In 1996, Japanese video game developer Game Freak redefined portable gaming with Pokémon Red and Blue, companion titles that used tradable virtual creatures to merge digital achievement with a real-world sense of ownership and transaction.
Today, blockchain games represent a bold new extension of this type of gaming: full-fledged game economics. In this case, the “gotta catch ‘em all” mentality of the Game Boy age is applied to a network of decentralized collectibles and real-world payouts, and people are throwing an insane amount of money at these games.
Could Gamifying Blockchain Lead to Greater Adoption Overall?
Take CryptoKitties, for example. Fitz Tepper, the VP of Operations at Rally Rd, calls CryptoKitties “the digital version of Pokemon cards but based on the Ethereum blockchain.”
Since CryptoKitties’ launch in 2017, it’s already seen over $1.3 million in transactions. It became so popular so quickly that players began experiencing delays and long-loading times during gameplay. The reason? It accounted for about 15 percent of all Ethereum traffic.
Let the Blockchain Games Begin
There are numerous blockchain games that feature intuitive virtual marketplaces where non-fungible tokens (NFTs) commodify digital assets, adding legitimate value to in-game staking and swapping.
The growing communal experience has promising implications for blockchain as a whole, suggesting a future of innovative, cross-industry applications transcending cryptocurrency alone.
Blockchain gaming is positioned to signal a “sea-change” for the industry at large, balancing its past failures and increasing its potential for widespread adoption in the future.
Its impact is already being seen. The global gaming market was up to $159 billion in revenue last year and is expected to increase to $200 billion by 2023.
The Non-fungible token (NFT) market in the meantime already more than doubled in 2021 compared to the 2020 year alone (c. $400m), and it is expected to reach $3bn in size by 2022 already.
Learning from a Turbulent Past
Blockchain gaming has been around for longer than many are aware, and its mostly benign past is a byproduct of its initial flaws and complexities.
Early blockchain games suffered due to limited technology, almost nonexistent regulation, and archaic handling of wagers and payouts. The games also demanded considerable operational knowledge of cryptocurrency and blockchain.
Collectively, these factors repelled many would-be players, and many blockchain experts avoided discussing or investing in games as viable industry stepping stones.
Game Devs are Resilient and Pivot Quickly
However, game developers were resilient, adapting to rapid technological advancements and fine-tuning both usability and virtual infrastructure.
With Cryptokitties leading the way on the Ethereum network in 2017, blockchain gaming finally rose to prominence thanks to NFT personalization and the same collection elements that popularized Pokémon games, Beanie Babies, Tamagotchis, and other similar cultural phenomena.
Developers are now ready to harness this two-pronged appeal and redemand attention from industry analysts and investors alike.
Creating New Demand
The blockchain industry’s narrative shift has been, in part, serendipitous with a growing emphasis on immersive video game technology.
Now, NFT-based blockchain games have joined VR and AR titles in blurring the line between reality and digital environments, supplementing those experiences with a direct vein into real-life financial consciousness.
In establishing this niche, developers have created their own sub-demand tailored for a unique community of gamified NFT traders.
How to Map Token and NFT Success
“The success of these tokens and NFTs will ultimately depend on their usability and value to the gamer,” Adrian Krion, CEO of Spielworks, wrote in an article for Nasdaq. “Developers are essentially [now] able to construct their own economics and ecosystems, and connect with each other through them.”
In a broader sense, this newfound demand is a microcosm of blockchain’s versatility, which is key in communicating its potential.
Ever since “blockchain” entered the public lexicon in the late 2000s, it has been all but defined by its cryptocurrency capabilities. Using the cryptocurrency capabilities as its versatility measure is a cruel understatement when weighing blockchain’s potential impact on completely different sectors.
The Highly Successful Gaming Industry
Consider the current online gaming industry: a market that is highly successful, yet rife with hackers and fraudulent activity that threatens the integrity of communal gameplay.
While these actions are subject to existing vetting efforts, they could be theoretically eliminated when applied to an NFT blockchain. In turn, having gaming on the NFT blockchain could generate more activity on game servers, increase in-game purchases — and ultimately stimulate both the virtual and real-world economy.
Will the Play be Non-Hackable?
In this case, the mere suggestion of non-hackable assets paints a picture of a fully redefined industry.
The sophistication of such an action could be a harbinger of equivalent refinements in other industries — most notably on the basis of security or sustainability.
Learning New Lessons
While the above information is undoubtedly exciting, it comes with a major caveat: the current blockchain gaming industry, though vastly improved since the early 2010s, is far from infallible.
To prove its fluidity across industries, blockchain must first use its NFT games to showcase consistent self-innovation, scaling itself to match an influx of players and transactions.
Perhaps the biggest hurdle in this process is ensuring decentralization and security are not sacrificed for stronger performance.
One crypto enthusiast wrote that this so-called “trilemma” is the primary issue plaguing most up-and-coming blockchain games.
It often boils down to a difficult choice between security or NFT viability in tandem with efficiency. In order for blockchain to broadly garner adoption in separate industries, “all three characteristics, security, scalability, and decentralization must be resolved on the first layer,” he wrote. “And without any compromises or sacrificing any part.”
Who is Solving the Three-Prong Issue?
Luckily, prominent blockchain names are actively working to solve the trilemma by means of sharding and proof of stake (PoS) mechanics. Additionally, disruptive algorithmic tactics that strive to increase efficiency and scalability while upholding virtual security.
Time will tell if these efforts can stabilize blockchain for a larger workload, but for now, they remain a promising roadmap.
What’s more, developers are again proving their fortitude in keeping games fresh and accessible. Convergent NFT advancements have given way to a freer marketplace for players, which has spiked popularity via community building and transparency.
What Do Consumer’s Demand?
Consumers want more governance over their gameplay and are flocking to blockchain games that allow them to propose changes, suggest new digital assets, and recommend additional features in exchange for in-game tokens.
Such components are already attracting the involvement of big industry names like Ubisoft and Square Enix, highlighting blockchain’s growing credibility in corporate eyes.
Games are still acting as an industry proving ground, but they are closer than ever to catalyzing unprecedented change.
A powerful combo of gaming + blockchain + NFT + DeFi brings a whole new era to avid players where they can finally be not only a participant — but rather a full member of the game economy and its ecosystem.
Image Credit: florian olivo; unsplash; thank you!
Fintech Kennek raises $12.5M seed round to digitize lending
London-based fintech startup Kennek has raised $12.5 million in seed funding to expand its lending operating system.
According to an Oct. 10 tech.eu report, the round was led by HV Capital and included participation from Dutch Founders Fund, AlbionVC, FFVC, Plug & Play Ventures, and Syndicate One. Kennek offers software-as-a-service tools to help non-bank lenders streamline their operations using open banking, open finance, and payments.
The platform aims to automate time-consuming manual tasks and consolidate fragmented data to simplify lending. Xavier De Pauw, founder of Kennek said:
“Until kennek, lenders had to devote countless hours to menial operational tasks and deal with jumbled and hard-coded data – which makes every other part of lending a headache. As former lenders ourselves, we lived and breathed these frustrations, and built kennek to make them a thing of the past.”
The company said the latest funding round was oversubscribed and closed quickly despite the challenging fundraising environment. The new capital will be used to expand Kennek’s engineering team and strengthen its market position in the UK while exploring expansion into other European markets. Barbod Namini, Partner at lead investor HV Capital, commented on the investment:
“Kennek has developed an ambitious and genuinely unique proposition which we think can be the foundation of the entire alternative lending space. […] It is a complicated market and a solution that brings together all information and stakeholders onto a single platform is highly compelling for both lenders & the ecosystem as a whole.”
The fintech lending space has grown rapidly in recent years, but many lenders still rely on legacy systems and manual processes that limit efficiency and scalability. Kennek aims to leverage open banking and data integration to provide lenders with a more streamlined, automated lending experience.
The seed funding will allow the London-based startup to continue developing its platform and expanding its team to meet demand from non-bank lenders looking to digitize operations. Kennek’s focus on the UK and Europe also comes amid rising adoption of open banking and open finance in the regions.
Featured Image Credit: Photo from Kennek.io; Thank you!
Fortune 500’s race for generative AI breakthroughs
As excitement around generative AI grows, Fortune 500 companies, including Goldman Sachs, are carefully examining the possible applications of this technology. A recent survey of U.S. executives indicated that 60% believe generative AI will substantially impact their businesses in the long term. However, they anticipate a one to two-year timeframe before implementing their initial solutions. This optimism stems from the potential of generative AI to revolutionize various aspects of businesses, from enhancing customer experiences to optimizing internal processes. In the short term, companies will likely focus on pilot projects and experimentation, gradually integrating generative AI into their operations as they witness its positive influence on efficiency and profitability.
Goldman Sachs’ Cautious Approach to Implementing Generative AI
In a recent interview, Goldman Sachs CIO Marco Argenti revealed that the firm has not yet implemented any generative AI use cases. Instead, the company focuses on experimentation and setting high standards before adopting the technology. Argenti recognized the desire for outcomes in areas like developer and operational efficiency but emphasized ensuring precision before putting experimental AI use cases into production.
According to Argenti, striking the right balance between driving innovation and maintaining accuracy is crucial for successfully integrating generative AI within the firm. Goldman Sachs intends to continue exploring this emerging technology’s potential benefits and applications while diligently assessing risks to ensure it meets the company’s stringent quality standards.
One possible application for Goldman Sachs is in software development, where the company has observed a 20-40% productivity increase during its trials. The goal is for 1,000 developers to utilize generative AI tools by year’s end. However, Argenti emphasized that a well-defined expectation of return on investment is necessary before fully integrating generative AI into production.
To achieve this, the company plans to implement a systematic and strategic approach to adopting generative AI, ensuring that it complements and enhances the skills of its developers. Additionally, Goldman Sachs intends to evaluate the long-term impact of generative AI on their software development processes and the overall quality of the applications being developed.
Goldman Sachs’ approach to AI implementation goes beyond merely executing models. The firm has created a platform encompassing technical, legal, and compliance assessments to filter out improper content and keep track of all interactions. This comprehensive system ensures seamless integration of artificial intelligence in operations while adhering to regulatory standards and maintaining client confidentiality. Moreover, the platform continuously improves and adapts its algorithms, allowing Goldman Sachs to stay at the forefront of technology and offer its clients the most efficient and secure services.
Featured Image Credit: Photo by Google DeepMind; Pexels; Thank you!
UK seizes web3 opportunity simplifying crypto regulations
As Web3 companies increasingly consider leaving the United States due to regulatory ambiguity, the United Kingdom must simplify its cryptocurrency regulations to attract these businesses. The conservative think tank Policy Exchange recently released a report detailing ten suggestions for improving Web3 regulation in the country. Among the recommendations are reducing liability for token holders in decentralized autonomous organizations (DAOs) and encouraging the Financial Conduct Authority (FCA) to adopt alternative Know Your Customer (KYC) methodologies, such as digital identities and blockchain analytics tools. These suggestions aim to position the UK as a hub for Web3 innovation and attract blockchain-based businesses looking for a more conducive regulatory environment.
Streamlining Cryptocurrency Regulations for Innovation
To make it easier for emerging Web3 companies to navigate existing legal frameworks and contribute to the UK’s digital economy growth, the government must streamline cryptocurrency regulations and adopt forward-looking approaches. By making the regulatory landscape clear and straightforward, the UK can create an environment that fosters innovation, growth, and competitiveness in the global fintech industry.
The Policy Exchange report also recommends not weakening self-hosted wallets or treating proof-of-stake (PoS) services as financial services. This approach aims to protect the fundamental principles of decentralization and user autonomy while strongly emphasizing security and regulatory compliance. By doing so, the UK can nurture an environment that encourages innovation and the continued growth of blockchain technology.
Despite recent strict measures by UK authorities, such as His Majesty’s Treasury and the FCA, toward the digital assets sector, the proposed changes in the Policy Exchange report strive to make the UK a more attractive location for Web3 enterprises. By adopting these suggestions, the UK can demonstrate its commitment to fostering innovation in the rapidly evolving blockchain and cryptocurrency industries while ensuring a robust and transparent regulatory environment.
The ongoing uncertainty surrounding cryptocurrency regulations in various countries has prompted Web3 companies to explore alternative jurisdictions with more precise legal frameworks. As the United States grapples with regulatory ambiguity, the United Kingdom can position itself as a hub for Web3 innovation by simplifying and streamlining its cryptocurrency regulations.
Featured Image Credit: Photo by Jonathan Borba; Pexels; Thank you!