Crypto Beginner

Blockchain gaming: The role of blockchain technology in the gaming industry

blockchain games

Key Takeaways

  • Blockchain gaming, also known as play-to-earn gaming, is where the entire gameplay is built on a blockchain platform.
  • Three major components of blockchain gaming are NFTs, DeFi, and blockchain technology.
  • Axie Infinity, Decentraland, GalaGames are some examples of blockchain gaming.

Blockchain gaming opens up the portal to a world where online games are more “rewarding” than ever before. Because this spin on traditional games offers you a lot more than just fun. It brings you the opportunity to make money out of a hobby. That’s why it’s known as play-to-earn gaming.

What does blockchain gaming mean?

Blockchain gaming refers to games that allow players to earn in crypto as they own and trade different virtual elements in the game. It works by combining video gaming, blockchain technology, and decentralized finance (DeFi).

In these games, Non-Fungible Tokens (NFTs) represent every element of the game. Players can buy, sell, or trade these NFTs with others like them. They can also create avatar NFTs for use while playing the game. Owning in-game assets gives players greater control within the game.

Some popular platforms of this kind are Axie Infinity, Decentraland, Gala Games, and Alien Worlds.

The concept of blockchain gaming vs. traditional gaming

To fully appreciate the concept of blockchain gaming, you need to know how the traditional video game industry works. Traditionally, the video game industry follows the pay-to-win model. That means players have to buy in-game assets or different virtual elements that unlock the gameplay. The in-game purchases become useless once the game is finished. They cannot be transferred or sold afterward. The bottom line is that gamers have to spend money to enjoy a superior gaming experience.

Blockchain gaming changes this. It incentivizes gamers for the effort and time spent in playing and winning games. Rescuing video gaming from walled-off data networks, blockchain games let players purchase virtual elements of the game or NFTs, which enable the verification of ownership. The NFTs can be later traded for profit or exchanged for crypto or fiat currencies. If a player wins the game or makes any kind of record, the value of the NFT appreciates as demand for it increases among other players.

This variety of gaming also democratizes the global video gaming market. It chips away at the monopoly of the established gaming studios.

That said, other than the play-and-earn feature, blockchain gaming does share many similarities with traditional video games. They are both user-friendly, easy to access, and equally entertaining.

How did blockchain gaming become popular?

One of the key features that made blockchain gaming popular is it allowed players to earn rewards. This helped create a new digital economy and made gaming a lucrative way to generate income. The whole dynamic of the gaming industry changed as a result, and more players were drawn to blockchain gaming.

Besides, like traditional gaming, this variety of gaming, too, has a low entry barrier. So a beginner can start playing without much knowledge of the crypto market. That’s a huge draw. The user-friendly interface, too, plays a big role in making blockchain gaming accessible.

Most importantly, the player doesn’t have to invest in any new gaming equipment. They can access them from a browser or mobile device.

Important terms to know in relation to blockchain gaming

Blockchain gaming has two major moving components—NFTs and DeFi. In this section, we will look at each of them and try to understand how the two come together in the industry of blockchain gaming.


Decentralized Finance (DeFi) is an umbrella term for financial services on a blockchain. Blockchain-based games are part of the DeFi universe. That means these platforms, which are based on smart contracts, equip users to buy their tokens, invest in digital assets, and engage in other DeFi-related activities. The tokens are used for in-game purchases, to incentivize gamers, and in trading.

AXS, the native token of the Axie Infinity game, is an example. It can be used to buy in-game assets, reward gamers, and profit from price volatility in trading.

Being a part of the DeFi universe, blockchain gaming—along with pay-to-earn games—is known as GameFi. The term GameFi is a combination of Gaming and Finance.


In most games, not all the elements are readily available to all gamers. Players need to purchase some of them for use in the game. Some examples of such elements are land, avatars, weapons, costumes, cars, and tools. Purchasing such items, also known as in-game assets, gives players an edge over their competitors.

In blockchain gaming, players can buy all in-game items as NFTs. These NFTs help gamers prove their ownership of the digital objects acquired during gameplay. NFT marketplaces allow players to later exchange and convert them to fiat money.

How are blockchains changing the gaming industry?

Blockchain gaming is the sunrise sector of the crypto market. It is transforming the traditional gaming industry, freeing it from the clutches of a few gaming studios.

In terms of investment, this subsection of the industry is the preferred choice of many investors. Despite the harsh market conditions, the Web 3.0 game raised $1.3 billion this Q3. Gaming activity accounted for almost half of all activity across 50 networks.

More specifically, blockchain technology is transforming the gaming industry by:

  • Creating a more immersive gaming experience for players
  • Providing greater control to players over their gaming experience
  • Enhancing the ownership of in-game assets
  • Upping the value projection of in-game intangible assets
  • Offering tradable gaming resources and earning rewards
  • Cutting down the price of in-game assets and improving the participation rate

Benefits of implementing blockchain in gaming

The following are some of the benefits of implementing blockchain in gaming:

  1. Helps speed up crypto learning: Due to the highly technical nature of crypto projects, many find it difficult to understand this asset and the underlying blockchain technology. Blockchain gaming will help make the learning curve of the masses steeper. Not only does it provide an interesting and fun avenue to learn about crypto-related assets, but it also doubles the incentive for learning by paying you.
  2. Authentic ownership of game assets: Gamers on the blockchain can prove the ownership of their game assets as they are in the form of NFTs. The NFT automatically records the gamer’s profile, skills, and wins, capturing their experience and net worth. No one can steal this profile, impersonate others, or create profiles with false claims.
  3. Can be a potential source of income: Gamers who wish to earn from their passion for playing online video games can consider blockchain gaming. By selling in-game assets on various blockchain platforms, gamers can turn their passion into a serious profession.
  4. Governance possibilities: Developers and gaming studios control almost all traditional games. Both sometimes force users to play according to their rules or upgrade to the latest game versions. But in blockchain gaming, no other gamers or entity can influence the gameplay. All decision-making power is in the hands of players.

Gaming-specific Web 3.0 tokens, like SAND, AXS, MANA, TLM, and GALA, have seen tremendous growth in recent months. This has a lot to do with many more beginning to recognize these benefits.

The number of video gamers worldwide in 2021 was 3,243 million. If even 25% of these gamers migrate to the blockchain, it will have a tremendous effect on the blockchain ecosystem as a whole.


Why blockchain is the future of gaming?

While blockchain has significant potential for the gaming industry, it’s important to note that challenges, such as scalability and user adoption, need to be addressed for widespread implementation. As technology continues to evolve, the integration of blockchain into gaming is expected to bring about transformative changes in how games are developed, monetized, and experienced by players.

What are the features of blockchain games?

Blockchain games are evolving, and new features continue to emerge as developers explore the possibilities offered by blockchain technology. These features aim to provide players with enhanced ownership, security, and economic opportunities within the gaming ecosystem.

What is the use case of blockchain gaming?

Blockchain gaming represents a paradigm shift in how players interact with virtual worlds, introducing new economic models and fostering a more player-centric gaming environment. As the technology continues to mature, the potential use cases for blockchain in gaming are likely to expand even further.

How big is the blockchain gaming industry?

For the most up-to-date and accurate information on the current size and trends in the blockchain gaming industry, I recommend checking industry reports, market analyses, and news sources.

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