In recent years, cryptocurrency has been revolutionizing the finance technology sector and the global economy at large. Cryptocurrencies like Bitcoin and Ethereum have generated a lot of interest and investment, thereby contributing to the global cryptocurrency market that is projected to reach $11.71 billion by 2030.
However, while the cryptocurrency market has seen record-breaking highs, it is not without challenges. Following a loss of nearly $2 trillion in value last June, there has been a decline in cryptocurrency’s popularity among investors. For example, since that crash, Bitcoin has struggled to rally and is unlikely to reach its previous heights. This decline in popularity was particularly evident among millennials, with only 30% of them comfortable with investing in what they described as the volatile, ‘lottery-ticket’ atmosphere of cryptocurrency.
To revert this prevailing sentiment and reinstate cryptocurrency as a valued digital asset, the answer lies in tapping into the gaming industry.
Role of cryptocurrency in the gaming industry
While digital currency has been utilized by games in the past, the integration of cryptocurrency opens up a wider range of opportunities. First, the development of non-fungible tokens (NFTs) allows cryptocurrency to reshape the gaming experience. These digital assets are commonly bought with cryptocurrency. Typically, NFTs represent unique, rare, and indivisible in-game content that players are willing to spend on. Since NFTS are secured by blockchain technology, players do not have to worry about these valuable assets being stolen or duplicated. The interoperability of NFTs also bodes well for online casinos, since players can transfer these one-of-a-kind assets across different games without losing ownership and rarity. Without the use of crypto, it will be much harder to facilitate NFTs purchases among online players.
On top of this, players can also directly purchase special content and gameplay configurations using their crypto wallet without having to process their payments through traditional channels like banks and credit cards. This promise of speedy transactions without the involvement of a third party or middleman is how cryptocurrency has opened up the poker industry in the U.S. With crypto, online poker transactions can be made anywhere, whereas bank processing is dependent on certain jurisdictions where poker is legal. Gamers can therefore fund their online poker accounts and withdraw their winnings in a more efficient, streamlined manner. The end-to-end decentralization of cryptocurrency also leads to lower transaction fees; players can take full advantage of their earnings whether they choose to store it in their crypto wallets or exchange it for fiat currency.
When using conventional cash, there is also the risk of the user account being hacked and having your game funds and sensitive information compromised. But the blockchain technology that underpins cryptocurrency generates a permanent and unalterable record for every transaction using a wallet address and unique identifier. This adds a layer of anonymity, privacy, and security for players when they access their earnings and helps them avoid fraudulent transactions.
The win-win relationship for crypto and gaming
Of course, the crypto market is not the only one that can gain from gaming adoption. The various business models through which games can adopt cryptocurrency improves the experience for gamers and game companies alike. On one hand, gamers are promised safe, secure, and transparent payment systems when they invest in cryptocurrency. Through these, investors are given full control over their digital asset portfolio while also allowing them to exchange their virtual content for real-world value. Game companies, on the other hand, are able to innovate their game prizes and loyalty programs through unique attributes like NFTs and crypto-based rewards.
Because gaming is a digitally native activity where billions of users are already used to making digital transactions, it presents a path where the cryptocurrency market can be met with the least amount of resistance. There are nearly 3.2 billion gamers participating in a sector that’s expected to be worth $321 billion by 2026, so there is no better time than now for cryptocurrency to make a mark for itself in the mainstream through gaming.