According to Wikipedia, “Crypto-currency is a digital currency that is designed to function as a medium of exchange through a computer network that is not reliant on any central authority, such as a government or bank, to uphold it”.

The way that cryptocurrencies function is through the use of the blockchain, which is a type of DLT or distributed ledger technology that enables transactions to be kept in a ledger.

This ledger contains transactions in the form of an immutable cryptographic symbol known as a hash. Transactions are bundled together and stored in a block, which has to be mined in order to validate or verify it, post which it is added to the chain.

Blockchain basically refers to the blocks that refer to the chain, all of which contain information of transactions. This system ensures that is secure, since to hack a blockchain network, all the blocks would need to be altered to some degree to ensure that latest transaction can be verified. This also means that the more the number of blocks in a chain, the harder it is to alter it.

Cryptocurrencies utilise this blockchain technology to establish their own systems and tokens which are representations of the currency they promote. Currently, Bitcoin and Ethereum are some of the most popular cryptocurrencies. In theory, all tokens and items can be validated on the blockchain and exchanged, as they are all digital assets, as long as a wallet exists to store them.

For example, NFT’s, much like cryptocurrencies, exist on the blockchain, where they can be verified and authenticated. The prime value that these blockchain tokens, cryptocurrencies and NFT’s have is that they be authenticated as a complete ledger exists of their record, right from their origin to their current ownership.

This technology has been utilised extensively in many industries, and is now starting to be used in gaming. At the principal level, all blockchain technology does is make it safe to store information in a way that makes it impervious to alteration.

Blockchain technology can help make your ledgers and records tamper-proof, and for an industry such as gaming where users compete against each other in virtual leaderboards for bragging rights, this can be extremely important.

However, its use in the gaming industry is already starting to get extremely prominent. According to joystick games, Blockchain has helped drive the emergence of the P2E, or Play-To-Earn gaming industry. In P2E games, players can exchange in-game items, skills, attributes etc in marketplaces.

They can also sell their items in exchange for cryptocurrencies or fiat currency. This is because all the in-game items in P2E games have been recorded on the blockchain, and the veracity of the items can easily be validated in order to ensure they are genuine.

Furthermore, the coins in some P2E games are a form of crypto currency themselves, enabling them to be traded and exchanged just like any other cryptocurrency or fiat currency. This means that in those games, the game is essentially powered by crypto instead of the game’s in-game token as was previously done.

All of these changes are extremely beneficial for gamers. Earlier, in-game tokens and coins and items were subject to the whims of the game developers and publishers. Cancellation of a game or refusal to roll out updates usually meant that the game would soon slide into obsolescence, and that would mean that the time that gamers spent or the money they spent on the game would be wasted as those items would die with the game.

However, with the use of crypto and blockchain, not only can the items be traded, but the crypto that a player earns inside the game can also be converted into fiat currency.

Cryptocurrencies are also changing the gaming industry as they are giving rise to a creator economy, which can be extremely beneficial for a game’s popularity. Cryptocurrencies and Blockchain mean that in P2E games people can create their designs for tokens and items in the game, or create skins and trade them similar to the items released by the publishers.

This means that artists and designers can create designs and skins and items, which can be paid for by players or collectors, enhancing the popularity of the game, but more importantly, sustaining the in-game economy, driving it forward by propagating it further.

***Sponsored post by joystickgames***

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