Blockchain 101

Everything you need to know

Blockchain has the potential to revolutionize the way we access and consume information. Such is the excitement, blockchain has become a buzzword. But like most buzzwords, it’s frequently misunderstood.

So let’s look at how blockchain technology works and what it holds for the future, especially gaming.

What is it?

Blockchain gets its name from the way it breaks information down into bite-sized pieces such as an individual transaction. Each piece of data is called a block. And all data is connected online as part of a chain. Hence, blockchain.

Blockchain gets its name from the way it breaks information down into bite-sized pieces

The net result is usually described as a distributed ledger that keeps a verifiable and permanent record of transactions across a decentralised, publicly accessible network of nodes. In other words, the blocks themselves are linked across the hard drives of all the users of the chain.

As it’s still a nascent technology, there’s no agreed standard for blockchain, but the International Standards Organization is now working on the standardisation of blockchain technologies and distributed ledger technologies.

Decentralized, not destabilized

The traditional transfer of information online is based around the one-to-many model, where a central server serves that information to multiple end users. That not only requires a central organisation, but it also presents both physical and digital security risks with clear vulnerable points for hackers to steal or corrupt data.

But with a many-to-many structure, where can they attack if there is no central location either online or in the real world?

Blockchain games like CryptoEmoji are emerging fast

It’s not even like digital cowboys can stage a virtual hold-up on the information train, as there’s no single track along which it travels. And if those weak points don’t exist, they no longer need protection by an authority such as a content provider or financial institution.

Because of the way data is shared, there’s no need for an intermediary body, making many business use cases both faster and cheaper. It’s not so much a case of, ‘There’s a new sheriff in town’ as, ‘This town no longer needs a sheriff’.

Security guards, not police

Running on a peer-to-peer network that validates every new block against the ones that came before it, the system has been designed to make it next-to-impossible to alter the information on record. Holding multiple instances of data, the networks run on consensus to establish a canonical order of transactions, preventing double-spending and fraud.

The Ethereum blockchain is designed for distributed apps (or DApps), and is currently the main blockchain used for gaming

While there are differences in terms of how each blockchain works, each new block typically contains a version of the one that preceded it, a timestamp and transaction data. That way, the origin of each block can be traced all the way back to its genesis and cross-referenced to verify its authenticity.

The information is usually secured using a cryptographic hash – think of it as a secret code based on a mathematical algorithm.

Coins vs chains

Cryptocurrencies are often confused with blockchain. This is because the best known blockchain is also a cryptocurrency: Bitcoin is a blockchain specifically designed for financial transactions.

And while all blockchains have an associated currency, which is required for their ongoing operation, the vast majority aren’t designed to specifically handle financial transactions, just transactions. For example, the Ethereum blockchain is powered by its Ether cryptocurrency but it’s used for distributed apps (or DApps), and is currently the main blockchain for gaming.

Other blockchains have been proposed to optimize video streaming, personalize marketing, decentralized storage, make market predictions, and handle information tasks ranging from land registration to copyright allocation, and personal health care.

Blockchains’ ability to process transactions enable very complex economies to develop

Notable in this context are ‘smart contracts’; small piece of code which automate transactions, and amongst other things enable content creators to be paid every time their work is sold.

Of course, this principle could just as readily apply to games developers and already marketplaces are springing up, which offer to take a much small cut of initial sales than the current 30%, but also offer gamers the ability to resell their games, with developers gaining the bulk of these recurrent sales.

Blockchain games

Game developers have always been among the first to adopt new technologies, so it’s no surprise to see that gaming is one of the first sectors to adopt blockchain.

Given the inherent transactional nature of the technology, it’s no surprise many of the gameplay mechanics we see emerging at the moment are centred around trading ‘cryptocollectibles’.

As demonstrated in the sector’s first seminal game – CryptoKitties – players buy unique cat cards to breed new types of kitties, which each card available for trading. Etheremon shares similar collecting gameplay, taking its inspiration from Pokemon. Players capture monsters to train so they transform or lay eggs with the objective of battling other monsters and collect tokens.

While the majority of blockchain games utilise Ethereum and the browser, there are also a growing surge of mobile games, with EverdreamSoft’s Spells Of Genesis, which blends trading card game mechanics with arcade gameplay, the first to gain prominence.

Of course, this is only the beginning for blockchain gaming. These baby step are important to show the sector’s potential but will be long forgotten over the coming months and years as game designers really get their teeth into the possibilities of asset ownership, complex transactions and economic value.

And that’s where comes into play. Our mission is to cover everything that emerges from the collision of blockchain technology and the games industry. We hope you’ll join us.

For Plain English explanations of everything from accounts and actors to Zero-Knowledge SNARK, please see our Easy A-Z Definitions Of Blockchain And Cryptocurrency Terms.

Leave A Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.