How blockchain builds wealth in virtual worlds

Blockchain and crypto have several important roles to play in the development of virtual worlds such as gaming, VR, and metaverse environments. The worlds designed today have huge potential for creating dynamic, immersive user experiences. This includes in-game economics, secure marketplaces, NFTs, and virtual real estate. How does blockchain help with those interactive elements that are rapidly expanding from the real world, to virtual worlds? This blog takes a look at some of the most exciting ways in which blockchain is helping users build wealth, virtually.

Virtual reality, the metaverse, and gaming 

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The technology we have now would seem like the stuff of sci-fi fiction for those early gamers that played Space Invaders and Pac Man. Since the early gaming industry days on a television screen, consoles became bigger and bigger, then smaller and smaller. Much like phones, their processing power became larger and the hurdles to accessibility became smaller. Nowadays with the available game engines, rendering, and technology, gaming has become fully immersive. Gaming is all about that engagement - becoming part of the environment and feeling a sense of being transported somewhere else. 

Another arena we have seen the immersive world building and our imaginations matched to cutting edge technology, is the metaverse. The current virtual world is very different from what was conceived in fictional settings like the 1982 movie Tron. Since then, ‘virtual reality’ has been created from vibrating seats with fans and splashed water, to augmented and mixed reality technologies. Now, virtual reality gaming even allows users to fight, run, and engage with games in a way that they never had been able to before.

The addition of real-world currencies, economics, and ownership into the virtual world has been an often over-looked leap in the advancement. 

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Ownership and virtual economies

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In-game assets and associated economics bring ownership in virtual worlds to the real world. Traditional video games and virtual worlds have centralized control and ownership, meaning that no matter how much time and money is spent on acquiring in-game assets, players do not have true ownership. These assets can disappear or be rendered obsolete at the whim of the game’s developers. 

Games that utilize blockchain technology provide immutable ownership of digital assets. Whether that’s NFTs that represent ownership of goods, land, art, etc, or crypto coins that can be held or sold on crypto exchanges. Virtual land and real estate are good examples of this ownership and in-game economies. Anyone who purchases real estate in a game or metaverse owns that property outright, and with only a limited amount of virtual lands or real estate assets existing, demand is created and their value increases, allowing owners to generate wealth through selling, leasing, or developing their land. 

Blockchain-based virtual worlds typically operate with native crypto coins that power this virtual economy. These tokens can be used for transactions, ownership, or staking within the created ecosystem. These tokens can then be removed from the digital environment of the game and into the real world to be traded on crypto exchanges. 

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Non-fungible tokens

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Non-fungible tokens create unique, verifiable digital assets that allow for the kind of ownership and economies listed above. These unique digital tokens are stored on a blockchain and represent the ownership of virtual goods and several different assets in virtual worlds. These tokens are made secure by being stored on a decentralized blockchain, which means that they cannot be altered or deleted and are not managed by any one entity. Owners can buy, sell, or trade their virtual possessions within the game with no interference from the game developers. It’s also possible to create digital scarcity, by issuing a finite number of NFTs and giving them inherent value due to their limited supply, just as with the real estate example we previously touched on.

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Play-to-earn models 

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Blockchain-based games can implement play-to-earn models. This means that players earn crypto, or NFTs, by completing in-game tasks, such as winning battles, completing quests, finding objects, or progressing through levels. There are secondary markets or crypto exchanges where these rewards, with real-world value, can be traded. In this scenario, players truly own the asset earned and can trade or sell as they wish. This is all written into the smart contracts on the blockchain, which offers extra security and transparency for owners of these assets.  

This has represented a fundamental shift from traditional gaming economics, where there are no financial returns and no ownership outside of the game itself. Blockchain-based virtual worlds allow users to turn their engagement into income generation and allow for real-world trading and economic activity. These decentralized finance (DeFi) protocols such as lending, borrowing, and staking are all possible now within virtual worlds, and more and more are integrating DeFi services.  

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A virtual world of wealth

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Blockchain technology is allowing virtual worlds to provide wealth-creation opportunities. The inventive gaming and virtual worlds being released today are developing real value in digital spaces. Tokenized economies and secure digital ownership come together to empower users to participate in decentralized financial ecosystems that they may never have thought of before. Virtual worlds are not just for gamers, but even within this industry, the use cases are exploding. As virtual worlds continue to grow and evolve, blockchain will play an increasingly central role in shaping the future of digital wealth.

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