London, UK, 10 Aug 2021, ZEXPRWIRE, The gaming industry is growing with new tech. In the first half of 2021, 24 blockchain-video game companies raised $476 million in investment capital. This move reflects an innovative and creative future for gamers as more games are being developed that incorporate cryptocurrencies such as Bitcoin or other digital assets like Ethereum to build tokens into their gameplay systems–decreasing reliance on fiat currency while providing players with alternate ways to access video games without spending cash money.
Crypto gaming companies raised $235 million in Q2 2021 alone, a rise of 15% from the same quarter last year. Financial Centre Broker Michael Weber assesses the current situation and forecasts the growth of blockchain technology in the gaming world for years to come.
What’s The Reason Behind This Growth?
Well, blockchain tech has recently been adopted by some online game operators as an alternative payment method, and it is set to become an integral part of the gaming industry. There are also wider applications for the technology that could bring more players into crypto games, according to InvestGame data.
Cryptocurrency Startups Raised $5 Billion In Q2 2021 Alone
In total, cryptocurrency ventures have raised $5 Billion in funding so far in 2021, with 24 billion raised in the first half of the year alone. Last year, cryptocurrency startups raised $5 billion against a total of $6 billion for all of 2017.
The United States is still the largest market for this sector, according to InvestGame’s data, but unlike 2017 where it drew investment worth 40% of global outlays, the U.S. now accounts for just 24% of all funds raised by crypto startups in H1 2021.
Cryptocurrency’s impact on online gaming will be determined by its regulatory status and its ability to deliver low transaction fees and high speeds.
However, the FinancialCentre Broker Michael Weber also suggests that cryptocurrency will only have a real role to play in online gaming if it is deemed legal by the relevant regulatory authorities and given the green light to act as a payment method for online wagers.
Cryptocurrency has been making some serious strides in this area, especially with the recent announcement by U.S.-based casino platform Seals With Clubs that players can now use bitcoin cash (BCH) to fund their accounts.
If cryptocurrency can deliver on its promise of providing a faster and cheaper way for players to make online wagers, it is sure to have some impact on the gaming industry in the coming years.
However, even if it does succeed in becoming a popular payment method for online gaming, Weber warns that cryptocurrency could still have some issues to overcome.
Firstly, though the cost of using cryptocurrency is expected to be cheaper than other payment methods, transaction fees are not fixed and can change according to the size of the transaction – which has implications for high rollers, particularly if cryptocurrency transaction fees continue to rise.
Secondly, there is a danger that online games could be disrupted by the introduction of alternative decentralized exchange models designed to make it difficult for operators to profit from their work.
This potential problem has been highlighted in recent years by the release of the BCH-powered gambling platform DEXdice by the blockchain community Dash, which aims to make it easier for people to play online games without relying on a centralized operator. This could eventually pose a big threat to traditional gambling sites and crypto casinos if players prefer DEXdice’s model over more traditional platforms.
However, Weber also points out that this is unlikely to happen anytime soon because of the current lack of trust in cryptocurrency payments.
The company’s research shows that 85% of operators are still reluctant to offer bitcoin cash support, with only 15% doing so as per H1 2021. Just 2% of crypto startups actually accept BCH or other cryptocurrencies as a payment method for their online gaming products right now.
Weber says he expects that figure to increase over the next few years, with further regulatory clarity and some positive stories about crypto payments in the industry.
Criticism of Cryptocurrencies in Gameplay Systems
However, there are drawbacks to using cryptocurrencies as the only form of currency in games. The high volatility cryptocurrency market is a potential problem for investors, developers, and gamers alike. This unpredictability could cause players to lose their invested money quickly if they are not careful.
For example, in January 2021, Ethereum was worth $1300. As of July 2021, Ethereum was worth $200.
This high volatility makes it difficult for developers to balance gameplay systems appropriately in terms of rewards and penalties. The value of the currency used to pay wagers will fluctuate often and unpredictably between games played by different individuals. People who use their cryptocurrency wagers wisely may win large amounts of money, while people who are reckless might lose their entire bankroll.
It’s important for investors to determine a way to limit their loss when investing in cryptocurrency.
However, whether a cryptocurrency will eventually become an alternative payment method for online gaming or just become a small niche is still very much up in the air right now.
Disclaimer: Our content is intended to be used for informational purposes only.
It is very important to do your own research before making any investment based on your own personal circumstances.
You should take independent financial advice from a professional in connection with, or independently research and verify, any information that you find on this article and wish to rely upon, whether for the purpose of making an investment decision or otherwise.