involved will help them have a safer, more enjoyable, and more rewarding blockchain gaming experience.