What is a Blockchain Game: An In-Depth Overview

Last Updated:
May 19, 2023
What is a Blockchain Game - Feature Image

To many, the term "blockchain game" might seem like a buzzword or another fad, but it's much more than that. Let's dive in to understand what a blockchain game really is. Let's dive in.

Blockchain technology, since its inception, has evolved far beyond just cryptocurrency and finance. One area where its impact is growing exponentially is in the world of gaming. To many, the term "blockchain game" might seem like a buzzword or another fad, but it's much more than that. Let's dive in to understand what a blockchain game really is.

Blockchain - A Brief Primer

Before we delve into blockchain gaming, it's essential to have a basic understanding of what blockchain is. Blockchain is a type of distributed ledger technology that securely records and verifies transactions across multiple computers in a network. 

This technology is decentralized, meaning that no central authority controls it. Instead, it's maintained by a network of computers (or nodes) working together.

Understanding Blockchain Games

So, what exactly is a blockchain game? In simple terms, a blockchain game is a video game that incorporates blockchain technology in its fundamental design. This technology enables novel ways of creating, owning, and trading virtual assets, and can also provide a transparent and fair system for in-game economics.

Blockchain games differ from traditional video games in several key ways. The most significant difference lies in how they handle in-game assets. In a traditional video game, all assets - whether it's a magical sword, a virtual pet, or a piece of land - are controlled by the game's developers. They can be changed, removed, or rendered worthless at any moment.

In a blockchain game, on the other hand, assets are tokenized and owned by the players themselves. These digital assets, often referred to as Non-Fungible Tokens (NFTs), are unique and can't be replaced with something else. 

This means that if a player earns or buys a digital sword in a blockchain game, they truly own it. They can keep it, trade it, or sell it just like a physical object in the real world.

Benefits of Blockchain Games

There are several advantages that blockchain games offer over traditional video games. The first and most obvious one is true ownership. As we've already discussed, players can own, buy, and sell their in-game items. This creates a new type of economy within the game world, one where players can potentially earn real-world money.

Another benefit is transparency. Because of the nature of the blockchain, all transactions and ownership details are publicly available and verifiable. This can prevent fraud and provide a fair system for all players.

Lastly, blockchain games can facilitate interoperability between different games. This is because the digital assets in these games are tokenized on a standard format, typically the Ethereum ERC721 or ERC1155 standards for NFTs. This means that a digital asset from one game could potentially be used in another game, creating a shared universe of sorts among different games.

Examples of Blockchain Games

There are already numerous examples of successful blockchain games. One of the most popular is "CryptoKitties," a game where players can buy, breed, and sell unique virtual cats. Each cat is an NFT on the Ethereum blockchain, meaning that it is unique and owned by the player. CryptoKitties became so popular that at one point, it congested the Ethereum network.

Another well-known blockchain game is "Decentraland," a virtual reality platform powered by the Ethereum blockchain. In Decentraland, players can buy land, build structures, and interact with other players. All assets in the game, including the virtual land, are NFTs owned by the player.

Challenges and Future of Blockchain Games

While the concept of blockchain gaming holds massive potential, it's not without its challenges. The most significant of these challenges is scalability. The first-known blockchain game, CryptoKitties, suffered from this problem when it was so successful that over 30% of Ethereum transactions were due to the game, resulting in slow transactions and increased gas fees​​. This challenge extends to newer games as they attract more players, potentially leading to slow transaction processing times, increased costs, and slow gaming speeds​2​.

To address this, developers have proposed several solutions, broadly classified into Layer 1 and Layer 2 solutions. Layer 1 solutions involve redesigning the base protocols of blockchain networks to allow for throughput, cheaper transaction fees, and energy efficiency, a typical example being Ethereum's proposed upgrade to Ethereum 2.0​3​. Layer 2 solutions involve the use of a secondary chain linked to the main blockchain, allowing games to scale further​4​.

A clear example of a Layer 1 solution in action is seen in Alien Worlds, a popular game built on the Worldwide Assets eXchange (WAX) Blockchain. WAX uses a redesigned consensus mechanism that is more than 125,000 times more efficient than Proof of Work (PoW), enabling it to process over 15 million transactions daily, accommodate over 300,000 daily users, and consume less than 0.00001% of the energy of PoW chains​​.

On the other hand, the Binance Smart Chain (BSC), another Layer 1 solution, is used by Mobox: NFT Farmer, one of the most successful blockchain games of the past year. The BSC combines Proof of Authority (PoA) and Delegated Proof of Stake (DPoS) mechanisms to provide a highly scalable blockchain network, offering lower transaction fees and faster transaction completion times than Ethereum​​.

For Layer 2 solutions, a notable example is Ronin, an Ethereum sidechain developed specifically for Axie Infinity, arguably the most popular blockchain game. When the number of players increased, leading to slower transactions and higher Ethereum gas fees, the developers decided to build Ronin to ensure fast, seamless transactions with reduced transaction fees​.


In conclusion, blockchain gaming presents a new frontier for both the gaming and blockchain industries. With unique benefits such as true ownership, play-to-earn models, and the potential for increased transparency and fairness, it's no surprise that this sector is rapidly growing. 

However, as with any nascent technology, there are challenges to overcome, particularly in terms of scalability and user experience. 

But as we've seen, developers are actively working on innovative solutions to these challenges, and the future of blockchain gaming looks promising.