While both categories often get mixed together, they are very different. Actually, to say that both are the same is like comparing a Pinball machine to a modern MMORPG. Here is the reason why.

Software developers don’t have as many tools as you might think to build video games for consoles, PCs, tablets and smartphones. Nor do they have a special tool that can be used in all the fields. However, the video game developer tool family has just got bigger – and it is a direct result of the invention of blockchain technology. For a lot of experts, it is the beginning of a completely new gaming trend.

How crypto games work

Crypto games provide the gaming community with a new way to earn rewards for their time spent playing. Some enable the players to earn a unique currency, which only exists in-game, others reward existing tokens such as Bitcoin or Litecoin. 

With the currency earned, players can buy items, characters and other valuable goods. The moment the players recognize the value of the currency in-game, it becomes a tradeable good in the real world. It can easily be traded for other cryptocurrencies – just like Bitcoin.

One of the most obvious benefits of using cryptocurrencies in-game is their use as fast and secure payment networks. These payment benefits are especially useful for eSports and providers of online casinos.

In addition crypto games are not limited to rewarding the gamer with crypto based currency. There are many types of games right now which offer new creative reward systems.

For example the so-called ‘pay to play’-games. These have become quite popular and more and more games that are based on this model have been released in the past few months. Players are required to make an initial purchase in order to get a certain character or at least an item to play the game.

Another game genre that heavily relies on its reward system based on cryptocurrency is mining games. Players of such games receive coins for generating certain resources or finishing activities. Finally there are of course free-to-play games, which you can start playing straight away.

How blockchain games work

Exchanging in-game items has become a lucrative industry. Up to now, experts estimate it’s worth about $50 billion and there is no sign that it has reached its peak yet. It is worth noting that the exchange of in-game items is not only lucrative for big video game series such as Call of Duty or Counterstrike. It is also a common concept in the small but popular field of blockchain based games like CryptoKitties.

While games are normally intended to be played on a centrally controlled server, in blockchain games digital goods are distributed between all the players. Even if this does not look like a great game-changer at first, it can have a huge impact on gaming itself. In fact, there are a lot of ways to utilize blockchain technology in video gaming.

Games which use a centrally controlled server, rely on the database of that server. When hackers successfully attack a centralized game, they can steal the belongings of the users. This is not only fatal to the single user who loses everything but also for a company that could not secure their system.

With a payment mechanism based on a blockchain, this is not possible. Every player has a complete list of all transactions. Consequently, each participant – or the whole network – can easily identify manipulation of a single database. In other words manipulating the data at a single point is easily detectable.

When a player wins rounds, stages, levels and competitions, the reward will be coins, gems, and other shiny collectibles. These signify their ‘level of worth’. Like in-game currency, they are a common target of attacks. Blockchain technology can help manage this backbone function.

Completely decentralized games

There are also some applications of blockchain as a game. The first so-called DApp-game is LiteBringer. Even the famous CryptoKitties, that allows players to purchase, collect, breed and sell various types of virtual cats, is technically not a true blockchain game. While the blockchain stores the genes of the cats, a centralized server generates the artworks and descriptions. Consequently, a client cannot display the cat without the server.

A game is only fully decentralized when its infrastructure is exclusively built on blockchain technology. This type of game follows blockchain principles. This means, most of the time every move you do is irreversible and you will have to send a transaction to the network where some fee occurs. Such a game is playable using Metamask, a browser extension.