Bitcoin gave us a global, sophisticated system of value transference that is controlled by its community instead of a central authority. The underlying technology that powers bitcoin, the blockchain, has sparked a wave of financial and creative exploration that stands to revolutionize industries like finance, health, entertainment, and automotive. The period we’re in can be categorized as a "speculative mania" with 95% of projects in the space are cleverly disguised Ponzi schemes like Terra or outright scams. The industry lacks a killer application (app) that can onboard the next billion people to crypto.
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The invention of Bitcoin gave us a global, sophisticated system of value transference that is controlled by its community instead of a central authority. The underlying technology that powers bitcoin—the blockchain—has sparked a wave of financial and creative exploration that stands to revolutionize industries like finance, health, entertainment, and automotive.
For a large part of the 2010s, blockchain was thought of as a fringe technology. It’s only in 2020–21 that we saw people waking up to the potential of blockchain with the rise of use cases like non-fungible tokens (NFTs), decentralized autonomous organizations (DAOs), and decentralized finance (DeFi).
It’s important to note that we’re super early in the life cycle of blockchain technology. Remember, the internet was developed in the 1970s, but it took 30+ years for web 1.0 developers to bring us Google, Facebook, and Twitter.
Doge Coins, NFTs, and Speculative Mania
Using blockchain technology, we can build an immutable record of the entire medical history of every person on earth, which, coupled with artificial intelligence, will allow us to create precision medicine. The blockchain can also be used to create a supply chain monitoring system or a digital identity system that will enable us to conduct transparent digital elections. Instead of all that, we have Dogecoin—a meme cryptocurrency that is routinely given a shout-out by the richest person on the planet. This tells us a lot about where we’re in the innovation cycle of blockchain technology.
The period we’re in can be categorized as a "speculative mania." We saw this with the advent of the Internet- thousands of people built what they thought to be innovative businesses on the internet in the 1990s, and venture capitalists threw millions of dollars at any project that claimed to use the internet in their business description. Nearly all of these businesses failed, but the ones that survived gave rise to global communication and commerce.
We are at a similar place with blockchain in 2022. Arguably, 95% of projects in the space are cleverly disguised Ponzi schemes like Terra or outright scams. The industry lacks a killer application (app) that can onboard the next billion people to crypto. People in traditional finance (trad-fi) do not want the financial sovereignty that bitcoin provides (at least not in the short term), nor do they want to buy $100,000 JPEGs (NFTs from Bored Ape Yacht Club sell for $150k+).
Contrary to the popular opinion in the crypto space, the creation of DAOs, NFTs, and decentralized finance protocols is not the ‘Netscape’ moment for blockchain technology. These innovations are still being used only by a small subset of the global population and are largely ignored by the mainstream.
Even after a decade, the common perception that is widely touted by legacy media organizations is that blockchain-based applications are a bubble or a get rich quick scheme. They are not completely wrong here-as the majority of investors and users in the space are speculating on projects that don’t have any real utilities.
Meanwhile, blockchain projects with real utility usually have a steep learning curve. An average user doesn't want to create a new wallet or write down a seed phrase or learn about gas fees just to do a swap, a trade, or buy an NFT.
The fact of the matter is that NFTs are too expensive and don’t provide any overwhelming incentive to adopt crypto, and decentralized finance protocols are too complicated and a bit irrelevant to the average user. To accelerate real-world adoption, crypto needs a real game-changer (foreshadowing intensifies).`
The Entertainment Juggernaut
Out of every major industry, gaming is most likely to drive mass adoption of crypto across the world. Why is that?
Unlike other industries such as music, films, or finance, the gaming industry has always been one of the first to adopt emerging technologies. This is arguably the reason it towers over other forms of entertainment in terms of market capitalization. For context, the current market capitalization of the music industry is estimated to be $30 billion, while the market cap of gaming stands at $300 billion.
While the business models of gatekeepers from the worlds of finance and entertainment are threatened by the adoption of crypto. Game developers are uniquely incentivized to integrate blockchain technology into their products.
Blockchain will allow game developers to build full-fledged economies within their games, reward players for interacting with the ecosystem with real-world assets and create digital scarcity for in-game items.
In addition, crypto adoption will be relatively easier in gaming than in other industries since video game players have been familiar with concepts such as tokenization and in-game digital assets for the longest time.
Furthermore, the gaming industry’s potential to drive crypto adoption is unmatched by any other due to the sheer number of its consumers. According to crypto intelligence firm Messari, there are over 3 billion video game players in the world. That is more than the number of vehicles on the planet or the number of people who own a bank account.
Outro
Cryptocurrency games will also provide an engaging and enjoyable onboarding experience for newcomers to the cryptocurrency world. With real money on the line, crypto can be intimidating for people who are not tech-savvy. Games are a good way to introduce newcomers to the world of crypto before introducing them to decentralized finance and DAOs. Imagine a blockchain game as a rabbit hole that, once entered, takes you deeper into the world of crypto.
Blockchain technology will transform gaming in the next decade. In the past, only exceptional players could monetize their gaming passion if they built an audience. Blockchain-based games will give everyone that opportunity. This feature of blockchain-based games is already transforming lives, as evidenced by Axie Infinity players from the Philippines who are earning a full-time wage just by playing a Pokémon-inspired game. This is a real utility that can attract billions of people from developing countries to play to earn (P2E) games and, by the same token, to crypto.
