The Risk And Rewards of Crypto Gaming

In 2021, the global video gaming market hit a revenue increase of over 15 trillion rupees. With the growing number of players every day, it is no surprise that more people are finding better and easier ways to make in-game purchases. This is where cryptocurrency comes in.

There are so many gaming apps and sites that have already integrated crypto into their financial systems. Gamers can make payments in crypto and receive rewards in digital currencies as well.

In this article, we will show you some of the pros and cons of crypto gaming. But first, let's start by understanding the concept.

What exactly is Crypto Gaming?

Unlike traditional gaming which is centralized, crypto gaming works on blockchain technology. Gamers get to use cryptocurrencies or non-fungible tokens (NFTs) to make purchases or other payments in the games.

These gamers can also get NFTs or cryptos as rewards for winning these games. Such digital assets received as rewards become the property of the game player.

A lot of times, in-game NFTs are exchanged for stablecoins on either decentralized or centralized exchanges. These digital assets are either directly converted for fiat currency or sold at online marketplaces.

Rewards of Crypto Gaming

The major advantages of crypto gaming are payment flexibility, anonymity, and revenue. With the various cryptocurrencies and NFTs available, gamers have numerous choices for gaming. And since everything runs on blockchain technology, your transactions cannot be traced to you by banks or other third-party institutions.
Revenue generation is certainly one of the rewards most gamers look to get from crypto gaming. Fortunately, there are various ways to earn. Little things like completing quests in games can reward players with coins.

According to Harry Turner, founder of The Sovereign Investor, in-game items like armour, skins, weapon, and other equipment hold tremendous value in the real world.

Another way to earn in crypto gaming is by playing at online casinos. Today, many new online casino sites process payments via cryptocurrencies. Bitcoin is the most popular at these casino sites, but they also accept coins like Ethereum, Dogecoin, Litecoin, and Tether too.

When you win games at crypto casino sites and choose a cryptocurrency as your withdrawal method, your winning appears in your account immediately after the casino approves payouts. This is one of the reasons many online casinos are gradually integrating cryptocurrency into their systems. Some casinos even provide details on the use of cryptos to educate users.

Similarly, the esports gaming world is gradually integrating crypto payments as well. Esports gamers can receive their earnings from platforms in crypto. Also, many esports providers have gone into partnership with crypto firms, collaborating on NFTs and gaming projects. For example, in June 2021, popular crypto exchange platform FTX announced a ten-year USD 210 million sponsorship and naming rights agreement with Team SoloMid (TSM), a leading esports club.

Risks in Crypto Gaming

The rewards are no doubt fantastic, but it's important to know the risks of crypto gaming and tokens too.
When it comes to gaming tokens, you need to know that the demand and supply dynamics are affected by the popularity of the game. If a game drops in popularity or is abandoned by players, the demand for that in-game token or currency will drop with it. Such tokens may eventually become worthless.

According to Zain Jaffer, CEO of Zain Ventures, these token games are relatively new and their durability has not been proven. This means that there's no guarantee that the digital assets can stay valuable for a long period.

Harry Turner also agrees with the risks, adding that the market volatility also affects in-game digital assets.
Furthermore, due to the decentralization and non-regulation of cryptocurrency, criminals look for ways to scam crypto gamers. Some hack digital wallets that store crypto assets.

For example, earlier in 2022, hackers attacked users of the Axie Infinity game and stole INR 49 billion in USD Coin and Ethereum from them. Axie Infinity is currently considered the most popular play-to-earn crypto game. It recorded a peak monthly active player base of over 2.7 million users before the hack. In June 2022, Sky Mavis, the game developer stated that only about a third of what users lost in the hack will be reimbursed.