Understanding Gaming Integration With Blockchain
Undoubtedly, blockchain is still on the look-out for its mass adoption, a perfect use-case that can set its path to becoming a usable technology adopted by wide users.
Many think a digital form of currency can be the one but all hopes of adoption by the financial institution has shuttered and faces tough regulations from governments each year.
Blockchain technology has a very broad scope in different areas and sectors, such as IoT, Manufacturing and Medical industry supply-chain management. However, none of these sectors have come up to this date as a leading success story for how blockchain can be implemented with full buy-in and mass adoption.
Gaming shows potential as a real adoption for blockchain
- Gaming, as a global phenomenon generates each year revenue of $110 Billion and is growing rapidly.
- It is also a sector that is run by people who are technologically inclined and predominantly younger. Blockchain does need that bit of persona to target for early adoption.
The demand for gaming virtual items is substantial. Many players are addicted to the notion of advancing in the game. Items from gaming like characters, power-ups have gained monetary value in the real world. eBay, along with specialist trading sites, have allowed players to sell their virtual items.
This has attracted fraudulent sales, money laundering, phishing attacks as well as theft. Also, the games database contains thousands of credit card details and are frequently targeted by hackers.
In addition, the game industry is plagued with fraudulent downloads. It is estimated that for every legitimate virtual item sold and downloaded, there are 7.5 virtual item downloads lost to fraud. This number can be much higher in some countries — in China. For example, there are 273 fraudulent virtual items downloaded for every legitimate item.
This means a staggering 50–70 percent of all virtual good purchases are illegitimate. You can imagine how much revenue could have been generated if there were no such fraudulent downloads.
Here are some worrying examples:
- According to a new report, popular smartphone games such as “Clash of Clans” are being used to launder hundreds of thousands of dollars on behalf of credit card thieves.
- In 2015, it was reported that Steam, the world’s most popular online store for PC games, had around 77,000 of its accounts hijacked.
Therefore, given the huge size and challenges which we mentioned above, gaming does show potential for the blockchain industry. Here are all ways how the use of blockchain can resolve problems for the gaming industry to protect players and game makers interest.
How the use of blockchain helps gaming sector to reach its full potential:
1. Making payment processing secure:
The game database contains thousands of credit card details. Players are worried about the protection of this information. With Blockchain, gamers can keep their debit or credit cards away.
No matter how small payment is, blockchain projects like Harmony offer a decentralized ecosystem where projects can create their own native token or currency. There is no way for a hacker to steal these tokens and removing the need for debit or credit payments.
2. Minimizing fraudulent downloads:
The gaming industry suffers the maximum hit of online fraud downloads. Harmony Blockchain can save billions by eradicating every chance of fraud.
- Here is how: For each successful purchase or download, buyers public-key record (will be used for download) is saved in the decentralized database. When the player opens the app, they input associated private-key to unlock and enjoy gaming. This acts as an individual user licensing. No way hackers can tamper with this database to add fake accounts.
3. Storage and Security:
“Storing data online seems a risk for game companies and players”. Data stored in blockchain makes it impossible for hackers to target an individual account as they can’t guess the private-keys.
With respect to users data storage e.g. account details, Harmony plans to implement zero-knowledge proof which will allow protection to users data.
4. Safe trading of virtual items:
- Trading sites for virtual items are frequently targeted by hackers and have weaker security than a shopping site or online bank. The use of Harmony blockchain can create a decentralized marketplace where items can be traded safely and securely.
- Each virtual items earned in the game can be associated with the owners public-key (works like an ownership right). This will enable items to be traded in the platform only when approved with the associated private key.
- Harmony Smart contracts will add a security layer where virtual items can be permanently locked in the individual account or could exchange the ownership right when needed.
- Many games lend their virtual items to friends. By using smart contracts they can set a timeline to lend, ensuring they are returned back upon completion of the timeline.
“Gaming apps have the potential for Blockchain use and can help to transform traditional business models to bring enhanced security, transparency and reduced cost.”
So Why Harmony Blockchain:
The key reason stopping enterprises to make a move in the blockchain is that the technology is still in its infant stage. Today most advanced projects can hardly scale to up to 10,000 TPS.
Many proposals have shared, however, most come short of their promises or compromise on the core fundamental of blockchain i.e. decentralization or security to improve scale.
Harmony solves current challenges in blockchain ‘scalability’ by introducing sharding at the state level in its blockchain without compromising security and ensures a fully decentralized network. Sharding vastly improves scalability due to the fact that each node only has to carry a portion of blockchain data in order to complete a transaction.
Additionally, Harmony can provide a secure random source for all the gaming or gambling apps so there game random mechanism is fair and secure. No more attacks like those on EOS where attackers bias the randomness and get the price for themselves.
Recently Animoca announced its partnership with Harmony to build a market place for games to allow trading their virtual items.
Animoca Brands is a publicly traded company. Internationally recognized developer of popular mobile games like Beast Quest, Ben 10, Garfield, Doraemon and Astro Boy.
You may know them as the creators of ‘CryptoKitties’. Animoca is also working on developing a decentralized community-driven gaming ecosystem for creators to monetize assets and gaming experiences in the blockchain version of the sandbox.
For more details:
Special thanks to @ashkykharoo for helping me to finish the article.
Disclosure: I have not invested in Animoca or hold any Harmony tokens. Just a gamer and a blockchain enthusiastic person who is celebrating this partnership.