Headline: How to play games while earning cryptocurrency.
Date:
Body: For millennia now, people have done work (usually hard work) and gotten in return, some rate of monetary compensation. (“A good day’s pay for a good day’s work.” And all that). We are all quite familiar with this model, most of us engage with it every single day. If one is really lucky and works very hard, one can work out a career that does not feel like everyday drudgery. But, what if we change this model and get paid for playing games? Could we do this? Yes, we can, and some do. Welcome to the brave new world of GameFi. GameFi combines NFTs, and blockchains into online games. And, instead of paying for “in-game purchases” the player is instead rewarded (with a digital asset of some type) for the amount of time they spend playing the game. Confused? I was too. (At the start of writing, the only financial model I could understand is if players see a plethora of online ads constantly, or if they have to agree to become some sort of brand ambassador.) But, I will cautiously push aside this initial kneejerk response and try to understand. Perhaps you can too?
So, how does this all work?
It all started with cryptokitties. Then, slowly, other games of various types were added. As the players go further and further into these games, they will encounter a variety of NFTs, which they can earn in time playing the game. Then, once accrued, these NFTs can be traded at a marketplace or sold for digital currency. As they go, they will certainly come up with unique ways to combine attributes, and others will want these attributes in their character, or piece of land, or other asset. These new protocols can then be traded for NFTs, and the process can begin anew. Remember, all of this is built on a blockchain, so players can easily prove ownership of digital assets, and since this information is distributed, if there is one malfunction, the rest of the game is unimpaired..
OK, you had me at making money while playing games.
So, what do I have to do to get started. It’s as easy as 1:2:3, (isn’t it always?)
| Supplies Needed | Comment |
| Create a cryptocurrency wallet. | Coinbase offers a good wallet, but if you are a bit more advanced in your usage, MetaMask is often offered as an excellent (and very secure) choice. |
| Pre-fund your cryptocurrency wallet. | Many games have their own native currency, but many of these can easily be purchased in exchange for other cryptocurrency. Bitcoin and ETH are common types here. |
| Purchase starter items | Dungeons and Dragons is not a high-tech game, at all. Even here, though, you have to purchase a few things like module books, dice and little creature tokens. This can really add up, as can the purchases to start an online game. |
Are there some examples?
Yes, there are many examples. Just a few that caught my eye:
- Alien Worlds—In this game, the player goes into several foreign planets to mine and gather resources. The player can make money (TLM) by renting out their land to others. It has broken through the 1,000,000 monthly users level and works on a variety of blockchains. Before one can play, though, they must purchase several cards that give them the right to own land within the game.
- CryptoBlades—This is a role-playing game where you design the development of your character and craft unique weapons to help him or her. These weapons can then be traded at the marketplace. The player can make money (SKILL) by selling their unique weapons and armor. It has a monthly user base of just over half a million and works on the Binance blockchain. Players do have to pay a few fees to use the game.
- Axie Infinity—This is a game that allows you to create Pokemon-type characters as combinations of animals. As it involved the care of “animals” it is very time-intensive. When trained, these animated beasts can “battle” When created, these unique beasts can be traded to other users. The player can earn (AXS) and (SLP, smooth love potion) for doing quests and resource farming. Axie itself It has a monthly user base of over 300,000 users and runs on the Ethereum blockchain. Before you can play, you have to purchase 3 “Axies” from the marketplace. They surpassed $1 Billion in 2021.
Before we leave this topic, there is one more thing which is worth mentioning. There are platforms (like MOBOX) which feature multiple games wherein a player can migrate items from one game to another. These platforms are pretty sophisticated already, allowing people to earn money by “staking” and even joining liquidity pools.
How big are these, really?
In a word, BIG. There is a “holding company for games” called Yield Guild Games. In addition to hosting the games, YGG will also act to facilitate trading amongst players. Within the community itself, there are various roles called “scholars” and “community managers.” Each role gets a piece of the action as new creations are sold and traded. There are some people in the Phillipines who make 5-10 times the amount of money they made at a normal job, doing these roles within the game. Oh, and don’t cry for ther management either. The YGG Treasury is worth over $415 Million (This is the pot of real money they use to develop the game more.)
The Verdict
We are still in the very early stages of this phenomenon. Doubtless, as more and more people interact in this virtual ecosystem, we will better learn both the benefits and the potential pitfalls represented by these games. I have to wonder, though, if games like these are going to become the social media platforms of tomorrow. Instead of TikTok, you’ll check in on your friends within a platform within the gameplay. Wouldn’t that be fun? Copuldn’t that be profitable?
REFERENCES
https://www.coindesk.com/learn/gamefi-how-to-earn-crypto-playing-games-online/
https://www.nasdaq.com/articles/nft-based-video-game-helps-gamers-earn-crypto-while-playing-online
https://www.coinbase.com/learn/market-updates/around-the-block-issue-16
Editor’s Note: Please note that the information contained herein is meant only for general education: This should not be construed as Tax Advice. Personal attributes could make a material difference in the advice given, so, before taking action, please consult your tax advisor or CPA.