Category: Technology

What better way to motivate people to adopt a technology than by making it fun? Blockchain gaming is a compelling use case for distributed ledger technology. As the gaming and esports industry continues to grow, there are big opportunities to encourage more people to buy in-game items and build peer-to-peer marketplaces around them.

In many online games, gaming companies store in-game purchases on centralized servers. This leads gamers to question who really owns these assets. Gamers don’t fully own the virtual assets they purchased and they can’t sell or trade assets outside of the game. Using the blockchain to store items and characters enables decentralized and transparent asset ownership and will allow gamers to exchange them p2p, or exchange them for assets on other games.

Blockchain technology is changing different industries and the $100 billion gaming industry is no exception. Blockchain is here to change many aspects of video games that billions of people around the world are playing.

Virtual asset market

One of the benefits of blockchain technology in gaming is that it will increase the value of these virtual assets. By making digital in-game purchases rare and unique with cryptography, the community of gamers will create a virtual asset market. Some of the ways DLT will do this is by:

• Providing gamers a way to use virtual items in and out of games will increase their value.
• Creating platforms that will allow a gamer to sell the items for fiat will also increase their economic value.
• Building a healthy marketplace for items will increase their social value.

All of this will change the name of those items from virtual items to digital assets.

Security increase

In traditional games, virtual items ownership and trading was not possible. Gamers used to work hard or pay to get rare and expensive items that counterfeiters copy later, leading those assets to drop in value. Blockchain will address that problem since it can stop the trade in counterfeit virtual assets on the black market.

It will also stop the illegal acquisition of keys by creating a decentralized and immutable ledger where users can store items and determine what belongs to whom. This will make duplicating the items impossible. It is the same principle of cryptocurrencies where the main purpose of the blockchain is to prove immutable ownership.

Faster Payments

Blockchain will make the purchasing of items and games faster and will ensure the payments are secure. Developers face many issues selling their software outside of app stores, which leads to huge commission fees and loss of control over the customers. Additionally, blockchains enable micropayments which allow developers to receive direct payment and enable them to make a larger profit margin.

ESport use cases

Electronic sports are gaining in popularity recently. Virtual tournaments centered on video games are no more just for fun and it is becoming a lot more serious sport with a huge number of spectators.

With the rise of eSports, interest to apply the powerful blockchain technology to it increased as well. Electronic sports will grow into a $1 billion industry in 2019 and will likely exceed major league baseball by number of viewers by 2020.

With this increasing popularity, new gaming celebrities are emerging and are contributing to the growth of this industry through their videos and streaming channels.

One of the best-known gamers is Tyler Blevins, more known by his online name Ninja. He is a Youtuber and Twitch streamer. As of May 2019, he is the most followed streamer on Twitch with more than 14 million followers and an average of 40,000 viewers per week. So just like in traditional sports, fans follow their favorite eSports personalities.

However, despite the growth and popularity of eSports, it is still facing some challenges especially when it comes to the establishment of eSports teams. Even though there is a big number of professional gamers, finding and tracking these gamers ranking and progress remains difficult.

To make a comparison, there are around 100 professional teams for the most popular eSport game in the world, League of Legends, while there are about 300 thousand football teams worldwide. The main reason for this small number is that it is not possible to track and contact good eSports players.

So establishing contracts, coaches, managers for eSports teams and gamers is a hard, time-consuming, and expensive process.

For the eSports industry to expect to reach its potential and grow to come close to sports like soccer, it needs to apply new technologies that have the potential to accelerate its growth and this is where the blockchain technology can come in.

Companies making a difference

One company that offers a flexible, free platform for creating, integrating, and scaling blockchain-based gaming assets is Enjin Coin.  It announced via its Medium page in March 2019 that it is going to launch a Testnet version of the Unity SDK. The SDK will allow users to integrate a robust suite of blockchain-based ERC-1155 assets into their games.

D Another company solving the problem of financial transparency in eSports is DreamTeam. They are providing an all-in-one platform that will allow gamers to find teammates, manage teams and earn money from competitions. The platform was launched in 2017 and since then it has acquired 1.3 million individual users. It connects gamers, sponsors and professional competition and is offering gamers the opportunity to apply to professional, semi-professional or amateur eSports teams with a more than 60% chance to get lucrative deals, receive prize money and set their salary.

Tron is also one of the most advanced blockchain projects. Tron is the standard for blockchain-based video games. Due to its potential for high scalability, it is becoming the go-to project for blockchain game developers.

Blockchain games

Starting with some history. Blockchain gaming started around 2013 with games such as HunterCoin but we had to wait until late 2017 for the general public to start paying more attention to blockchain gaming after the launch of Axiom Zen’s CryptoKitties.

CryptoKitties allows you to collect, breed and trade virtual cats on a market place. One Kitty sold for more than $170,000. As the game gained in popularity, it reached an all-time high in the number of transactions on the Ethereum network and famously crashed the network in December 2017.

The game operates as a non-fungible token (NFT) on the Ethereum network which is unique to each CryptoKitty. So each CryptoKitty is unique and owned by the user and its value can increase or decrease depending on the marketplace.

In October 2018, the game reached 1 million cats being bred with a volume of 3.2 million transactions on its smart contracts. It has processed more than $12 million in sales on its marketplace. There are other games as well that are gaining in popularity such as World of Ether on Ethereum, EOS Knights on EOS, Epic Dragons on Tron and many others.

Blockchain gaming gameplay

Most computer gamers find that the gameplay is still limited but the games are evolving and many game developers started giving more attention to blockchain games. Like Ubisoft that is planning to launch a blockchain based game called HashCraft. It is still in very early development, prototype form. The game is an experiment in what the future of gaming could be and it is inspired by famous games such as Minecraft and Fortnite.

The team behind it is led by Ubisoft’s Blockchain Initiative Manager Nicolas Pouard who is also a founding member of the Blockchain Game Alliance. The team spent the last year building the prototype and demonstrating it and Pouard says he had been shocked by how the public reacted to it with many gamers and journalists asking about when the game will launch. While the game itself is not quite ready for full release, it is pushing the boundaries of what was previously thought possible.

Conclusion

Blockchain technology has risen in popularity in recent years especially after bitcoin reached its high peak of $19,783 in December 2017 but it’s still far from mass adoption. Many believed that financial applications would lead to mass adoption. However, blockchain gaming may be the catalyst instead. The gaming industry and eSports are constantly growing in popularity and it has a proven history of being the catalyst for the adoption of new technologies such as artificial intelligence, virtual reality, and augmented reality. Blockchain technology is similarly likely to resonate with end-users through the value it brings to gaming communities. As more people enter and engage with others through online gaming communities, blockchain technology offers a way to tap into a billion-dollar market.

Knowing your target audience is important to launch a successful dApp. With any dApp blockchain technology should form the basis of a product and deliver utility to end-users. So many blockchain application development projects so far have focused on the buzzwords and not on how the product will actually work. When people ask me about their dApp, they want to know why they haven’t seen much user adoption. I often have to list some of the things that could have made their blockchain application development project more profitable.

When users buy your tokens, they become part of the project in a similar way that shareholders become part of a company. Therefore, it’s important to have the interests of all actors aligned with similar goals. In this article, I will present 6 reasons why projects lack user adoption and ways to do it differently.

The dApp is unusable

Creating a profitable dApp blockchain business is all about finding the right product/market fit. Launching a product that your users will like for what it is and not because of the technology behind it is critical. After all, few really care about how services such as Paypal work under the hood.

All that matters in blockchain application development is that the product works and that it’s convenient to use in the end. Adopt this approach when dealing with any new technology, but blockchain especially.

Don’t assume that your users will know how to use MetaMask, or MyEtherWallet. The customer experience must be as smooth as possible, to remove as many barriers between the company and the customer. Good UX design also goes a long way to improving usability and building trust in any dApp

Every operation that requires an active behavior from your users (token sale, airdrop, interaction with the platform) should be an opportunity to educate them. A resource center where users can find small videos and/or presentations to guide them through your platform is essential to success.

The tokenomics model is not sustainable

Usability aside, token supply and demand play a huge role in the success of any blockchain application development project. Most dApps have a native token. Since the token — in theory — gains value, it’s important to design an economic system involving the token (tokenomics)  that will regulate that value.

Usually, blockchain application development projects choose a deflationary model inspired by bitcoin. In the bitcoin model, there is only a fixed set of tokens in existence and because of that, the price of the token will go up. 

However, this system only works for projects that aim to use the token as a store of value — as digital gold — not as a utility for the dApp blockchain platform. If we compare the storage of value effect and the utility effect of a token, there’s clearly a divergence of interests between users. Some want to use the token and thus don’t want its price to fluctuate. While others want to speculate. Since most projects are based on a utility token, the deflationary model alone does not work.

Some projects use an inflationary model, this model reflects real-world monetary systems. While this is very complex to design and set up, it brings unique advantages. One of the most famous blockchain projects implementing inflationary tokenomics is STEEM.

Carefully designing the right tokenomics model for your blockchain application development project is a crucial step that will contribute to the longevity and the economic stability of your project. Do not underestimate the importance of a well-thought tokenomics.f the token price drops to zero, the project is dead.

No one can find the token on exchanges

Once the blockchain application development is over, it’s time to list on exchanges. Centralized exchanges are big actors in the decentralized landscape. As strange as it sounds, the activity of an exchange (even a crypto exchange) is highly regulated and people have been fined and shut down for running illegal exchanges.

High listing fees and tough conditions are typical for the major players. This tremendously complicates the listing process. In order to list your dApp blockchain token with big exchanges such as Kraken or Binance, you need to have a large community and plenty of funds. If you go for smaller exchanges, users might find it difficult to use their platform and to find your token. Listing on smaller exchanges also means less liquidity.

One of the suggestions that we have is to look for alternative ways of distribution. There are different ways of distributing a token without going through exchanges. For example, airdrops, private shops, and atomic swaps are all solutions that can help consumers access tokens.

The dApp attracts the wrong crowd

Many entrepreneurs, not specifically in the blockchain industry, fail to grasp the importance of attracting the right users. They’re fooled by the lofty promises of a network effect and feel compelled to attract as many users as possible. Regardless of who they are.

A quick glance at major dApp blockchain groups on social media reveals that the main topic of conversation is the price of the token. Of course, this is usual in the crypto community. But should the price-obsessed be the main target of your platform?

At its core, there is a chasm between the interests of users who want to spend your token and the users who want to hold it to make a profit.  Since your goal is to drive mass adoption of the platform, you shouldn’t target the crypto community specifically because the vast majority of its members only care about price.

If we look at how usual companies operate, the share price does not necessarily reflect how the company is doing financially. Companies like Tesla, Pinterest, Facebook do not (or did not for a very long time) generate any profits.

As opposed to companies quoted above, most blockchain projects do not have any products because they focus on the price of the token rather than building one.

The reason why internet companies have value is because of their users. User adoption is the most important metric out there. A quick look at DappRadar can show that most dApps have no more than 50 users apart from airdrop groups.

If you target users in the crypto community, yes you’ll have some traffic, yes you’ll give the impression that your project is hot. But as soon as the selling window of your tokens expires, those users will simply switch to another project.

Aside from the number of users, the quality of those users is a far more valuable measure. I always suggest my clients avoid only targeting users in the crypto community. Some of them just want to pump and dump. You want to build a sustainable decentralized business.

The airdrop was poorly organized

As explained in a previous article, airdrops can be your best tool as they can be your worst enemy. There ’s always a risk in attracting the wrong users to your profile. You don’t want to have your main communication channels polluted by a flood of “when exchange” and “when moon” messages.

On the contrary, you want to have smart users that are asking critical information about your product and engage with the community. If you do it well, a lot of the support can be performed by those same users who will educate the newcomers.

There are numerous mechanisms that can prevent users from selling their newly acquired tokens on the exchanges and causing a major drop in price while still benefiting from the exposure offered by the airdrops. However, you have to organize each airdrop in a unique way, tailor-made way. We at Espeo have a history of successful airdrops and will be happy to talk about your options with you.

The dApp does not have a clear competitive edge

Before you start a blockchain application development project, ask yourself: What is my edge, what is my unfair advantage?

Time has passed where you could simply copy an ICO website, quickly write a sloppy white paper and expect to raise $20 million. If you want to make it, you need a strong value proposition. What is your value when you’re literally using the same pitch as 100 ICOs before you, what is your edge when you develop the 10th KYC on blockchain solution that will change the world?

Building a strong project takes time, efforts and resources. Creating a fancy website, adding some animations, and hiring content writers to produce “sales-y content” is pretty easy. But what’s your edge on your competitors? What will drive the users to come to your platform, apart from the tech?

A dApp blockchain platform has to actually create value for end-users. This can get very complex and it requires an extra mile of work. It may also require a second-layer of reflexion regarding the goal and project architecture. Yes, it takes more time, but it’s worth it. We always forget the time spent on a project, but the value of a project remains. And that’s where Espeo stands for.

Our team of experts can help you strengthen your projects by understanding the technical challenges that you’ll face as tech entrepreneurs. We can help lead you toward a profitable blockchain business.

Conclusion

As already mentioned above, many dApps lack a basic proof of concept. There are a lot of new concepts, and indeed a lot of nice investor pitches. However,  there are very few established prototypes.  For any successful dapp blockchain technology has to actually benefit end-users. Fixing this is already something that will set you apart from your competitors.

After, all technology is a tool. But how people adapt and react to technology has not changed. This is why it’s crucial to think about the way you target your users and how you present the product. People react to what you say. If you create a project that’s simple to use and solid economically you’ll have no problems finding the right users. Before any blockchain application development project, follow a few of these tips to launch a great product the market actually needs.