Why Gamification is Vital to Blockchain

Gamification is the layering of game-like features on top of an existing technology platform. Its intent is to increase attractiveness, participation, engagement, and interactivity. Some might say that blockchain is perfectly suited for this, given both its immense technological promise as well as the struggles it has encountered gaining popular acceptance and widespread use. In fact, some companies are already dipping their toes into this pond.

Looking back, one of the enterprises to pioneer gamification to increase interest in and loyalty to its product was the airlines. They created point systems to reward frequent fliers with fungible benefits that could be redeemed for upgrades, discounts, and even hotel stays and rental cars. Now, many other institutions have followed suit, including credit card companies, gasoline cards, and even supermarkets.

Blockchain technology is at a tipping point. It has proven to be a solid and stable architecture for use as a currency exchange platform and shows promise for a number of other applications. However, it is still cumbersome, complicated, and confusing to most people, and has not been able to overcome the mind-set hurdles that stand between it and widespread acceptance by the average person. Perhaps gamification can provide that “killer app” that shifts the balance and ensures a profitable future for the blockchain and cryptocurrency space.

In December of 2017, the CryptoKitties craze was in full swing, becoming the first blockchain-based game to go viral. In fact, it became so popular that it nearly brought the Ethereum network, upon which it was built, to its knees. Users bought, sold, traded, and bred unique digital kitties, each being special and different in some possibly-desirable way, based on its “DNA” as validated by the blockchain. Each kitty is stored as a ledger record on the blockchain, and is powered by ERC721, an Ethereum improvement proposal, that allows smart contracts to serve as tradable, though non-fungible tokens. More importantly, CryptoKitties made it simple and fun for the average person to create accounts, create wallets, use cryptocurrency, and establish a sovereign identity, overcoming all the hurdles that often discourage the average person from participating in this space.

Another potential market for gamification in the blockchain realm is the purchase, ownership, sale, and trade of the virtual items that are obtained through other gaming activities. For example, virtual weapons, powers, abilities, knowledge, and even lives can be earned during gameplay by defeating enemies, overcoming hurdles, or completing specific tasks. Though the terms of use for most electronic games prohibit the purchase and sale of virtual items for fiat money, there is still a strong underground economy devoted to doing so to the tune of perhaps $15 billion per year. The strengths of blockchain — the ability to assign unique IDs as well as ownership to virtual items — make it the ideal platform for enabling gamers to safely and securely deal in them.

What are the attributes of a gamified app that achieve the desired goal of opening up the blockchain to the masses? First off, the app needs to be simple — simple to understand, simple to enroll, and simple to use. Primarily, though, it needs to be fun! This is what will beckon the average user and lure them into engagement with the blockchain and cryptocurrency world. Lastly, it needs to have some perceived value, whether that value is fungible or not.

As far as gamifying the blockchain, CryptoKitties showed a lot of promise. However, the bottom line for the long-term success of any application is its sustainability. Some have described CryptoKitties as the digital equivalent of Beanie Babies, and we all know what happened to their popularity and value over time: the overwhelming majority, with only a few exceptions, are now completely worthless. However, with over 2.2 billion gamers on the planet generating more than $100 billion (with a “b”) in revenue each year, the allure of gamification cannot be ignored. It is definitely not essential to the success of a new technology — think ATMs — but it may be the spark needed to move blockchain into the realm of common acceptance and use.

How will gamification be utilized in the blockchain in the near future? Creating actual games is not the only option. Sandblock, a French company started last year, offers companies the ability to use the blockchain to create customized loyalty rewards using their own branded tokens based on the Satisfaction Token SAT. Coupled with a mobile app, member companies can personalize their communications to their customers while providing tokens that can be exchanged in the marketplace for other crypto-tokens, used for donations to charities, used to obtain consumption credits based on Sandblock’s partnership with ETHLend, or even exchanged for fiat currency.

However, games are an undeniable draw, and they will definitely be part of the conversation. Bits.Farm, roughly the blockchain equivalent of Farmville on Facebook, is intended by its Chinese creators to, “help people appreciate and protect the environment, and to treasure our available resources.” Its data and social transactions all live on the Bitshares network, chosen because of its ability to handle a huge number of transactions per second as well as scale up without bottlenecks as the popularity of the game grows. As in real life, you can plant crops and reap the financial benefits, but you also risk being ravaged by bandits.

Launched in 2015, Erista is, according to its creators, “a revolutionary platform that provides a decentralized way for anyone to participate in challenges, contests and online competitions.” Gamers can participate in dares, challenges, and predictions as they earn rewards for their success. They can even interact with other players. Users can actually launch their own challenges, accept the challenges of others, and even post videos on YouTube of completed challenges, offering the possibility of monetizing their ratings on that platform as well. However, the ultimate value of a player’s utility tokens is largely pegged to the eventual adoption and proliferation of the platform. As its popularity grows, a stable demand for its tokens is created, and the interactivity and engagement among its players increases.

It remains to be seen whether the gamification of blockchain will end up providing endless hours of game-playing opportunities to its users, or simply enhance the engagement and participation of the public in blockchain investment and utility tokens for commerce. Perhaps the answer is both, and perhaps more. Unlike most gaming platforms where the rules and rewards are owned and controlled by one central authority (and generally for the express benefit of that authority), blockchain provides an open, transparent, egalitarian, portable, and extensible home for gaming activities. And, as highlighted previously, it can be ideal for making blockchain-based commerce acceptable to, or even popular with the masses.

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Written by:

Parul Gujral, CEO-Snowball

Originally published at www.snowball.money.


Why Gamification is Vital to Blockchain was originally published in Data Driven Investor on Medium, where people are continuing the conversation by highlighting and responding to this story.