The global video game market surpassed INR 15 trillion in 2021. As more gamers around the world fully immerse themselves in the world of online gaming, it is only natural that cryptocurrency is playing a bigger role. important.
A handful of games are already integrating crypto directly into their game economies.
“Play to Win” or P2E, games reward players by paying them in cryptocurrency or digital tokens based on what they achieve or play the games.
By earning cryptocurrencies, players can take advantage of their skills or enthusiasm for the game. But players, before taking the plunge, it is good to understand the advantages and disadvantages of crypto gaming.
What is crypto gambling
While virtual video game money is not a new concept, the advent of blockchain technology has created opportunities for crypto game developers to add a real-world economy element to their games.
Crypto players can earn non-fungible tokens (NFTs) or cryptocurrency by playing and winning a game, and these digital assets then become the property of the player.
In many cases, in-game digital tokens can be exchanged for stablecoins on centralized or decentralized cryptocurrency exchanges. These digital assets can be sold or traded on online marketplaces or directly converted into fiat currency.
How Crypto Gambling Works
There are a variety of different business models in crypto games.
P2E games offer users different ways to earn or buy game tokens, says Adrian Krion, founder and CEO of blockchain-based game platform Spielworks.
“People can make money off of these tokens by buying them early and [hoping] so that many players enter the game after purchasing the tokens,” says Krion.
Some crypto games make money through advertising or selling in-game items, such as certain weapons, skins, or even virtual lands.
The developers then incentivize players to put more hours into the game by paying them in crypto or NFT for completing quests. These quests are usually simple tasks that involve interacting with the game in some way, such as killing a certain number of enemies or collecting a specific amount of resources.
Other crypto gambling platforms provide ways for crypto investors to bet their currency on casino games and other games of chance.
BitStarz, 7bitcasino and mBitcasino are among the three most popular crypto gambling platforms.
Best Gaming Tokens
The global gambling token market is worth more than INR 1 trillion, according to data collected by CoinMarketCap.
These tokens may only have utility in a particular game or gaming ecosystem, but the best tokens also have significant real-world value. Here are the top three by market cap:
ApeCoin (APE) is the most valuable gaming token, with a market capitalization of INR 177 billion.
ApeCoin is the native coin of the Bored Ape Yacht Club, a collection of non-fungible tokens built on the Ethereum (ETH) blockchain. Third-party developers have integrated ApeCoin into their games. For example, players of the P2E mobile game Benji Bananas earn special tokens that they can easily exchange for ApeCoin.
Decentraland (MANA) is the native token of Decentraland, a virtual world built on the Ethereum (ETH) blockchain. Users can buy and sell digital real estate, interact with other users, and even play games in Decentraland.
Players use MANA to purchase Decentraland NFTs defining virtual plots of land or exchange them for other in-game goods and services.
MANA’s market capitalization is over INR 143 billion.
The Sandbox is another metaverse, or digital world, running on the Ethereum blockchain. Sandbox tokens (SAND) facilitate different game transactions, including the purchase of digital plots of land called LAND.
SAND has a market capitalization of around INR 127 billion.
How to make money with Crypto Gaming
Crypto gamers can think of in-game rewards as small paychecks they receive for completing quests or other requirements.
Harry Turner, former hedge fund manager and founder of The Sovereign Investor, says in-game items such as weapons, armor, skins and other gear can have considerable real value.
“By completing quests and collecting NFTs, investors can earn a profit from the sale of these items,” Turner says.
DMarket is just one example of an online marketplace for NFTs and other virtual in-game items, many of which sell for millions of dollars.
Zain Jaffer, founder and CEO of Zain Ventures, says that like investors who buy stocks, crypto players who invest early in a successful game are likely to be the biggest winners.
In 2001, RuneScape players received free digital party hats as part of the game’s Christmas promotion. Twenty years later, Jaffer claims that these party hats are now worth billions of in-game gold. The most sought after party hat color has sold for 57 billion gold (almost INR 5 lakh), according to Runescape.
“It will come as no surprise if history repeats itself, and early investors in crypto gaming platforms and currencies will be the ones to reap the new real-world rewards,” says Jaffer.
Crypto Gambling Risks
Unfortunately for crypto players, there are many risks associated with crypto gambling and tokens at this point.
One of the major risks for crypto gambling tokens is that they are subject to supply and demand dynamics associated with the popularity of gambling. Once players drop out of a game, the demand for a currency in the game can completely dry up and render its chips worthless.
“Because these games are very new and their endurance has yet to be proven, there is no guarantee that their assets will remain valuable over long periods of time,” says Jaffer.
Turner says there are also significant risks associated with holding in-game currency.
“Market volatility can directly impact the value of your in-game assets. For example, if you hold a stock of Aurum (Crypto Raiders’ in-game currency) that you plan to use to purchase items virtual ones, its value could drop dramatically overnight and leave you with far less purchasing power than you had before,” Turner says.
Because cryptocurrency is relatively new and not well regulated, criminals are always looking to take advantage of crypto gamers through hacks and scams. Just because a game’s underlying blockchain is secure doesn’t mean its engine or marketplace is secure. Digital wallets that store crypto gaming tokens can also be hacked or mismanaged.
Earlier this year, hackers stole INR 49 billion in Ethereum and USD Coin (USDC) from users of the Axie Infinity crypto game. Axie Infinity is one of the most popular crypto games and had a monthly active user base of over 2.7 million players before the hack. In June, Sky Mavis, developer of Axie Infinity, said it would only refund around a third of the crypto its users lost in the hack.
Axie Infinity is considered the most popular play-to-earn game.