Developers are Utilising Ethereum For Video Games

By James Gray·31 July 2017·3 min read

Key Points

Bitcoin's proof-of-work architecture creates permanence through its mining consensus system, and the immutability this generates has proven valuable far beyond finance—supporting applications in ident

Bitcoin's proof-of-work architecture creates permanence through its mining consensus system, and the immutability this generates has proven valuable far beyond finance—supporting applications in identity verification and record management. The gaming sector has emerged as an intriguing experimental frontier for leveraging blockchain's core properties: transparency and built-in scarcity that users can genuinely control and own. Since multiplayer online gaming's inception, secondary markets for in-game assets have flourished organically, driven by sustained player demand despite widespread developer resistance and prohibitions. Research conducted across three separate studies between 2005 and 2009, examining online gamers, documented that 20 percent had engaged in trading digital items for actual currency. Today's virtual goods commerce space generates valuations that currently exceed $15 billion. A fundamental tension in traditional in-game economies stems from developer gatekeeping: they maintain absolute control over which items exist and how scarce they become. This power dynamic played out dramatically with FIFA Online, which claimed the position of South Korea's second-most-played online title. When Nexon, the publisher behind the title, rolled out FIFA Online 2, they distributed items that thousands of players had spent vast sums acquiring—sometimes tens of thousands of dollars. The community response was explosively negative.

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This July, HashRush's development team disclosed plans for a blockchain-based real-time strategy game with built-in cryptocurrency incentives. Running on top of Ethereum, the game rewards players with tokens tied to the network's native infrastructure. The team articulated their vision with the following description: "At its heart, Hash Rush is an RTS game — the goal is to conquer the galaxy, by building, maintaining and expanding your colony. But what makes Hash Rush unique is its focus on cryptocurrency mining. Once you got a hold on some Rush Coins (Ethereum-based token), you can use them for in-game transactions. Spend Rush Coin to upgrade your colony, fend off natural disasters or create more miners — it's your choice." The development team envisions eventually accommodating millions of concurrent players simultaneously, though this objective depends critically on Ethereum's technical infrastructure scaling proportionally.

Despite its multi-billion-dollar market capitalization and the $1.5 billion that initial coin offerings have raised in just the past two years, Ethereum has yet to host a successful, mainstream decentralized application. Observers attribute this partly to the limited contemporary adoption of cryptocurrencies themselves, reflecting this nascent stage of blockchain development. Coinbase co-founder Fred Ehrsam tackled the scaling question head-on in a comprehensive research report, concluding that Ethereum would require roughly hundredfold capacity gains to support an application with 1 to 10 million active users. "Dapps can't run solely on chain and likely never will. They need off-chain scaling solutions. While it's tricky to make accurate estimates when combining scaling improvements, it's conceivable we could see a 100x improvement by the end of 2018, which would allow a 1–10m user app. Scaling is multidimensional. Different methods address different things," Wrote Ehrsam.

A previous version of this article incorrectly suggested that Ethereum's planned transition to proof-of-stake would hamper HashRush's operations. This assessment proved inaccurate. In practice, the game permits its users to direct their mining operations toward multiple distinct blockchains, including Ethereum, Ethereum Classic, and Zcash, thereby offering meaningful operational flexibility and choice.

MiningPool content is intended for information and educational purposes only and does not constitute financial, investment, or legal advice.

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