Many people now own assets like bitcoin and ether because they have heard about them. It isn’t just about cryptocurrencies. Blockchain technology can do a lot more than just make money. There was a lot of talk about DeFi last year, but even though it was interesting, it didn’t drive a lot of people to use the blockchain. NFTs and blockchain games seem to be big this year.
NFT games on the blockchain are not new. They have been around since at least 2018. They have had some success, but not a lot of money. To make a good blockchain game, you have to make sure that playability, tokenomics, and technology all work together in the right way. This balance was hard to find until one game did it right: Axie Infinity.
Axie Infinity has become very popular in the last few months because it started the idea of play to earn. Players can earn real money by playing a pokemon-like game. There will be a lot more posts like this one where I look at different parts of the game to figure out the secret recipe for this killer app.
My focus will be on the technology side today, and I’ll look at how Axie Infinity uses blockchain technology to start a new chapter in the gaming industry.
Blockchain
Before discussing Axie Infinity and its usage of blockchain, it is vital to understand why they chose to adopt one. After all, every game up until now has used a centralized database to record game data.
Characters, objects, and in-game cash are all recorded in a single database. In this case, the game production business may change the database content at any time and select who can access it. As a gamer, you are susceptible since you have no actual control over your possessions, just the perception of power.
A regular database also represents a single point of failure for the system. No one can play if the database fails. As a single point of failure, it may be hacked and the data damaged or deleted.
It is an immutable distributed database where the game designer cannot edit the data. These are neutral systems. No one, not even the game’s developer, can take away your NFT or tokens.
Because a blockchain depends on several nodes working together and information is copied on each, there is no single point of failure. A blockchain is resistant to failures and hackers. They are designed to deal with rogue nodes via economic incentives and strong encryption.
However, blockchains are slower than normal databases. How much slower depends on the blockchain. With Ethereum’s present speed and large transaction costs, building a game directly on Ethereum is impractical and hard to grow. Fortunately, permissioned blockchains exist.
Permissioned vs. Permissionless Blockchains
A permissionless blockchain, like Ethereum or Bitcoin, needs a lot of people to work together to come to a consensus. Anyone can start a new node to mine and validate transactions. Use PoW (Proof of Work) or PoS algorithms to get consensus in these networks, and you can do this to make sure everyone is on the same page. Permissionless blockchains trade speed for security.
As a result, a permissioned blockchain only has a small group of people who can make sure things work. This means that even if you want to start a new node on the network, you can’t. Usually, there is no need for mining in this type of blockchain because the number of nodes is small, and the nodes are assumed to be honest (trusted).
Using complicated consensus algorithms like PoW and PoS on a permissioned blockchain doesn’t make sense. This can be very good for performance, but it can also be bad for decentralization and security. People use this when they don’t want to deal with a real blockchain or a real database.
Blockchain Used
Sky Mavis has made an Ethereum sidechain called Ronin that’s only for that game. This sidechain is a permissioned blockchain that has a two-way bridge to Ethereum.
As discussed before, the reason to use a permissioned blockchain is performance as they allow for a greater volume of transactions compared to Ethereum with the added benefit of not needing to pay gas fees. Rather than relying on mining incentives and gas costs like Ethereum, Sky Mavis chose a group of people who work to keep the network safe. Sky Mavis paid them directly. Of course, this implies that the gamers will have to trust that the validators will remain honest, but at least it’s better than just Sky Mavis having complete control over a centralized database.
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