Like Gig Economy, Crypto Gaming Is Sold With Promise of Convenience and Riches. In Practice It’s Deeply Exploitative - world cultures

Like Gig Economy, Crypto Gaming Is Sold With Promise of Convenience and Riches. In Practice It’s Deeply Exploitative

Video games are increasingly incorporating blockchains, decentralized databases that support cryptocurrencies, as well as NFTs and other “digital assets.”

New games are emerging explicitly to support blockchain technology, while traditional games are being updated to include blockchains.

As of October 2021, “crypto games” accounted for more than half of the blockchain activity during this quarter. Meanwhile, the Treasury investigation has led to consumer groups calling for regulation in the cryptocurrency market.

Crypto evangelists say that blockchains are the future of gaming, and crypto games herald “Web3” – the so-called next iteration of the Internet built on blockchain technology. How true are these promises? How Video Games Use the Blockchain The rise of crypto games roughly coincides with the rise of the Ethereum blockchain, which was launched in 2015.

Ethereum emerged as a platform for building and hosting decentralized applications (applications designed to run on a blockchain, rather than a individually owned computer network), as well as ownership of the digital assets within those applications.

Video games have a history of developing virtual economies. Games like World of Warcraft and EVE Online – where items are bought and sold for virtual currency – have become a common test case for these Ethereum features.

The Promise of “Value Retention” A common paradigm in crypto games is to include two types of tokens. The first is the governance code, which generally allows players to have a say in the management of the game, and in some cases a stake in its revenue. The other is the utility icon, which is used to perform certain actions within the game.

Game assets (such as a sword or e-sports e-commerce card) can also take the form of non-fungible tokens (NFTs), with each token represented on the blockchain.

It is common for NFT tokens and governance tokens to double as speculative assets that can be bought and sold via crypto exchanges, or NFTs. But it is doubtful whether it has any fundamental value. Many game codes are volatile at best and worthless at worst.

However, fans of crypto games are trying to sell it as the future. Take, for example, venture capitalist and Reddit co-founder Alexis Ohanian, who says crypto games will allow players to “earn real value” through accumulated assets that have some value in traditional or “mandatory” money.

In essence, he says, people will no longer need to “waste time” playing for leisure. Advocates of crypto-games often do not understand why one might play games for no reason other than enjoyment or relaxation (or myriad other motives).

In the vision of crypto games, playing becomes an act of searching for “value” tokens, expanding the game to a 24/7 market that pressures players to constantly strive for profit. The marketing of all activities is the thing that has taken a lot of crypto games and cryptocurrency to a halt on a larger scale.

The idea of ​​value retention is also framed in terms of better rewarding developers and fans for making and playing games. On game distribution platforms like Phantasma, developers deposit a certain amount of the platform’s cryptocurrency in exchange for hosting their game.

But it’s hard to see how this differs from the current model, where distributors charge a flat fee. In fact, hosting versus cryptocurrency is arguably more problematic when you consider that token prices are subject to fluctuations.

Some people, including Web3 advocate Greg Eisenberg, believe that games that support blockchain may redistribute some of the revenue that game companies made to gamers.

Players create value for these companies through practices such as “modification” (which refers to modifications and other activities within the game), and even by contributing to the culture of the game.

Isenberg and others claim that the blockchain will provide a reliable record of player contributions, and thus help establish a wage base.

Isenberg tweeted: “Activision Blizzard has been sold for $70 billion (~Rs 5,42,215 crore) today and the community will see $0 of this.

Playing for Profit: The most common pitch from blockchain gaming projects is that “if tokens are valuable, then play itself can become a form of business.” Players can “play to earn” (commonly referred to as “P2E”).

The best known example is Axie Infinity, a Pokémon-style game where playing tokens (at least at some point) has a high cash value.

In a podcast on P2E gaming (hosted by venture capital fund Andreesen Horowitz, who has invested heavily in it), Gabby Dizon, co-founder of the P2E Games Syndicate, claimed that P2E was “a way to escape…economic hardship”.

Like the self-employment economy, P2E promises convenience, flexibility, and prosperity at a time when immersion is widespread. Also, like the temporary job economy, it is very exploitative in practice.

As was recently reported, Axie and other companies like it have a setup where players must purchase expensive NFTs before they can even start playing and participate in the P2E model.

A common trading tactic among some wealthy investors is to rent out Axies (which are related to NFTs) and take a portion of whatever money players make, many of them from developing countries like the Philippines. Results? All but the best players earn less than the minimum wage.

Industry responses Some traditional game developers have embraced blockchain. Last year, French gaming giant Ubisoft launched its own crypto gaming platform called Quartz.

Others were hesitant. Major distributors including Valve have rejected blockchain, while Epic Games have adopted it under strict conditions.

Many independent game developers rejected it, saying that blockchains (especially NFTs) are scams that have a catastrophic environmental impact, and exacerbate the negative effects of capitalism.

The crash in the cryptocurrency market earlier this month caused most crypto-gaming tokens to lose their value. However, this did not prevent strong investment.

Most importantly, the ups and downs of the crypto market do not affect the underlying issues in the value proposition of crypto games.

While blockchains and Web3 are seen as an investment opportunity by big tech companies and investment funds, ordinary people continue to be scammed out of their money.

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