- Why is blockchain gaming or crypto gaming increasing in value and popularity?
- Cryptocurrency and NFTs in a gaming ecosystem are the game-changer
As of mid-October 2021, the total value of altcoins was above $1.22 trillion, per CoinMarketCap data, making it an unprecedented growth. Looking at it from another angle, less than five years ago, on December 25, 2016, there were 199 altcoins listed on CoinMarketCap. None had reached $1 billion in value. At the writing time, 92 altcoins have surpassed $1 billion in value.
What makes these cryptocurrencies valuable? And as an investor looking for gems, how can you shift between hype and long-term value? One way is to look for the utility or use cases that a token or project offers.
New Cryptocurrency Use Cases Breed New Sectors
Throughout the bull run of the past year, entirely new sectors and utilities have not only emerged but exploded.
DeFi exploded in the summer of 2020. With many people in lockdown, working from home or unemployed, internet connectivity solved many problems. The internet kept us connected through Zoom calls and social media and kept us entertained through streaming services. But not only that, hundreds of millions of people found themselves with less income or more time on their hands. Many turned to side hustles, additional income streams, and passive income, whether trying to make ends meet or gain financial freedom.
Many of these found investing and explicitly investing in cryptocurrency. Along with this, the increased popularity of decentralized exchanges helped to boost this asset class. Staking and yield farming helped create a dynamic source of income for many cryptocurrency users. The DeFi industry is now at $152 billion per CoinMarketCap data.
NFTs have gone from an obscure side project in crypto to a worldwide phenomenon embraced by world-famous athletes and Hollywood celebrities. Over $3 billion is now traded each month on the significant NFT exchanges listed by DappRadar. NFTs have entered the fields of art, collectables, sports, and gaming.
One of the newest sectors in crypto, blockchain gaming, has grown to just under $13 billion. Axie Infinity, a cryptocurrency-based game with NFTs as player characters, has over 2 million active users. Its tokens, $AXS and $SLP have garnered much attention in this new sector.
This is a tiny fraction of the worldwide gaming and cryptocurrency markets; the sector has a high potential upside. Savvy investors will be watching what new projects do in the GamFi sector.
Why is blockchain gaming or crypto gaming increasing in value and popularity? What value is created for users? The following takes a deeper dive.
When playing a traditional video game, the user receives entertainment value. However, they generally pay to participate, and a centralized gaming company, such as Sony, Nintendo or Microsoft, owns 100% of the game elements. The users also pay for skins and attributes in the game store. If that game is discontinued, all digital properties either disappear or are owned by the company. The aspects of cryptocurrency and NFTs in a gaming ecosystem changes ownership dynamics.
GoFungibles is an excellent example powered by a utility and governance token, $GFTS. However, the booming crypto gaming metaverse contains multiple facets:
- The in-game currency is earned by actively playing the game leveraging a successful play-to-earn mechanism. The earned currency can be converted to the platform’s native $GFTS tokens. Players can then utilize it for various purposes, such as upgrading their NFT characters or participating in the DAO governance system
- Users can buy skins and characters in the game and upgrade them to gain an advantage over other players. These can also be sold and traded because they are NFTs that show ownership. The GoFungibles ecosystem makes this even simpler by having a comprehensive NFT marketplace that allows free minting and listing.
- An additional aspect is staking of cryptocurrencies and NFTs to earn more rewards. Platforms like GoFungbiles have built-in functionality for the same, which may catch on like wildfire.
- When a token like $GFTS has governance elements alongside utility, the holders of that token earn voting rights, enabling them to influence the direction of the platform. Being active participants in the GoFungbiles ecosystem gives users more reasons to hold $GFTS and utilise it in numerous ways within the game and marketplace.