Bitcoin’s recent ascent has proven to be a negative thing for the aggregated crypto markets, as it has led most altcoins – including major ones like Ethereum (ETH) – to plummet as BTC continues to garner greater dominance over the markets.Now, analysts are noting that Ethereum could still see some bullish price action in the near-future, which comes as the sentiment surrounding the cryptocurrency is becoming incredibly bearish.Ethereum Plummets Towards $200 as Selling Pressure Ramps Up At the time of writing, Ethereum is trading down nearly 3% at its current price of $204, which is down significantly from its daily highs of nearly $215.Over a one-week period, ETH is trading down significantly from its highs of $240 and is currently trading just a hair above its seven-day lows of $200 that were set earlier today.This bearish price action simply marks an extension of the sell-off that first began in early-July when the cryptocurrency was trading over $300, which was closely followed by a sharp pullback that has led it to its current price levels.Despite this massive drop, Dj Thistle, a popular crypto analyst on Twitter, recently told his nearly-30k followers that ETH could be gearing up for another big movement upwards based on a fractal formation that it formed in early 2017.“Gettin’ closer,” he concisely noted in a recent tweet, while pointing to the below chart.#ETHEREUM $ETH $ETHBTCgettin’ closer🤞 pic.twitter.com/jvjjvE54Em— dj Thistle / Coin Street News (@DJThistle01) August 8, 2019Sentiment Surrounding ETH Grows BearishImportantly, embattled Ethereum investors are growing increasingly bearish about the cryptocurrency, as a recent Twitter poll signals that of nearly-4,000 participants, 35% of them believe ETH will never trade above $1,000 again, which is near where its all-time-highs currently exist.“Will $ETH ever trade above $1000 again?” Nik Patel, a popular cryptocurrency analyst, asked in a recent tweetWill $ETH ever trade above $1000 again?— Nik Patel (@cointradernik) August 10, 2019Although this sentiment may be disheartening for embattled Ethereum investors, it is important to note that bearish sentiments typically precede upwards movements and can be used as a good counter indicator.As the second half of the year continues on it is highly likely that it will grow increasing clear as to whether or not altcoins will be able to regain dominance over the markets, or if Bitcoin will continue to maintain its dominance over the markets.Featured image from Shutterstock.
Archives for August 10, 2019
Another week, another of Crypto Tidbits. Bitcoin (BTC) bulls continued to show their faces after a brief lull.Per data from Coin360, the leading cryptocurrency is up 6% over the past seven days. Despite the fact that altcoins are supposed to follow Bitcoin, assets like Ethereum, XRP, and so on actually underperformed BTC by a large margin, resulting in two-year highs for the Bitcoin dominance statistic.Related Reading: Gann Theory Suggests Bitcoin Price at “Do or Die” Moment, Important Pivot AheadPrice action aside, this week saw a number of interesting developments for the cryptocurrency space: the latest round of tariffs from Donald Trump have sparked another round of debates over Bitcoin’s potential as a safe haven; nations in the G7 have renewed efforts to crack down on crypto, and a number of industry startups made a handful of product announcements.Related Reading: Crypto Tidbits: LedgerX Bitcoin Futures, Federal Reserve Rate Cut Bullish, Square BoomsBitcoin & Crypto TidbitsLeading Nations Looking to Crack Down on Crypto Money Laundering: Reported by Nikkei Asian Review, a consortium of some 15 countries, including the nations of the G7 (U.S., Germany, Japan, etc.), will be creating a platform that will ensure that crypto assets, like Bitcoin, will be hard to use in money laundering operations. The system, which is to be created and designed by the Financial Action Task Force, will collect and share the personal information of those that are involved in the crypto industry. Nikkei’s article reads: “The goal is to prevent funds from being laundered, going to terrorist organizations or otherwise being put to illicit use.” This comes as politicians like Donald Trump have vehemently come out against cryptocurrencies, especially Bitcoin and Libra.Binance U.S. Unveils Potential List of Supported Crypto Assets: Binance’s American subsidiary, Binance US, is nearing its launch. However, ever since it was announced back in mid-June, crypto investors have been wondering which altcoins the new platform would support, as the U.S. Securities and Exchange Commission (SEC) has yet to give clear guidelines for crypto exchanges. But Binance recently shocked the crypto trading community, unveiling a nice swath of digital assets it may support. The list includes the normal suspects, including Bitcoin and Ethereum, but also an array of smaller altcoins that may not ring a bell. The 30 cryptocurrencies that the Binance subsidiary is currently considering are as follows (in alphabetical order): ADA, ATOM, BAT, BCHABC, BNB, BTC, DASH, EOS, ETC, ETH, HOT, IOTA, LINK, LOOM, LTC, MANA, NANO, NEO, PAX, REP, RVN, TUSD, USDC, USDT, VET, WAVES, XLM, XRP, ZIL, and ZRX.Crypto-Friendly Social Media Firm Kik Pushes Back Against the SEC: For months now, crypto-friendly social media firm Kik, which famously hosted a $100 million ICO for the KIN project, has been tussling with the U.S. SEC. The regulatory agency sued the Canadian firm, claiming that it was in violation of securities laws. Kik is now fighting back. Earlier this week, the firm released an over 100-page document rebutting the SEC’s concerns. While the piece is quite long, there are a few key takeaways put forth by Kik’s team of lawyers and technologists: Kik did not sell digital securities, and thus did not violate any pertinent federal laws; the crypto isn’t the firm’s attempt to save itself from going under; KIN isn’t the only company foraying into social media digital assets, but is the first; the SEC is ignoring certain statements that would help Kik’s case; the SEC is operating on a “flawed factual and legal premise”. Some, funnily enough, have said that this “flawed premise” extends to its rulings on Bitcoin exchange-traded funds (ETFs).Ripple CEO Expects to Bag More Deals: Ripple chief executive Brad Garlinghouse told Yahoo Finance that he wants his firm to leverage its strong position in the market and large balance sheet to make more investments and acquisitions. No specific firms were mentioned, but Garlinghouse said that Ripple is looking into deals that will allow it to better satisfy its customers. This, of course, comes shortly after the firm bagged a deal with Moneygram, one of the world’s largest money-transfer firms, to utilize xRapid.Blockstream Launches Bitcoin Mining Service: Blockstream, the Canadian Bitcoin development and services giant, has just expanded its operations once again. This time, it is launching a mining service, which actually commenced operations in secret way back in 2017. This new division is a “mining equipment colocation” service, which promotes “institutional and enterprise customers” to deploy “virtually any type of Bitcoin mining equipment” in any of Blockstream’s centers. Currently, the colocation service is used by Fidelity Investments, the prominent Wall Street firm that has been mining Bitcoin in-office for years; pro-crypto LinkedIn founder Reid Hoffman, and Blockstream itself, which claims to have machines that power “less than 1%” of the Bitcoin network. The firm is also launching a mining pool that will promote decentralization.Bitcoin Hash Rate Continues Higher: Despite Bitcoin’s tumultuous price action, miners continue on adding capital to the space. This week, Bitcoin’s hash rate surmounted 80 EH/s for the first time ever.EtherDelta Involved in Scam: China: According to Dovey Wan, a prominent Chinese crypto investor and industry insider, EtherDelta is purportedly involved in an exit scam. The popular Ethereum decentralized exchange was purportedly quietly sold off to Chinese investors by the SEC-charged Zack Coburn. The unnamed investors then later used their newly-acquired platform to sell a crypto asset with EtherDelta branding in an apparent exit scam. The details of this case are still unclear.New Crypto Platform FTX Bags $8 Million: FTX, an up-and-coming crypto trading platform backed by many of the individuals at industry fund Alameda Research, has secured $8 million in investment from a number of industry venture firms.Bitwise Claims Libra Accelerated Crypto by Three Years: Bitwise’s Matt Hougan claimed that Libra helped to propel the industry to “center stage”, which is especially important for an industry as fringe and abstract as digital assets and non-fiat monies. Elaborating, Hougan added that Libra is also important because it and “other catalysts” have “changed the nature” of the conversations that investors and others are having about this industry. This paradigm shift in how the public addresses Bitcoin and its ilk, he adds, has been seen across the globe.Featured Image from Shutterstock
Bitcoin is possibly on its way to new all-time highs, while altcoins like Ethereum, Ripple, and Litecoin are capitulating en masse. The two things don’t often go hand in hand due to how closely the two crypto asset types are connected, yet growing regulatory pressure and other important factors have caused a massive divergence in their price correlation.Sentiment around altcoins is at extreme lows, yet the majority of the crypto market believes that Bitcoin is about to embark on its next bull run. But with altcoin sentiment in the gutter, could the fear, uncertainty, and doubt eventually spill over into Bitcoin and cause its bull rally to collapse? One crypto pundit believes so and says that “the weakest link of the chain breaks first.”Weakest Link of the (Block)Chain Breaks FirstDuring 2017, the blockchain and crypto hype train took Bitcoin, Ethereum, and the rest of the market to all-time highs and many millionaires. It only further created a bubble, sucking in retail investors who bought the top of these rallies, and now are stuck holding assets that are 99% below the value they bought in at.Meanwhile, Bitcoin hit its rock bottom back in December 2018, and ever since has been on a steady climb back toward its all-time high of $20,000 it set the year prior. Bitcoin’s climb sucked any meager gains the altcoin market was privy to right out of it, as it broke through resistance after resistance and took the media by storm.Related Reading | Gold Investor Peter Schiff Claims BTC Bottom Won’t HoldHowever, even Bitcoin has slowed, failed to reach the same level of interest is saw during the 2017 bull run, and is now at an inflection point where the next major price movement could dictate the trend for not only Bitcoin, but the entire crypto market for the coming weeks to months, even years ahead.But could it actually be negative sentiment surrounding altcoins and the key factors driving that decline that is causing Bitcoin price to collapse? Crypto pundit and gold bug Peter Schiff believes so, and took the opportunity to blast both Bitcoin and the rest of the crypto space.Those arguing the collapse of altcoins validates Bitcoin are whistling past the crypto graveyard. Altcoin demand drives the Bitcoin on-ramp. The weakest links of a chain break first. Once confidence in altcoins is lost, Bitcoin is next. The similarities outweigh the differences.— Peter Schiff (@PeterSchiff) August 10, 2019The famed gold investor says that “once confidence in altcoins is lost, Bitcoin is next,” and says its due to how “altcoin demand drives the Bitcoin on-ramp.”While Schiff’s comments should be taken with a grain of salt given how frequently he bashes Bitcoin and crypto due to his vest interests in the gold market, there’s no denying that altcoin sentiment could harm Bitcoin.Why Bitcoin Won’t Fail Due to Altcoin FalloutBut what Schiff doesn’t seem to understand is that there are different factors driving the altcoin sell pressure, and one of those factors is Bitcoin itself.The altcoin on-ramp phase has also been over for nearly a year now. Bitcoin’s rally has absorbing all of the buy pressure form the market, and even sucking up altcoin capital. Bitcoin’s rally has also been driven in part by institutions, whereas altcoins are almost entirely retail-driven.Related Reading | Continued Bitcoin Correction Could Cause Lead to Altcoin Market Double Bottom Altcoins also are still so far from their all-time high prices, while holders are forced to sit back and watch values fall further all while Bitcoin climbs. The psychology is enough to cause further capitulation in altcoins alone.On top of that, confusion and lack of clarity around which altcoins are legal to hold under the coming regulatory framework has caused widespread panic across the market. The regulatory framework is cutting off access to the majority of the altcoin market, making matters even worse for altcoins hit the hardest.Altcoins are in a death spiral currently, and one that has the potential to pull Bitcoin down with it. Let’s hope it doesn’t.
After consolidating in the upper-$11,000 period for an extended period of time, Bitcoin (BTC) incurred a sudden influx of selling pressure that sent the crypto reeling down to lows of roughly $11,300, at which point it found some support.Analysts are now noting that Bitcoin’s bulls are safe so long as the crypto holds above a key support level, but a breach below this level could lead to a significant pullback.Bitcoin Drops Towards $11,000 as Bears Gain Greater StrengthAt the time of writing, Bitcoin is trading down nearly 3% at its current price of roughly $11,400, which is down significantly from its daily highs of roughly $12,000 that were set yesterday.Bitcoin’s latest drop came about after an extended period of consolidation in the upper $11,000 region, which had led many analysts to believe that BTC was gearing up for a big movement upwards.Despite this, the subsequent drop that followed this consolidation period appears to signal that Bitcoin is not ready to move into the $12,000 region, as it has tried and failed on multiple occasions to break above this level.Big Chonis, a popular crypto analyst on Twitter, spoke about BTC in a recent tweet, explaining that bulls shouldn’t be too concerned so long as Bitcoin holds above $11,400, which is a key support level at the moment.“$BTC – bulls have no worries…above this line,” he explained in a recent tweet.$BTC – bulls have no worries…above this line…#bitcoin pic.twitter.com/dj6bRIVm7l— Chonis Trading-⚔️ (@BigChonis) August 10, 2019Will BTC Continue Dropping Lower as Weekend Kicks Off?Although $11,400 does appear to be a near-term support level, it is important to note that the multiple failed tests of $12,000 do seem to spell trouble for the cryptocurrency, which may signal that further losses are imminent in the near-future.“Wyckoff for the win. Dead on. Failed test to 12k and dumped,” Crypto Warrior, another popular analyst, noted in a recent tweet while pointing to a chart that shows BTC may drop further.Wyckoff for the win. Dead on. Failed test to 12k and dumped. $BTC #BTC pic.twitter.com/SSY8M7g9VS— Crypto Warrior (@Rnb010) August 10, 2019As the weekend kicks off and Bitcoin reacts to its latest drop, it is highly likely that analysts will soon gain greater insight into whether or not a move to $12,000 is out of the question in the near-term.Featured image from Shutterstock.
For a while now, a debate has been raging between Bitcoin (BTC) bulls and gold investors. The former group argues that the cryptocurrency is a proper alternative to the precious metal; the latter actively rebut this sentiment, claiming that BTC has no inherent value, unlike gold.Related Reading: Global System to Combat Crypto-Driven Money Laundering in DevelopmentHowever, Bitcoin’s proponents recently snagged a win, with a prominent billionaire and television star admitting that BTC is, in his eyes, a proper gold alternative.Bitcoin, the Same as Gold?Speaking to Kitco, Mark Cuban, a panelist of “Shark Tank” (which also hosts prominent Bitcoin critic Kevin O’Leary), explained that he sees very clear similarities between Bitcoin and gold, the latter of which he finds to have little inherent value.The billionaire explained that if you were to boil the two assets down, they are essentially the same thing, adding that they both can be defined as collectibles. In other words, Cuban explained that Bitcoin and gold both derive their value from simple supply-demand economics.Related Reading: Bitcoin Price to See Fresh All-Time Highs Amid “Market Mayhem”, Fundstrat AssertsFunnily enough, he went on to laud Bitcoin in his own way. Referring to the cryptocurrency’s 21 million coin supply cap, Cuban explained that BTC has a “finite supply” much unlike gold, which he claimed would continue to be mined into infinity.
This is actually an argument that many of cryptocurrency’s foremost supporters bring up in their arguments against gold bugs and traditional economists, like Peter Schiff.“#Gold and #bitcoin are the same things,” says @mcuban, owner of the @dallasmavs. “They are both collectibles. I hate gold. Gold is a religion” | THROWBACK WEEK | @KitcoNewsNOW @DanielaCambone | #kitconews #crypto #markets #investing #cryptotrading | https://t.co/hOU7Avzd2y— Kitco NEWS (@KitcoNewsNOW) August 9, 2019Despite his surprise admission, which would normally be music to the ears of crypto investors, Cuban made it clear he isn’t bullish on Bitcoin, or gold for that matter.He told the gold-centric business news outlet that he hates gold — and thus Bitcoin — and does not see the precious metal as an alternative to fiat currencies. Of course, the gold standard would beg to differ. Regardless, the billionaire made it abundantly clear that he isn’t a fan of gold or Bitcoin — and that’s that.A Critic of LibraWhile Cuban has a penchant for innovation, he doesn’t like Libra. Speaking to CNBC and a number of outlets on a number of occasions, the Dallas Mavericks owner has explained that he believes that the Facebook-backed crypto asset is a “big mistake”.He opined that in nations where there isn’t a lot of “rule of law, government stability, or currency stability”, Libra, and maybe Bitcoin too, could become “dangerous” should it see adequate amounts of adoption.Indeed, should Libra be adopted in a country with governmental problems, for instance, there may be unintended consequences. Whether those consequences are good or bad are debatable though. Cuban expounded:“There’s going to be some despot in some African country that gets really upset that they can’t control their currency anymore and that’s where the real problems start occurring.”Featured Image from Shutterstock
A new patent application from IBM describes a blockchain-based web browser.
Filed on August 6 by the United States Patent and Trademark Office, IBM’s patent is for a web browser backed by a peer-to-peer network.
The browser collects pre-specified information from web browsing sessions, according to the patent. The information is then transferred to a network of peer-to-peer nodes for collection and storage. Information collection depends on the type of browsing experience chosen. Browsing on a work computer versus a personal browser would demand different settings, for example.
Types of potentially storable session information include what websites one visits, bookmarks, task performance, geolocation, plugin installation, and security patches.
As the company states, a blockchain-based browser “affords a system for storing browsing information such that privacy is preserved and places privacy in the ‘hands of a user’ rather than a third party.”
One potential use-case the document includes, among others, is an attack on a computer’s browser. If secured by blockchain technology, a viable backup of all user information is available.
Interestingly, IBM included a token in their model. IBM says tokens will verify a users browser session activities as they are packaged into blocks for the peer-to-peer network.
IBM’s blockchain web browser concept is not the only one in the field, however.
Norwegian web browser Opera company recently launched their iOS Opera Touch browser in June. Built for Web 3.0, Opera Touch has a built-in cryptocurrency wallet and connects seamlessly to Web 3.0 applications including ERC-20 tokens.
Image via CoinDesk archives
In the wake of a recent network upgrade, a number of nodes have been separated from the bitcoin SV blockchain, a development that highlights why “hard forks” have long been the subject of passionate infighting among cryptocurrency developers.
According to block explorer Blockchair, roughly 20 percent of BSV nodes are still running an older version of the software. That’s before most of the bitcoin SV moved to a new blockchain in an upgrade known as a “hard fork,” executed on July 24th, which increased the blockchain’s block size parameter to 2 GB with the goal of increasing transaction volume.
It’s unclear why these nodes have failed to upgrade. It could because they didn’t know they simply didn’t get the memo, they forgot they were running an older version or their operators simply didn’t agree with the changes in the hard fork and opted to protest.
Bitcoin SV, a cryptocurrency not to be confused with bitcoin, is the brainchild of entrepreneur Craig Wright, who maintains that he created bitcoin (despite a range of security experts debunking his cryptographic proof). Wright is also currently embroiled in a lawsuit in the US that centers in part around the question of his claims to the Satoshi Nakamoto mantle.
“There was a hard fork on BSV […] which resulted in a chain split, the new hard fork rules chain and the original rules chain. Most of the BSV economy and miners followed the new hard fork chain. The old original chain still exists, but has little economic significance, other than miners wasting money mining on it,” a representative of BitMEX Research, a wing of one of cryptocurrency’s largest exchanges, told CoinDesk.
Whether or not this metric matters matters has been up to debate after several other hard forks.
To oversimplify a complex debate, some argue hard forks are a clean upgrading mechanism for enhancing blockchains with new features, while detractors argue that hard forks can only be executed successfully by more centralized blockchains. On the other hand, the old chain is now pretty much dead.
At first, bitcoin SV temporarily forked, with miners on the old chain mining more than 50 blocks, leading said miners to lose their block rewards. But now, at least the vast majority of miners have upgraded, so no more blocks are being created on the old blockchain.
But while critics might argue that the blockchain is leaving nodes behind. This is in line with bitcoin SV’s view that miners, not nodes, are what are important in the network.
“Power has now shifted to the miners to decide their own limits. […] Moving responsibility of the limits of the system to the miners means that the market itself, chooses what is best for the system. It is not for developer groups to decide market forces, but for the market itself,” CoinGeek developer Eli Afram told CoinDesk.
Leaving nodes behind wasn’t the only other complication during this period. Last weekend, a significant portion of bitcoin SV nodes had problems processing a 210 MB block. Those nodes were stuck and were unable to send or relay transactions on the bitcoin SV network.
The problem in part was due to large size of the block – but it’s a bit more complicated than that.
“The main cause of the problems with the large 210 MB block was not necessarily the large size, as bitcoin SV had other large blocks in the past, but that it contained a lot of transactions, which used a lot of memory to validate. Previous large blocks on bitcoin SV had a lot of large OP_Return data, which is much easier to validate compared to ‘normal transactions’,” BitMEX Research told CoinDesk.
Critics see this as another sign of centralization of the system because less nodes are having no trouble with blocks. But those in the bitcoin SV community don’t see this is a problem.
“What happened is that some cheap nodes dropped off the network,” Afram said.
Either way, most nodes have recovered since then.
“The nodes eventually got [past] the block or gave up it seems,” a representative from BitMEX Research told CoinDesk.
Bigger blocks have had an impact on bitcoin SV in other ways as well. Money Button CEO Ryan X. Charles, one of the more influential bitcoin SV proponents, disclosed that because of how expensive running a bitcoin SV node is becoming due to the data storage requirements caused by bigger blocks, they’re not going to run one anymore.
“Our new instance will cost thousands of dollars per month to operate. As blocks continue to get larger and we have to upgrade the instance many times, this cost will balloon,” Charles explained.
This decision further flared debate. The more full nodes there are, the more decentralized the network is. MoneyButton’s decisions perhaps shows that bitcoin SV full nodes are growing too fast data-wise for everyday users to run.
But again, this is in line with bitcoin SV’s vision that miners are the important players. And next year, bitcoin SV plans to increase the block size for the last time.
As Afram told CoinDesk:
“I look forward to when the [block size] cap is removed altogether next year, so that Bitcoin can grow completely unbounded, and undeterred by crony developers, and we never have to have this [hard fork] discussion again.”
nChain CEO Jimmy Nguyen via BitcoinSV.io
A new report on the nascent ecosystem of blockchain-based games indicates that one of the model’s most-trumpeted characteristics — the ability to mix and swap data between games – isn’t panning out.
The idea of cross-overs between games isn’t exactly new. Series like Nintendo’s Super Smash Brothers perhaps best exemplify this approach, with familiar characters coming together in one game. But those characters are all under Nintendo’s control — and it’s this area that blockchain games promise a new paradigm, in which a player’s hard-earned progress could be utilized in one game and, as they choose, moved to another.
Indeed, Fred Wilson of Union Square Ventures wrote late last month about how anchoring intellectual property in games to a blockchain allows for “extensibility” in a recent post about Dapper Labs, the company behind CryptoKitties and Cheese Wizards, the company’s new tournament game.
“Imagine if developers could build new worlds/games/experiences on top of Fortnite and you could take your character, your weapons, your vehicles, etc with you into those new worlds/games/experiences.”
But this “extensibility” doesn’t seem to be happening – at least, not yet – according to the data that’s available thus far. Researchers for NonFungible.com have found that, generally speaking, most players in the non-fungible token (NFT) space have only tried one game so far this year.
That is to say, many collectors of NFTs or gamers don’t experiment beyond their first experience.
What the data is saying
In two reports published in the past month, the company conducted an analysis of on chain activity for the top 13 NFT games between January 1 to June 30 of this year.
The most recent report came out last Tuesday. It analyzed on chain gaming transactions over the course of the year (meaning actual activity that needs to be logged on a blockchain, such as minting a token, interacting with another token or other game specific mechnanics) and found that 91 percent of wallets have only interacted with one game since January.
The largest game, CryptoKitties, was also a pretty isolated game, with 81 percent of its players this year only playing that one game. Even for the least isolated games (Chainbreakers, Etherbots and Neon District), 40 to 45 percent of players in 2019 only played that one of those games.
The largest single group of overlapping users covered by the report are those that hold both CryptoKitties and Axie Infinity, the latter of which is similar to the popular Nintendo game Pokemon.
Similarly, the prior report that came out July 23 – which analyzed purchases of NFTs — found that 90.1 percent of users in that time period made trades on only one NFT game.
This latter data point is perhaps the most surprising, because of the speculative association with cryptocurrencies and digital tokens. One would naturally assume that any buyer who decided to get some exposure to one NFT would hedge that bet by purchasing others as well, so their portfolio had a better shot at holding the gaming token that really caught the mainstream imagination.
Unsurprisingly, the project that has had the broadest crossover effect has been the one with the most holders overall. CryptoKitties has more users who have tried other NFT games than any other community, but it’s still a small portion.
Too early to tell?
The home video gaming console has a history that goes back to 1967. The point being: it takes a while for new gaming formats to take hold.
David Pakman, a partner at Venrock, a longstanding venture firm, told CoinDesk in an email that the team behind CryptoKitties found that it had an extremely high proportion of new crypto users in its community. “Which is why we believe gaming is one potential crypto use case that can bring mainstream crypto adoption,” he wrote.
But it won’t happen instantaneously, he said, because “gaming, in general, is a very large and non-homogenous space.”
Margeurite deCourcelle cautioned that this space is only just finding its footing and it is also not just a gamer’s sector. deCourcelle, CEO of Blockade Games (which created Neon District, a multiplayer role-playing game), told CoinDesk:
“Since NFTs are used for all types of products ranging from digital art, game assets, digital real estate or even more abstract assets, the technology is fostering a diverse user base. The report captures that people are collecting and buying NFTs that are more inline with their user-type and not just for generalized NFT collecting.”
Patrick Rieger, CEO of Decentralized Concepts, the creators of Everdragons (a gaming platform that uses a shared universe of NFT characters) agreed with this point.
“For the effects of digital scarcity to catch on in a large scale, good tools for developers and end users are essential. Even if this will take a few more years, we see a bright future for NFTs,” he said.
Rieger also noted that we might not really be seeing a complete picture of the game space by limiting the analysis to on chain transactions. There’s ways to work around the network, and many games make use of it in order to make playing easier.
For example, Gods Unchained, a collectible card game on ethereum, doesn’t actually log cards on the world computer unless a player specifically decides to do so and activates them. This presumably saves costs for the sort of player who has no intention to take cards out of the play space.
Similarly, MLB Champions takes advantage of similar technological workarounds to improve user experience. “Our games all deploy an Ethereum virtualization layer called Scarcity Engine that allows new players to jump into the games without ETH or Metamask,” said Randy Saaf, CEO of Lucid Sight, a game shop that has made a number of other games as well, including a second NFT game called Crypto Space Commander.
Saaf also noted:
“The conclusion that [there is] less than 10 percent of overlap between various blockchain games seems correct to us. More people choose the game they want to play based on traditional genres they have enjoyed and blockchain is a value-add feature vs a smaller group of players who just want to play blockchain stuff.”
But while the data suggests that the extensibility aspects of token-based games aren’t being taken advantage of, there’s precedent in the analog for this type of behavior.
Take Magic: The Gathering, the best-known collectible card game. Its creators, Wizards of the Coast, defined the basic game, but over time players came up with new games and formats that modify that original system. Most of these developments came about in a grassroots fashion, meaning that the players themselves were responsible for their popularity.
The cards are physical things. There’s no way for code to stop players from using them in different ways. In fact, the traditional deck of playing card has been spinning out new games since the 14th century.
But the NFT world has made a promise that we don’t really see even in analog gaming: mixing two analog games (such as taking the pieces from Monopoly and Sorry and creating a whole new game). That’s what NFT proponents appear to be hoping for, though. Take for example CryptoKitties’ forays into digital real estate and collectible card gaming.
But Finzer noted that some games are meant for such interactions, such as Chainbreakers and Cryptobeasties, which have been built from the beginning to rely on Decentraland, a virtual world where land ownership is defined by token possession.
If those take off, Finzer contends, users will start to catch on. If nothing else, Finzer foresees a kind of economic crossover that will at least improve everyone’s user experience, even if it doesn’t yield new games. When a gamer grows tired of a game, they will be able to trade their accumulated assets from one game with other gamers for stuff they do want in the next game they want to play.
“Our vision and hypothesis in starting OpenSea was there would be liquidity bleedover across these projects,” Finzer told CoinDesk.
Cheeze Wizards imagery courtesy of Dapper Labs