Blockchain Gaming Explained

Blockchain gaming explained

In a very short period of time, blockchain has revolutionized the way we think about exchanging money, storing data, and communicating with others in a decentralized yet trusted and secure environment. With inventions like NFTs and Metaverse, blockchain technology opens up exciting opportunities in one of the world’s most popular and profitable industries – gaming

What is the nature of blockchain gaming?

At their core, decentralized games are founded on the backbone of blockchain technology and rely on smart contacts. In blockchain games, there are some that hold ownership over in-game assets on the technology, while others use blockchain to run entire worlds.

To grasp the concept of blockchain gaming, we need to go back to the basics and explore what blockchain is. At the heart of blockchain gaming lies a distributed public ledger with no central authority. The inherent decentralization provided by blockchain is the core distinction between blockchain games and traditional games, which rely on centralized server infrastructure. 

Тhe big potential of blockchain in games became apparent with the emergence of non-fungible tokens or NTFs – unique, digital assets or cryptographic tokens stored on a blockchain. NFTs allow gamers to claim ownership of certain in-game assets, like skins and characters. They can also be in full control over their assets due to blockchain’s decentralized foundation. Assets can be traded with other players or can be sold for crypto. And unlike traditional games, blockchain enables a greater level of connectivity between games by allowing players to use assets across different game universes. 

How is blockchain utilized in gaming?

There are several use cases of blockchain that it’s worth looking into. including NFTs, play-to-earn, and Gaming economy tokens.


NFTs were created in the early days of blockchain gaming and continue to play a crucial role today, so much so that even some traditional game companies are now trying to jump on the NFT bandwagon. You can think of NFTs as a tokenized version of assets from the real world or the digital space. These assets could be anything from art to music. In the gaming space, they’re mostly in-game cosmetics like skins or gameplay items that players can purchase and own, even outside the game.

The NFT owner has full control of the asset, which has a real-life financial value and can be sold or exchanged for money.


The play-to-earn paradigm in blockchain games encourages players to participate in a game to potentially earn rewards in the form of cryptocurrency. Not only can they purchase NFTs, like in the previous example, but players can also generate assets in the game. For example, a player gets hold of a valuable in-game asset. This could be a skin, cards or virtual land. As the gamer continues playing, their chances of collecting more assets increase, as well as the opportunity to increase their value. These assets can later be sold for cryptocurrency or real-world money.

Some of the successful games of this kind include Axie Infinity, Gods Unchained and Thetan Arena to name a few. 

Gaming economy tokens

Blockchain technology enables the creation of a new gaming economy model, where blockchain-powered games can have their own fungible tokens. These tokens are the in-game currency that can be traded within the game but can be acquired via external sources like crypto exchanges. This omits the reliance on in-game purchases and makes in-game currency purchases available to all. 

Via the use of blockchain in gaming, in-game assets are owned by gamers rather than gaming publishers. They can be exchanged on open marketplaces for cryptocurrency of fiat money, monetizing gaming time.

Blockchain gaming pros and cons 

We’ve already witnessed the rise of play-to-earn games and virtual worlds like The Sandbox but the reality is that blockchain gaming is still in its infant stage. Although projects like Metaverse created hype, the gaming community today is still unsure of how sophisticated the technology is to be successfully integrated into the gaming industry.

Without a doubt, blockchain comes with a set of advantages and drawbacks. 


  • Secure in-game exchanges – with the rise of numerous digital wallets like MetaMask, players can safely buy and sell crypto tokens and in-game assets through the use of digital currencies.
  • Interoperable gaming profiles – by using their unique public address, players can transact with their crypto on a number of different games. Assets can be used in completely different gaming universes, offering more flexibility and new opportunities.
  • Full ownership of in-game assets – players have authentic ownership of their game assets, meaning that they’re not dependent on developers, who can delete a game at any given time. 
  • Decentralization – unlike in traditional games, where all decisions are made by the developers, in blockchain games the players have the power to make decisions. 
  • Creation of rare in-game assets – the use of smart contracts can be extremely advantageous in creating rare digital collectables that will be highly priced. These in-game assets will be created as a result of specific types of interaction. We’ve already seen this with CryptoKitties, where unique cat breeds are more expensive. 


  • Monetizing a hobby – for most players, games are designed to bring joy and an alternative way to relax and escape from reality. By striving to fully monetize the gaming experience, this concept could undergo a complete shift, which is currently not favored by some players in the gaming community. 
  • High barriers to entry – blockchain could make gaming an expensive hobby for players by tokenizing assets and in-game cosmetics. 
  • Technological immaturity – as the technology is still relevantly new, blockchain gaming still lacks the technical sophistication of traditional gaming. 

What are some types of blockchain games?

Although the categories that blockchain games fall into are constantly evolving and growing as the technology becomes more advanced, there are few game types that currently stand out. 

Collectable games

These blockchain games are at the heart of the crypto gaming world. The main idea is for players to collect certain assets or characters in order to develop them and increase their value. A great example is the Ethereum-based blockchain game CryptoKitties, where players train and trade kitties. Fantasy sports games played on No Limit Fantasy Sports, are another success story from the space. 

Role-playing games

Role-playing games or RPGs are those that require players to take part in real-time combat using characters. These are typically shooter games or hack-and-slash games. As a reward for playing these games, you can receive NFTs or crypto tokens. Some popular examples include Binemon, Six Dragons and Lost Relics

Open world games

In open-world games, the player enters a whole world created using assets based on crypto. Imagine buying virtual land and building it, customizing it with people, plants and anything you can imagine. Later, you can sell your virtual parcel of land to another player and receive real-life money. One of the most trending examples here is The Sandbox, a game similar to Decentraland, where you can create, sell, use, and monetize virtual reality NFTs that you have ownership of. 

The most popular blockchain gaming platforms today

The Sandbox

Perhaps one of the most trending platforms in the blockchain gaming space, The Sandbox offers a 3D virtual reality with a similar gameplay concept to Decetralant, colonizing the Metaverse world. Players can buy and sell digital lands by using the ‘SAND’ token. What’s specific and lucrative for players on The Sandbox is that there are only 166,464 lands on the platform, creating scarcity and increasing price and demand. In terms of experience, the platform is very similar to Minecraft, using the well-known block forms. 


Powered by the Ethereum blockchain, Decentraland is a “virtual destination for digital assets”. It’s a virtual reality platform where players can participate with unique avatars, they can explore and trade virtual lands, wearables, names, and estates. To take part in this ecosystem, players must own MANA tokens. The MANA token is not only a resource used to buy and sell items but also a way to enjoy different virtual social activities like concerts. Gameplay is featured on VR experiences and those involved can trade with NFT Marketplace.  

Axie Infinity

With more than a million players, Axie Infinity is the first NFT game based on Ethereum to reach the $1 billion sales mark. It’s one of the most eminent NFT games at the moment, produced by the Vietnamese Sky Mavis. Inspired by Pokemon, players can create a team of Axies or creatures and either bring them to the Arena mode where they can battle players or let them fight enemies in the Adventure mode.

Each Axie is an NFT and holds its own, unique value. The game uses two cryptocurrencies – AXS or Axie Infinity Token and SLP or Smooth Love Potion. AXS is earned by making your way to the PVP leaderboard, while SLP is rewarded for unlocking certain adventure mode levels and winning matches. 

What is the future of blockchain gaming look like?

Blockchain is already making some progress in the gaming industry but the question still remains whether blockchain gaming is something that players around the world would appreciate or would rather oppose as it completely changes the idea of gaming as a hobby. Without a doubt, there is undeniable potential in blockchain gaming, but challenges like speed and user experience are yet to be addressed.  The big question of whether blockchain gaming will progress and become what was originally intended or whether it will be remembered as a hype that slowly faded away still remains to be answered.