Have you ever played video games and needed to buy in-game items, like an extra life, a new weapon, a faster car, outfits, gold coins, diamonds, or upgrade your character? Then you should be able to relate with the concept of gaming tokens.
In traditional video games, players purchase such items with money, which are non-recoverable. Then the process involves -
selecting the item you want to pay for
inputting the details of your credit or debit card and
having the cost deducted in the value of an actual currency.
Gaming tokens work with the same concept.
To be able to understand how gaming tokens work, knowledge of cryptocurrency and blockchain gaming is required.
What Are Gaming Tokens?
Gaming tokens or gaming coins are digital currencies used as in-game currency or fiat to purchase in-game items in video games. Now used by online video games, the origin of gaming tokens can be traced back to Ccasino tokens or Ccasino chips.
Casino tokens are plastic or metal coins used in place of currency in casinos. Each token has an equivalent currency value. Money is exchanged for these tokens. These tokens, however, do not have any value outside the casino.
Just like paper currency or cryptocurrency, it can be gifted and also appreciated or depreciated.
Gaming tokens are used by two major industries - videogames and cryptocurrency.
The video gaming industry is one of the most profitable industries globally, valued at about $180 billion and is estimated to be about $234 billion by 2026. With the new diversification into cryptocurrency, cryptocurrency gaming has a market capitalization of over $17 billion. This figure is set to increase in the coming years, hence a lot of game developers have fully migrated to developing games using blockchain technology.
Some of the biggest video game companies globally are Nintendo, Sony, and Microsoft, which are all diversifying into this new gaming system.
Video games these days are designed as a metaverse where you can own properties that have real-life value. How cool is that?
Money is our legal tender in the universe, and gaming tokens are the medium of exchange or purchase in a gaming metaverse. They are used to purchasing gaming items in the game. This way, you can build, construct, and design your own game.
Traditional gaming, however, has a significant disadvantage that blockchain games have worked to rectify. Items purchased in traditional games are stuck with you or lost during another purchase. However, these characters and items can be auctioned off with blockchain games and gaming tokens to give actual money.
Cryptocurrency brokerage can also trade gaming tokens like other cryptocurrencies
DID YOU KNOW?
Blockchain gaming companies raised USD476 million in the first half of 2021. This further reinforces the idea that, although a new industry, blockchain gaming is an up-and-coming industry to invest in, with profitable returns.
Uses of Gaming Tokens
Players can acquire and upgrade weapons, armor, tools, and assets within the game.
Tokens are used to create NFTs.
They can be used to complete a task or skip a level.
How to Acquire Gaming Tokens
There are various ways to acquire gaming token.
Playing the Game to Win Tokens
Games are built in stages or levels. Completing a step and moving on to the next in most games usually comes with a reward or gift, which could be in the form of a gaming token. However, this method of acquiring tokens requires a lot of time and commitment, some of the stages can be tough to pass, and you might want a "cheat" to move you to the next level. This is where gaming tokens come in handy. You can pay to move to the next stage.
Buy Gaming Tokens
Buying gaming tokens is the easiest way to acquire gaming tokens, although it comes at a price. It is done through a cryptocurrency exchange or cryptocurrency brokerage. Cryptocurrencies can be traded in exchange for gaming tokens. A cryptocurrency needs to be supported by a game to be able to use it for the game.
To buy gaming tokens using cryptocurrency, you as the player need to:
Confirm that the cryptocurrency you are about to purchase is a recognized fiat by the game
Create an account on a cryptocurrency exchange or brokerage
Connect your credit card to purchase cryptocurrency,or connect your cryptocurrency wallet to use pre-existing cryptocurrency
Trade your cryptocurrency for the gaming token
How Do Gaming Tokens Work?
Blockchain is used to build a gaming system. Metaverse or virtual reality games are developed by developers where gamers can build and design their games.
The digital assets purchased in these games have real-world value and can be sold off on blockchain gaming.
Traditional videogames operators own merchandise purchased. However, in crypto gaming, items purchased belong solely to the players.
Gaming tokens are like fuel that powers the blockchain gaming network.
Types Of Gaming Tokens
It's the digital age, and even currency and transactions have gone digital. There are a lot of gaming tokens. Some can be used across different games, while others are restricted for use with just one game.
Players can acquire gaming tokens from approved cryptocurrency exchanges such as Binance, Bitmart, Bithumb, etc.
1. Enjin Coin
Enjin Coin is an ethereum-based cryptocurrency. Assets minted with the Enjin Coin are removed from circulation and locked in a Non-fungible token (NFTs). NFTs can be likened to the digital identity that digital artists use to protect their work from plagiarism. Enjin Coin is one of the top ten NFTs. They are pieces of digital content such as bitcoin, ethereum, or dogecoin.
Enjin Coin was created by Enjin, a gaming platform launched in 2009. It is the largest gaming community platform online with a market capitalization of over $2.7billion.
Unlike other gaming tokens, the use of Enjin Coin is not limited to a specific blockchain game. It works with various games that support the use of the token. Items purchased in Enjin Coins can be used across multiple games.
Games that support the use of Enjin Coin include alterverse, age of rust, among many others.
2. SAND Token
SAND Token is the recognized currency of Sandbox. It is an ERC-20* token issued by Ethereum. SAND is available on blockchain platforms like Binance, Bitmart, Bithumb, Gemini, kucoin, crypto.com, and many others. It can also be purchased using a credit card or directly from Sandbox's website/dashboard. SAND can also be obtained for free through play to earn game versions.
This token's market capitalization is over $2.1 billion and has a trading volume of over $735 million. It enables players to build, own and take charge of their gaming experience.
SAND can be used to purchase LAND, a digital 96x96 plot of real estate in the SANDBOX Metaverse. Pixowl created a Sandbox. SANDS can be acquired to buy LANDS to form an Estate. When the LANDS purchased by players increase in value, players can sell the digital assets in exchange for cryptocurrency, converted to cash. These digital plots can also be rented out to other players, and the owner earns income through this.
SAND can also be used to create NFTs that players can integrate into their games.
3. MANA
MANA is the operative token of the blockchain game Decentraland. Decentraland works on a virtual reality platform that simulates the real world. In its metaverse, players can purchase plots called LANDS with MANA. MANA is an ethereum-based cryptocurrency, that has a market capitalization of over $5.4 billion. Players can use these lands autonomously for purposes that suit their interests, such as games, digital tourism, artwork, and many more.
4. BAKE
With a market capitalization of over $400 million, the BAKE token was released in September 2020. It was released as a native token of the Bakeryswap ecosystem. Anonymous programmers developed BakerySwap to promote Decentralized Autonomous Organizations.
Unlike most gaming tokens, players can procure BAKE tokens by giving liquidity on BakerySwap, and BAKE holders can decide on administration and gather exchange charge profits with their tokens.
5. Trillium TLM
Trillium is a native token that is used in Alien Worlds, a decentralized NFT multiverse. Alien Worlds is a giant decentralized game on earth. It was developed by Dacoco GmbH, german developers in 2020.
Players in Alien Worlds called "explorers" can mine TLMs to acquire NFTs. Trillium has a market capitalization of over $315 million.
In the Alien Worlds metaverse, TLM is used for the following;
NFT purchase - in-game items or merchandise are minted as NFTs with TLM.
Gameplay Incentive - TLM is used to vote in Planet Decentralized Autonomous Organizations (DAOs) in the game metaverse.
6. WAXP
WAXP is the token for WAX, founded by William Quigley and Jonathan Yantis, and Ethereum issues it. WAX is a unique gaming coin because it can be converted to various forms like WAXE and WAXG.
WAXE is the new Ethereum ERC20 utility token. It can be swapped for WAXP. WAXP has a market capitalization of $1.012 Billion.
7. FLOW
Flow coins are the native tokens for the Flow network. It has a market capitalization of over $4 billion. The FLOW ecosystem is a sophisticated one. Brands like Warner music, sumo digital, Ubisoft, and Samsung are all partners in the flow ecosystem. Dapper Labs initially designed a flow ecosystem.
8. Playchip
Playchip is an Ethereum hosted token. It is a decentralized utility token on the Playchip ecosystem consisting of seven platforms.
Playchip is the legal tender used in the Playchip ecosystem. The ecosystem has over a million users from over 70 countries.
Playchip has a market capitalization of over $110 million. Playchip can be used to compete in crypto games.
9. Illuvium
Illuvium is the official exchange token of Illuvium, a blockchain-based game. Illuvium is built on the ethereum blockchain, and is the first AAA-rated blockchain-based game. AAA games in the gaming world refer to video games that big game developers develop.
The market capitalization is over $752 million.
10. AXIS
Axies are a special kind of gaming token, because they are NFTs. It is the utility token of Axie Infinity, a crypto game designed by Sky Mavis, a Vietnam-based company. It is issued by Ethereum, but has a sidechain called Ronin. Ronin is a kind of marketplace and crypto wallet for purchasing and selling.
Axie Infinity has over two million daily active followers. In August 2021, Axies Infinity made peak sales of tokens of almost $850 million.
Non-Fungible Tokens (NFTs)
A non-fungible token (NFT) is a unique and non-interchangeable unit of data stored on a digital ledger.
Non-fungible tokens are a form of in-game assets that cannot be duplicated or readily interchanged.
They are one-of-a-kind digital assets.
For example, the White House is a non-fungible token because there is just one of it. It can be duplicated for reasons such as movies or music videos or books, but they are just copies as there can only be one token of The White House.
Non-fungible tokens can take the form of anything such as houses, music. The most common NFTs, however, are artworks in the form of images or GIFs.
To prevent plagiarism or duplicity of digital artwork, art owners can tokenize their work to sell as an NFT.
When a digital artwork is "tokenized", the owner gets a cut of any future sale of the token.
The world's most expensive NFT, was sold for $532 million!
The NFT market is valued at over $10 billion. NFT can be purchased on online marketplaces such as superrare.com and Niftygateway.com.
How Do You Make An NFT?
Making an NFT involves several steps:
Step 1: Open a Cryptocurrency Wallet.
Step 2: Deposit some money and purchase Cryptocurrency.
Step 3: Open an Account on any NFT platform of choice. There are varieties of NFT platforms for you to choose from. You should compare the Opensea, Blockparty, VeVe, Niftykit, FTX and Pinata, among many others. While some of these platforms are free, some require a token for a monthly subscription.
Step 4: Upload your artwork on the NFT platform; the process of uploading an artwork onto an NFT platform is called "minting." Artwork uploaded to an NFT platform is encoded to the platform's blockchain. The NFT platform acts as a digital ledger for keeping a record of the artwork. This creates a unique digital signature for the artwork which cannot be duplicated.
Uploading and listing an artwork on an NFT platform costs some cryptocurrency. Listed artworks can be bid and bought by interested buyers.
The Advantages Of Gaming Tokens
Blockchain gaming tokens offer players and developers some benefits:
1. No need for intermediary or third-party
In the past, purchasing in-house items on games involved a third-party transaction where the gamer had to pay via a platform such as Google play or Microsoft games. These third-party transactions, however, do not wholly favor either the developer or gamer. This is because the game hosting platform charges the gamer a transaction fee for every purchase made on the game, and takes a percentage commission from the sales of items in the game before it goes to the development.
However, gaming tokens with the aid of blockchain games now enable players to get more value for their money and allow developers to make their truly deserved income or profit.
2. Provides Income
Players can now earn real-time income just by playing. Games like Axie Infinity have been played to versions where players battle against each other to win tokens. These tokens can be converted to and sold for real money.
3. Control
Players have ultimate control of their gaming experience with gaming tokens. They can purchase in-game items and sell off whenever they want to. Gaming tokens eliminates the scenario where players are "stuck" with game merchandise. There's a large room for flexibility.
The good thing about gaming tokens is that you do not have to be a gamer to hold tokens. Anyone can own gaming tokens.
When you purchase gaming tokens, just like cryptocurrency and shares, you can leave them to appreciate for some time and then sell them. Unlike traditional in-game items, in-game items purchased with gaming tokens can be sold in an open market for cash.
Gaming tokens can be sold or exchanged for cryptocurrency through a cryptocurrency brokerage.
When to sell and what platform to sell your token is totally up to you. This post is not geared towards giving financial advice.
As more cash is presently being put into the market, there's no question that gaming tokens will undoubtedly appreciate as the business advances. Likewise, a few studios are leaping to the crypto gaming fad, trying to profit by the most recent pattern.
The major traditional gaming problem which blockchain gaming and gaming tokens have helped solve is the possibility of converting money in the games into real money.
Sources
ERC20* is a scripting standard used within the Ethereum blockchain. It is a set of guidelines that a new token created in the Ethereum network has to follow.
Market capitalization of all gaming tokens is based on figures from 11th November, 2021.
The values are all obtained from livecoinwatch.com.
Keep up-to-date on all tokens by following our YouTube Channel here.
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