Video games as a form of entertainment have existed for more than half a century. The first commercially successful arcade machine, Pong, celebrates 50 years this year.
Compared to this, crypto gaming is a whole new field. It started in 2021, with a chain of events: the rise of NFTs, the popularity of Axie Infinity, the rise of blockchain gaming, Zuckerberg announcing Meta, and the rise of the metaverse.
Since the field is still young, there is still a lot of confusion. And one area of differentiation comes with an understanding of the following: Play-to-Earn, Blockchain Gaming, GameFi, NFT Gaming, Metaverse, Web3, and Web 3.0.
The “chicken or the egg” dilemma: What are NFT games?
According to some sources, including Wikipedia, the first widely known crypto game was CryptoKitties. His main goal was to collect NFT cats and breed them to get more and more unique and rare species. I know, it’s not enough gameplay to be exciting, especially knowing good examples from the Tamagotchi-type games collection, like Neko Atsume.
However, the purpose of the first NFT games, including CryptoKitties, was to use blockchain technology in the field of gaming. It was the first game where you could have your characters as NFTs and transfer them to other platforms, like marketplaces. However, pioneers are not perfect.
Also, the idea of the blockchain, which NFT games were built on in the beginning, was created by Vitalik Buterin after he lost his character’s equipment after an update in World of Warcraft. He understood that the developers could easily take away the “sweat and blood” digital items if the project is highly centralized.
Therefore, non-fungible token (NFT) technology, which provides “true” ownership, seems to be the most suitable for the field of gaming. CryptoKitties was solely focused on collecting and creating new NFTs. Furthermore, the logic of the game was completely based on blockchain technology.
Therefore, an NFT game is usually an idle game for the purpose of collecting NFTs.
Playing to win is not always about cryptocurrencies
Unlike early NFT games, it took a step away from being built solely on the blockchain. Yes, its gameplay was similar to NFT games at first. However, the logic of the game was no longer entirely on the blockchain.
Also, with the introduction of an internal crypto economy, the game expanded its earnings mechanics; Now, the way to make a profit is not only to breed Axies and sell them on a market, but also to grind internal coins, Smooth Love Potion (SLP) and Axie Infinity Shards (AXS), and exchange them for stablecoins within the internal decentralized exchange. Katana.
At this point, Axie Infinity became a “true” game of playing to win. So we come to the point where it is very important to mention one thing.
Play-to-earn is just a monetization model, not a game genre.
Many MMORPGs used fiat-based auctions or secondary markets, before the existence of crypto games. Technically, those were pure play to win. However, marketers of crypto gaming projects abused the term, thus it became associated only with blockchain.
In some cases, it even got negative connotations. For example, Steam banned all games that used cryptocurrencies, without even differentiating between games built entirely on a blockchain or using crypto as an addition to other game mechanics.
The term “play to win” comes from the names of other monetization models: free-to-play and pay-to-play. In turn, Play-to-Earn spawned its variants, such as Move-to-Earn, Sex-to-Earn, Learn-to-Earn, etc.
Crypto Gaming vs Blockchain Gaming: What is the main difference?
Without a doubt, crypto gaming and blockchain gaming seem to be the broadest notions to characterize the industry as a whole, as well as a single gaming project as its unit. Also, sometimes people tend to use them synonymously, which makes sense in some cases, but not all.
“Non-fungible” differentiates these two terms based on the level of their decentralization. For example, Decentraland is a blockchain game because it works like a DAO and allows for a high level of creativity, to the point of creating games within the game. On the contrary, Light Nite X only provides rewards in satoshis, being a centralized project in itself.
However, this approach is not as accurate when it comes to games that have something from both sides. For example, the Axie Infinity ecosystem includes Ronin (RON) solely as a governance token. However, what about Bomb Crypto, which uses its native token Bombcrypto (BCOIN) as its in-game currency and governance token?
When we come to such complicated ecosystems as Gala, which operates on both the Gala governance nodes and the Gala (GALA) cryptocurrency, but functions as a game development studio and as a game publisher for smaller studios under its aegis, its definition is unclear.
Considering the complicated nature of the field, let’s have a rule of thumb: “crypto gaming” is the broadest notion. Includes Blockchain Games, NFT Games, and all Play-to-Earn games with integrated crypto. As for “blockchain gaming”, it is still a broad notion, but it excludes completely centralized projects with little crypto and NFT implications.
For example, if Ubisoft ever integrated the NFTs released into Ghost Recon: Breakpoint, it would become a crypto game but not a blockchain game. However, there is the dilemma of calling a game “a blockchain game” if the logic of the game is based solely on the blockchain.
In my opinion, this no longer works. It became synonymous with crypto games: both DappRadar and Wikipedia consider them interchangeable notions. Also, the number of games built on the blockchain alone is declining.
What about GameFi?
Obviously, the term “GameFi” is derived from “DeFi”, which stands for “decentralized finance”. In the beginning, GameFi was called “DeFi based games”. After a while, GameFi became a popular keyword in Southeast Asian countries. A common trait of such GameFi projects was a team page with cartoon characters instead of real people. Therefore, the term had some negative connotations and did not find wide popularity outside the area, according to Google (NASDAQ:) Trends.
In general, GameFi combines three notions: DeFi, NFT and games built on the blockchain. Therefore, it can be used as a synonym for blockchain games. However, as I mentioned, it didn’t stick with American and European audiences.
Also, a Web3 company called “GameFi” adds fuel to the fire of confusion.
Let’s shed some light on the dilemma of the metaverse: Web3 or Web 3.0?
Although some people consider “Web3” and “Web 3.0” to be interchangeable, they are slightly different things. Web 3.0 is a concept of Semantic Web, provided by Tim Berners-Lee in 2006. This is the next step in the evolution of Internet development where meanings are understood by machines, hence semantics, rather than the structure of the data.
On the other hand, Web3 is a newer concept provided by Gavin Wood, co-founder of Ethereum and creator of . Web3 is one of the possible forms of evolution of Web 3.0, based on the concepts of decentralization and greater data security.
As for the term “metaverse”, it is too broad to be associated only with crypto. In fact, this is one of the iterations of the Internet that includes the use of mixed reality: augmented reality and virtual reality. The concept was widely used in science fiction and only in recent years has it been associated with blockchain and decentralization.
To sum up
- A crypto game is any game that includes crypto in any form: an in-game cryptocurrency or NFT technology. It can be centralized or decentralized.
- A blockchain game is a crypto game that includes some kind of decentralization: nodes, government tokens, etc.
- GameFi is a synonym for blockchain gaming, which is widely used only in Southeast Asian countries.
- Play-to-earn is just a monetization model. It was associated with crypto gaming only in the last couple of years.
- An NFT game is usually an idle game whose main gameplay is focused on collecting NFTs. In most cases, the logic of the game is based on the blockchain.
- Web 3.0 is a concept of the Semantic Web, contributed by Tim Berners-Lee back in the 90s.
- Web3 is one of the possible evolution paths of Web 3.0, based on the concepts of decentralization. It was coined by Gavin Wood in 2014.
- The metaverse is one of the iterations of the internet focused on AR and VR. What used to be called a metaverse in crypto media is a decentralized metaverse.
In the end, I would like to mention that there is no standardized terminology yet. Therefore, different sources may use these terms interchangeably. However, based on semantic derivation, this seems to be the closest differentiation to the correct one.
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