Kongregate Developers Blog

What are Blockchain Games?

Blockchain technology has been around since 2008, as a way to record bitcoin transactions through a sort of digital ledger. This technology has been used time and time again as new crypto currencies were minted, but recently, they’ve been the foundation for a new type of gaming.

Blockchain games — sometimes called Web3 games or NFT games — are video games that utilize blockchain technology in a similar way to crypto currencies. This close tie-in with the tech has allowed players to earn crypto as they play, while also supporting the presence of NFT trading in various forms and the whole play-to-earn structure that comes along with that.

But before we get ahead of ourselves, let’s answer a question some of you may have on your minds: What is blockchain? Let’s take a look.

What is blockchain?

As previously mentioned, blockchain technology was created to record information digitally about crypto currency transactions. It can be thought of as a database or ledger that records information accurately and efficiently. The name “blockchain” comes from the structure of how it stores data; they are stored in chunks, called “blocks,” that can vary in storage capacity (usually dependent on the type of crypto it’s being used for), but once filled they are closed off from storing any more data and are then linked to the previous block. Any new data entered will start forming a new block after this point.

This data structure allows a completely accurate and transparent timeline of all transactions that took place on the blockchain, which is a major reason as to why NFTs are minted and traded on them. NFT owners tend to pride themselves a bit on the idea that they own a unique, digital item that is unlike any other, which is true, and blockchain technology helps prove the point by giving these NFTs their own unique identification numbers.

This is how blockchain games have started gaining popularity. By allowing the implementation of NFTs into their ecosystems, developers are now able to reward their players with unique, digital items that they are able to show off and use across many different NFT supported games. Additionally, their close tie-in with crypto currencies allows players to earn money while trading NFTs or simply playing these types of games.

How Can I Earn Money While Playing Blockchain Games?

Players earn crypto and fiat currency through playing blockchain games in a variety of ways, and this structure is often referred to as “play-to-earn.” Here are some of the most common ways players can earn while playing blockchain games:

  • NFT Trading: This may come as no surprise, but one of the most obvious ways players can earn money in blockchain games is by creating, minting, and selling their NFTs. Players can also find exceedingly rare NFTs as items or cosmetics from loot drops while playing these games, and can sell them for real money as well. This essentially means players can earn by just playing the game itself.
  • In-Game Currency: Many Almost all blockchain games offer a type of in-game currency for players to earn through playing the game. These currencies can then be traded for crypto or fiat rewards, but it may be wiser to hold on to them to buy other in-game items that can be traded for even larger rewards.
  • Renting/Lending: NFT owners can choose to lease out their NFTs to groups of players so that they may play the blockchain games these NFTs are based in. These groups of players, also called “guilds,” play these games together and split earned rewards, which is how the players can earn money in this setup. The owners of these NFTs these guilds utilize are sometimes called guild managers or guild leaders, and earn profit from renting out these NFTs to their guilds over time.
  • Breeding: Many blockchain games involve Pokemon-esque pets to be collected, traded, or commanded in a battle. Each of these unique creatures is considered an NFT, but they can also be paired to breed a new NFT, taking on various attributes of the “parent” NFTs. Essentially, the term “breeding” refers to the act of minting a brand new token to put into a Web3 game’s marketplace, which can then be sold for money.

There are other methods of earning crypto through blockchain gaming, but these are some of the more popular ones. As you can see, most of the ways players earn money in blockchain games revolves around NFTs, but you may be wondering what forms NFTs may take, in-game and out.

What are NFTs in Blockchain Gaming?

They take on many different forms in-game, and while their function is usually cosmetic, they sometimes offer other benefits. Here are a few examples:

  • Avatars: Many NFTs take the form of different base avatars, whether they are different characters you can play as in-game or something like a profile picture for your account. This allows for a high level of personalization, and uniquely created NFT characters will most likely carry over their looks into other NFT supported games, so owners can show them off in different contexts.
  • Minigames: In many cases, games and minigames themselves can be NFTs. Many metaverses allow blockchain game-creation tools that will allow you to create minigames using their infrastructure. You can then sell and trade these games on NFT marketplaces, or buy one for your own!
  • Cosmetics: Similar to owning an NFT avatar, you can also own various cosmetics that will change the look of what your avatar is wearing, whether it is their clothing, armor, weapons, etc. These items will also carry over to other blockchain games as they are developed, so unique or rare cosmetics you find/earn can potentially be with you for a very long time.

The Bottom Line

Blockchain gaming, though relatively new, has clearly carved out a permanent place for itself in the traditional gaming sphere. As the technology develops, NFTs will become more and more commonplace in games, as will their usefulness and functionality.

This might raise some concerns for hesitant players who have heard about the potential environmental harm NFT transactions can cause, or that they are a money-making scam. Though both of these were true to some extent, developers have since then taken steps to right these wrongs with green NFT sourcing and increased transparency with their communities.

Still curious about blockchain gaming? Visit https://www.kongregate.com/ for more information.